In May 2009, an article by The Sunday Times Insight team alleged that Uddin submitted House of Lords Expenses for a flat in Maidstone, Kent as her main residence. The article alleged Uddin claimed £30,000 per annum of tax-free expenses since purchasing the flat in 2005, and since 2001 on an unnamed residence outside London. The flat purchase was said to be connected with her to claim for second home allowance on her existing London property, a scheme that ostensibly exists to compensate politicians living outside London for the cost of accommodation close to Parliament. Residents living near the flat in Maidstone reportedly said they had not seen any occupiers in the flat since Uddin purchased it and that it had remained completely unfurnished until 2009, but Uddin claims: "The Maidstone property is furnished and I strongly deny that I have never lived there". Uddin's husband even denied having a property in Kent when questioned on the issue by the Times, and she appeared on the electoral roll at her London address from 1996 to date. Additionally her Facebook page states how she has lived in the East End of London for over 30 years.
Uddin claimed a total of £29,675 for accommodation in 2007–08, a time when the maximum daily accommodation claim was £165. This represents a claim at the maximum possible rate for 179 days, more days than the Lords actually sat that year.
Scottish National Party MP Angus Robertson called for an investigation on the report to the House of Lords authorities and the police. Uddin said, "I do not believe that I have done anything wrong or breached any House of Lords rules." She stated "I strongly deny that I have never lived there. Indeed I have stayed there regularly since buying it".
Uddin claimed her main home had been outside London since 2001, earning an extra £83,000 as a result. Despite repeated questioning she has refused to state the location and details of her main home between 2001 and 2005 for which expenses were also claimed. In January 2010 The Times newspaper revealed the property she had claimed for during this period was owned and occupied by her brother and his family, with Uddin's sister-in-law stating she couldn't recollect the Peer ever living there. She also has one of the highest claims for overnight subsistence of any member of the Lords.
Uddin's home in Wapping, where she lives and is registered to vote, is a housing association property. Spitalfields Housing Association received a public subsidy of £37.8 million in 2008. The average rent for its properties is £104 a week, a sixth of the market rate. The allegations of fraud led the Conservative opposition leader in Tower Hamlets, Peter Golds, to state, "Lady Uddin is depriving a low-income family of a home which was built for the needy at public expense".
On 5 May 2009, one of the senior Lord's officials, Clerk of the Parliaments, announced that the House of Lords authorities would investigate the report by the Sunday Times. Uddin welcomed the investigation: "I welcome this review and will co-operate fully with him in the hope of a speedy resolution and clarity that I did not break the rules of the House."
On 23 November 2009, Uddin's cases was passed to the police for possible prosecution for fraud. The Daily Telegraph later reported that she was refusing to co-operate with the police investigation, refusing to answer any questions.
The Crown Prosecution Service announced on 10 March 2010 that Baroness Uddin would not face any charges on the grounds that a senior parliamentary official ruled that a peer's "main house" might be a place they visit only once a month. There were no indications that the expenses would be paid back.
On 18 October 2010, the House of Lords Privileges and Conduct Committee ruled that Baroness Uddin had 'acted in bad faith' and recommended that she should be asked to repay £125,349 as well as being suspended from Parliament until Easter 2012.
On 21 October 2010 the House of Lords voted to accept the committee's recommendations. However, in November 2011, it was revealed that no formal mechanism existed to prevent Baroness Uddin's return to the House of Lords, even if she refused to repay the expenses that were fraudulently claimed, leading many members of her own party to call for her to resign rather than bring the House of Lords into further disrepute.
Bangladesh mansion
Further expenses claims by Uddin were later discovered when The Sunday Times revealed that she owns a mansion in Bangladesh. The mansion was described as made out of Italian marble with tiles, mosaics and with a balcony. The mansion was believed to have been built after Uddin became a peer in 1998, costing £140,000 which was organised by her husband Komar, located in Jawa Bazar in Chhatak; this is where many of her in-laws are originally from. However Uddin claims that the land was bought by her husband's family, purchased by Komar's father in 1980.
Outcome:
In December 2011 the House Committee in the Lords recommended that Uddin and Lord Hanningfield should not be allowed back to the Lords until the outstanding expenses had been repaid. The money was repaid in 2012 with the help of £124,000 of loans from friends, and she returned to membership of the House of Lords in May 2012.
The amount of money Uddin was required to repay, £125,349, was the largest amount of the United Kingdom parliamentary expenses scandal.