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Should MPs be allowed to use personal service companies (PSCs) for work outside their duties as MPs? (I’m not getting into the debate about whether they should even be allowed outside earnings.) Readers will have seen the recent reports which try to wrap the use of PSCs within the wider discussion of ‘sleaze’. This is disingenuous. As long as a PSC is used properly and not as a smokescreen to disguise what is actually an employment relationship, I see absolutely no reason why somebody’s status as an MP should have relevance to their use of a PSC for non-parliamentary activities.
Smearing MPs for using PSCs implicitly smears everybody using a PSC, implying that they are doing something dodgy. Some years ago a junior minister at the Treasury was forced to resign for designating a property as their only or main residence shortly before sale, doing exactly what was set out in HMRC’s manuals at the time and following advice from a major firm of chartered accountants. Was that wrong? I’m not sure that it was.
MPs have a special status when it comes to residence and domicile. But, and this is the point, there is specific legislation setting this out. If parliament wants to enact legislation banning MPs from using PSCs that would be a different matter. But until then I see no reason for public opinion to impose a de facto ban.
I don’t think that anybody believes that the tax regime for PSCs works well. I would have no objection to a complete rethink of how they are taxed – indeed I would welcome it. But while the law remains, it should apply to all citizens. MPs should not be above the law, but I see no reason to suggest that they should be below it.
