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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have just been elected a District Councillor and receiving

Resolved Question:

I have just been elected a District Councillor and receiving a personal allowance of £5100 pa plus an IT allowance of £340pa. I have just received my first pay details and find that I has been taxed at basic 20%. Is the allowance and IT allowance taxable? I believed allowances were free of tax? Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

The basic allowance paid to councillors is taxable. As you will see here, the government announced a tax exemption for travel costs reimbursed to councillors travelling to council meetings. A regular employer is taxed on a reimbursement to them by their employer of travel costs for home to work and work to home travel.

As far as the basic allowance is concerned, if you spend any of that money on council business such as using a room at home for council work or paying a secretary or hiring a hall to run surgeries for constituents to give a few examples, then tax relief for those costs can be claimed via a self-assessment tax return at the end of the tax year.

I hope this helps but let me know if you have any further questions.
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