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HMRC internal manual

Employment Income Manual

Tax treatment of Local Government Councillors and civic dignitaries: Home to work travel – Passenger payments

S235A ITEPA 2003


Passenger payments made in respect of a councillor’s travel between home and a permanent workplace are not taxable if the driver and passenger are both councillors for the same authority, and their homes are within the area of the authority or no more than 20 miles outside the boundary of that area. This is subject to the remaining conditions for the passenger payments exemption being satisfied (see eim31400).   


Councillor C lives within the area of the local authority that he has been elected for.  When travelling to the council offices for meetings Councillor C makes a short diversion from his route to pick up Councillor D. The two councillors travel together to the council offices.  Payments by the local authority for Councillor C’s travel from home to the local authority offices are within the exemption and any passenger payments made by the council, in addition to mileage allowance payments within the approved amount for mileage allowance payments, can be paid free of tax provided they do not exceed the approved amount for passenger payments.