Councillors’ Travel Expenses – Statutory Exemption Delayed

Councillors’ Travel Expenses – Statutory Exemption Delayed

In a Ministerial Statement issued on 24th March 2015, it was announced that the proposed Tax and National Insurance exemption for councillors’ travelling expenses, which was due to come into effect on 6th April 2015, has been deferred to a later date (as yet unspecified).  The Statement advises that the changes “have been deferred as a result of discussions with the Opposition in the context of the end-of-Parliament wash up process” and it is intended that the legislation will be introduced at the earliest opportunity in the new Parliament.

However, we understand that, until the legislation is introduced, payments made to councillors in respect of home to work travel will continue to be governed by existing guidance/interpretation for Tax/NI purposes. Therefore, as we have previously recommended, local authorities are strongly advised to review their current procedures to determine the correct position, whether or not this matter has been raised by HMRC as part of an Employer Compliance Review.

If you would like us to review your current arrangements and advise on potential risks, please contact our Employment Taxes Director, John Harling, on 07768 446381 or via e-mail john.harling@lavat.co.uk.