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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
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Tax treatment of Local Government Councillors and civic dignitaries: Home to work travel

S235A ITEPA 2003

 

For 2016/17 onwards, no liability to tax arises in respect of payments to councillors for travel between their home and 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 or her own vehicle to undertake the journey, the exempt amount is limited to the approved amount for mileage allowance payments.

Journeys between a councillor’s home and a permanent workplace are treated as business travel for the purposes of any approved mileage allowance payments made (see eim31205), however no mileage allowance relief is available for such payments (see eim65943).

 

Relevant authority

For the purposes of this exemption, a councillor is a member of a relevant authority if they are an elected or appointed member of a county, district, London borough or parish council or the Council of the Isles of Scilly in England, a county, county borough or community council in Wales, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 in Scotland, or a district council in Northern Ireland.

 

Permanent workplace

Permanent workplace has the same meaning as in s339 ITEPA 2003 (see eim32065).

 

Qualifying payment

A qualifying payment is a payment made to a member of a relevant authority by a relevant authority in connection with their activities as a member of that authority. Payments made to a councillor in respect of activities undertaken in a capacity other than as a councillor, or to a person who is not a councillor but is treated as such for the payment of expenses, are not qualifying payments.

 

Examples

Councillor A lives 28 miles from the border of the local authority area that he has been elected for.  Any payments made by the local authority for Councillor A’s travel between his home and the local authority offices where he performs most of his duties are not covered by the exemption and will be liable to tax.

Councillor B lives within the area of the local authority that she has been elected for. Payments by the local authority for Councillor B’s travel between her home and the local authority offices where she performs most of her duties are within the exemption and can be paid free of tax. If she uses her own vehicle to undertake the journey between her home and workplace, her mileage allowance payments will be exempt provided they do not exceed the approved amount for mileage allowance payments.