LGA Lib Dems: Councillors’ Travel Expenses

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The government have announced their intention to exempt the travel expenses of councillors from tax. This brings a measure of consistency to their approach having excluded councillors from the local government pension scheme. In opposing the pension proposals, the LGA Lib Dems made the point that councillors were being treated as employees for tax purposes but not when it came to pensions. Whilst we clearly lost the argument on pensions, the government have agreed to rectify this inconsistency by exempting travel.

A Written Ministerial Statement from HM Treasury (22 July 2014), stated:

Travel expenses of local councillors

The Financial Secretary to the Treasury (David Gauke MP): The Government is announcing today that it intends to introduce legislation to exempt from income tax and National Insurance contributions (NICs), travel expenses payments made to local councillors.

Local councillors perform a vital but frequently unsung constitutional role working on behalf of local people, often in addition to other professional and personal commitments. They are required to perform their duties in both the communities they serve and their council offices and most receive no payment other than allowances in recognition of the time and expenses they incur.

The Government wants to ensure that nobody is discouraged from representing their local community as a local councillor and therefore intends to introduce this new exemption so that in the future, travel expenses paid to local councillors, including those to cover the costs of journeys to their council offices, are not subject to income tax or NICs.

The Government will provide further details of the exemption, and the time scale for introduction, in the autumn.