Councillor’s Travel Expenses – Update

Councillor’s Travel Expenses – Update

As we have reported previously, a statutory exemption from tax and National Insurance Contributions (NIC) is set to be introduced with effect from 6 April 2016 for mileage allowances paid to councillors for travelling between their home and their permanent workplace, ie the Council offices.

However, for tax years up to and including 2015/16 we are aware that HMRC is currently contacting a number of authorities informing them that it still intends to pursue recovery back to 2011/12, where mileage allowances have not been subject to tax/NI, unless councillors routinely see their constituents at their homes.

We are expecting HMRC to take a strict line on this matter and would strongly recommend that, in cases where councils are contacted by HMRC regarding this issue, professional advice be sought to ensure that the best possible outcome is achieved.
PSTAX has many years of experience in representing local authorities in dealing with HMRC employer compliance reviews and negotiating settlements, so please do not hesitate to contact us for an initial discussion to assess your needs.

If you have any queries regarding this matter, please contact our Employment Tax Team.


Duncan Groves
07760 271490

John Harling
07768 446381