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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Tax treatment of Local Government Councillors and civic dignitaries: arrangement of guidance: ODPM guidance

 

The guidance on the taxation of Local Government Councillors and Civic Dignitaries is arranged as follows:

EIM65920 Allowances Councillors may receive
   
  Expenses deductions:
EIM65930 * general: provisional coding allowance
EIM65940 * * two places of work
EIM65950 * notes for guidance
EP9598 onwards Issue of returns and operation of PAYE
EIM65955 Tax treatment of Local Government Councillors and civic dignitaries: expenses deductions: guidance note prepared by the Association of Local Councillors
EIM65960 Local Government Councillors and civic dignitaries in England: ODPM guidance: Part one: members’ allowances
EIM65970 Local Government Councillors and civic dignitaries in England: ODPM guidance: Part two: taxation of members’ allowances and expenses
NIM05640 onwards Local Government Councillors and civic dignitaries in England: ODPM guidance: Part three: members’ allowances and National Insurance Contributions

ODPM guidance (England only)

In July 2003 the Office of the Deputy Prime Minister (ODPM) issued a guidance note to Local  Authorities in England explaining the income tax and National Insurance treatment of members’  allowances. The note is in three parts:

Part one: members’ allowances in England (see EIM65960)

Part two: taxation of members’ allowances and expenses (see EIM65970)

Part three: members’ allowances and National Insurance Contributions (see NIM05640 onwards).

The information in Part one provides further useful background regarding the types of allowances  that members may receive, and the circumstances in which they are paid.

The notes in Parts two and three were written in consultation with HMRC officials. They confirm  and expand on the guidance at EIM65920 to EIM65950 (see table above). You may find it useful  to refer to them if you become involved in correspondence about the tax or National Insurance  treatment of allowances paid to members and civic dignitaries in England.

The ODPM guidance does not apply to Local Authorities in Scotland, Wales and Northern Ireland  and you should not quote it when dealing with an Authority in any of those countries.

The ODPM guidance replaces guidance issued by the Department for the Environment,  Transport and the Regions (DETR) in August 1997. That earlier guidance is reproduced at  SE65960 onwards.