A spat between HMRC and the body that looks after MPs expenses has erupted over politicians claiming for the cost of hiring accountants to help them file their tax returns.
The row emerged after the Independent Parliamentary Standards Authority (IPSA), the watchdog created by parliament in 2009 following the Commons expenses scandal, locked horns with the taxman over MPs' 'right' to employ a tax deductible professional to fill in expenses forms and tax returns for their offices.
HMRC wants to block MPs from being able to claim thousands of pounds a year to hire an accountant to file their expenses, on the basis that it subsidises their personal finances rather than their parliamentary work.
The Guardian, which broke the story, has seen an exchange of letters between tax officials repeatedly telling IPSA that other employees are forbidden to claim back professional fees or the tax, and no special dispensation should be given to MPs.
IPSA disputes the taxman's stance insisting that MPs - while strictly being employees - are similar to small businesses, which can reclaim these costs.
John Whiting, tax policy director of CIOT, said he had some sympathy with MPs over the issue.
'It's an odd position. An MP is an employee and is taxed on the salary they get and in principal, in the same way as an employee for expenses. But they are almost a little mini business, with allowances, they employ staff and work from two bases. They are far from a standard employee so I do have a deal of sympathy with MPs. There is a need to sort out the MPs position on this.
'It would be much better if MPs were given set allowances for a secretary, computer etc., and have it paid centrally.'
He added that the stark line between an employee and someone who is self-employed was much more blurred in the case of many MPs.
An HMRC spokesperson said: 'Under long-standing and strictly applied rules relating to the taxation of employment, income tax relief is only available for general expenses if they are incurred "wholly, exclusively and necessarily in the performance of" the duties of the employment.
'This rule precludes a tax deduction for the costs of complying with tax law and therefore accountancy fees incurred by employees (e.g. for the preparation of personal tax returns) are non-deductible.'