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HMRC internal manual

Employment Income Manual

Tax treatment of local government councillors and civic dignitaries: expenses deductions: home as a workplace

HMRC has previously accepted that some councillors had two places of work. This meant that travelling allowances were not usually taxable provided that:

  • it was necessary for the councillor routinely to see constituents in the councillor’s home; and
  • the councillor was paid for travel between home and the authority’s offices; and
  • the mileage allowance paid did not include any element of profit.

There’s more detailed guidance on this point at EIM65970 (paragraphs 114 and 115).

For the tax years 2016 to 2017 onwards, no liability to tax arises in respect of payments to councillors for travel from home to a permanent workplace, where home is within the authority area or no more than 20 miles from the area boundary. Where a councillor receives mileage allowance payments for the use of his own vehicle to undertake the journey, the exempt amount is limited to the approved amount for mileage allowance payments. Although travel is treated as business travel for the purposes of any approved mileage allowance payments made, no mileage allowance relief is available (see EIM65943).

Mileage allowance payments should be dealt with under the approved mileage allowance payments scheme (see EIM31200 onwards).