SE65920 - Tax treatment of Local Government Councillors and Civic Dignitaries: allowances Councillors may receive - 1991/92 onwards
A new system of allowances payable to Councillors and Civic
Dignitaries was introduced with effect from 6 April 1991. The
following table summarises the types of payment being made, and
their tax treatment. For Authorities in England and Wales, you can
find further guidance in the note which the Department of the
Environment, Transport and the Regions issued to Local Authorities
in August 1997 (see
SE65960 to SE65980).
As regards claims expenses deductions which may be claimed by
Councillors and Civic Dignitaries, see
SE65930 to SE65950 and (in England and
Wales only)
SE65970.
| Type of payment | Tax treatment
|
| Basic allowance
Attendance allowance Special responsibility allowance Conference attendance allowance | These allowances are taxable under Schedule E as emoluments from the office held by the recipient (see generally SE00510 onwards) |
| Financial loss allowance | Not taxable under
Schedule E, but may in some cases be taxable under Schedule D (see
BIM40475)
|
| Travel and subsistence
allowance
Conference travel and subsistence allowance | These payments are not
normally taxable because they are matched by an equivalent
deduction for allowable expenditure (see
SE65930 to SE65950). They will normally
qualify for a dispensation (see
SE30051 onwards)
However, if a day subsistence allowance is paid for a period of attendance at the place where the meetings of the Authority or Committee take place, this is taxable under Schedule E. For 2002/03 onwards, mileage allowances paid to Councillors and Civic Dignitaries should be dealt with under the approved mileage allowance payments scheme (see SE31250 onwards). |
| Allowance paid to Civic Dignitaries | This allowance is taxable
if
For Authorities in England and Wales, see also SE65970. |
| Incidental expenses | There is no tax liability where an authority reimburses the cost of incidental expenses such as postage or telephone calls (but not telephone rentals) and these are incurred wholly, exclusively and necessarily in the performance of the officers duties. Such payments will normally qualify for a dispensation. |
