NIM05640 - Class 1 NICs: Expenses and allowances: Civic dignitaries' and Councillors’ allowances: General

Local authority (LA) members, such as councillors and civic dignitaries, are elected office holders. They are therefore employees of the LA for NICs purposes and there will be a liability to pay Class 1 NICs if they receive earnings above the level of the earnings threshold.

See NIM02010 for general guidance on the meaning of “earnings” and NIM05010 for general information relating to the treatment of expenses for NICs purposes.

The paragraphs detailed below explain how the legislation comprised in regulation 25 and Schedule 3 to the Social Security (Contributions) Regulations 2001 affects the treatment of certain types of expenses payments made to civic dignitaries, and NIM05646 provides guidance on how to assess Class 1 NICs for councillors and civic dignitaries

The following paragraphs provide information about the NICs treatment of certain expenses which are reimbursed to councillors

See EIM65960 for general information about the types of allowances payable to councillors and civic dignitaries, and EIM65970 for guidance on the tax treatment.