The MP's decided collectively a decade or so ago that big pay rises would be politically unacceptable - so they raised the expenses that were considered 'reasonable' instead - and basically MP's just bunged receipts in until they hit the 'right' total. The details are now being rifled through by journalists and making for hilarious reading.
The real killer for many of them is directly of their own making - they started blurring the definition of tax evasion, avoidance, etc a few years ago to get a 'moral momentum' behind making people pay more tax - i.e. it's legally fine to do 'X' (pay into your pension, give money to your wife, let your parents stay in your home if they get ill) but as it cuts your tax bill it was morally wrong and shouldn't be done... that way they hoped to stop people doing stuff without actually enacting laws.
Quite a lot of MPs were using a blameless provision in UK tax law called the principle private residence exemption - basically you aren't taxed on the sale of your main home, and to handle difficult sales, you can overlap homes for up to three years without having to worry about tax.
However unlike most people MP's routinely have two homes - one in their home constituency, and one in London near parliament - with the latter pretty much paid for by the taxpayer. And they were flipping the PPR back and forth lick a yoyo to basically avoid tax on 2 or even 3 properties at a time...
Us accountants have been winding the Revenue up something chronic about the whole thing - they usually come down on expenses 'cheats' like a ton of bricks and some of the MP's comments defending themselves are priceless, the inspectors have taken it in fairly good humour so far (although they still demand the money of course).
As someone with a lot of international clients I find it all hilarious, 'MP quite over £500 expense that's really rather silly' really doesn't measure up to the stories I hear from my african, russian, east european, etc clients about their politicians...
