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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Tax treatment of members of the police service: taxable allowances paid to police officers

Section 62 ITEPA 2003

All the following allowances paid to police officers count as earnings within Section 62 ITEPA 2003 (see generally EIM00515 onwards), in addition to their normal pay:

  • London weighting and London allowance
  • South East allowances
  • Police Service in Northern Ireland inspectors’ non-pensionable supplement
  • rent allowances and compensatory grants. Compensatory grants in connection with rent allowances are payable, based upon the amount by which the tax deducted from earnings during the preceding year in accordance with the tax tables increased by virtue of the inclusion in earnings of a rent allowance or any compensatory grant. In the year in which any officer leaves the service, two grants are payable, one in respect of tax paid for the preceding year and the other for the year in which the officer leaves. The grants are chargeable to tax as income of the year in which they are payable. For changes that took effect from 1 September 1994, see EIM68150.
  • plain clothes allowance (see Fergusson v Noble (7TC176)). This allowance will be discontinued from 1 April 2004.
  • reimbursement of medical charges incurred under the National Health Service Acts except when the officer suffers personal injury as a result of an accident or an assault
  • supplementary rent allowance paid to married officers (and, in certain circumstances, to widowers) except where paid in the circumstances outlined in EIM68120 (bullets 1 and 2). For changes which took effect from 1 September 1994, see EIM68150.
  • dog handler’s allowance.