Councillors will no longer have to pay tax on travel allowances for journeys from their homes to council offices, the Treasury is set to announce.
LGC understands financial secretary to the Treasury David Gauke (Con) will say today that the government intends to introduce legislation to make councillors’ travel expenses payments exempt from income tax and National Insurance contributions.
Last month, LGC reported that hopes among councillors were growing that a favourable decision would be made after the Department for Communities & Local Government had entered talks on the issue with the Treasury.
Mr Gauke is expected to say in a written ministerial statement that “councillors perform a vital but frequently unsung constitutional role” and recognise that most do not receive any payment other than their allowances.
The statement is expected to say: “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 National Insurance contributions.”
Further details and a timescale for its introduction are expected in the autumn.