A SENIOR North-East MP called last night for a tax break on loans offered by Parliament's expenses watchdog for renting second homes.

Labour former minister Kevan Jones, the North Durham MP, said he thought it may be a mistake that the loans of up to £4,000 from the Independent Parliamentary Standards Authority (Ipsa) were taxable.

During a speech on the Budget-enacting Finance Bill he said the legislation would allow the tax status of MPs' expenses to remain as they were before.

But he complained that Ipsa would be unlikely to refund tax paid on the money received to use as a deposit.

Ipsa, set up in the wake of the scandal over perks which rocked Westminster, has incurred the wrath of many MPs for the complexity of the system.

Mr Jones joked: "I know we shouldn't be speaking about our expenses and we shouldn't be, somehow, mentioning the Ipsa word without many members using un-parliamentary language, I think.

"I'm not going to do that, I actually got some money out of them yesterday."

He continued: "The proposals in the Finance Bill are basically allowing our expenses as they were before in terms of their tax status.

"But what I can't understand is why, on the deposits we are going to be given for the rental of our second homes in London, it is taxable.

"I don't understand whether it's a mistake or why that's been excluded.

"Because at the end of the day I'm sure that if we present the tax bill to Ipsa they will not pay that tax allowance."

He also called for a tax breaks on depreciation on capital purchases.

"Already we are treated in tax purposes as running a small business. Now before we were allowed to claim legitimate expenditure for the filing of tax returns.

Ipsa have now taken that away from us and we have to pay for that, in my case next year something like £600.

"So what I would like also to see in this section is all our expenditures in terms of buying equipment which we have capital depreciation on to be taken out of tax.

"That would then solve the issue in terms of us being looked at as small businesses.

"I rue the day a few years ago when I knocked a door through in my office and found out I had a tax liability for this door of over £1,000."

He continued: "Clearly Ipsa and the court of public opinion have said that we can no longer claim for legitimate tax advice on these areas.

"Well that's fine, I wouldn't need a tax adviser, unlike possibly some members, to draw up their personal tax affairs.

"But we do need to have a look at that point."