Local councillors commuting expenses allowed
Whilst contractors face the prospect of having the rug pulled from under their feet when it comes to home to work travel, the Government plan to allow local councillors to receive tax free expenses for such traveling.
Clause 28 of the Finance Bill 2015-16 will introduce a new exemption from income tax for qualifying payments made by a local authority in respect of travel expenses incurred by a member on a journey between home and permanent workplace. The exemption, effective from 6th April 2016, only applies if the member’s home is in the area of the authority or within 20 miles of the boundary of the area. The exemption will be limited to HMRC’s Approved Mileage Allowance Payment rates and the approved rates for passenger payments when applied to qualifying payments made to a member who uses their own vehicle for travel.
During last week’s House of Commons Public Committee on Finance Bill 2015-16 session, David Gauke, Financial Secretary to the Treasury, defended the move by pointing out that councillors carry out their roles in their own time, often in addition to other professional and personal commitments, and that the majority receive no payment other than allowances to cover their time and expenses. Mr Gauke said:
“ Councillors perform an important constitutional role in representing communities across the United Kingdom.
The current rules enable councillors to claim tax relief for business journeys. Where councillors routinely see their constituents at the councillor’s home, tax relief is also due for travel between their home and council offices. However, changes in working practices mean that fewer councillors now see constituents at home, so most are no longer eligible to relief for home-to-work journeys. The Government do not think that is fair. We want to ensure that no one is discouraged from undertaking a role as a councillor due to the tax treatment of their travel expenses.”
The changes will exempt travel expenses paid to councillors from income tax and NIC, including journeys between a councillor’s home and permanent workplace, where the councillor lives in the local authority area or within 20 miles of its boundary.
Whilst a number of questions were put to Mr Gauke about clause 28 by a number of committee members, not one queried why councillors should be afforded special treatment when freelancers, who actually serve a greater purpose in propping up this country’s economy, are treated as pariahs.
Contractors must be scratching their heads at the contempt this government is showing them and wondering why they are being treated as a breed apart.
As a long time contractor and conservative voter, I am at a loss as to what they are trying to achieve this parliament. Come the next GE, I’m really not sure what to vote any more, as this is yet another step towards completely alienated contractors.
This approach does seem to show nothing but utter contempt for freelancers from this government. Basically, they’re looking after their friends and not even being quiet about it.
I honestly believe that if the continual crush on freelancers doesn’t stop then some will start to look at more “creative” ways of reducing their tax liability, which in turn will just decrease the tax take not increase it.
They (Conservatives) need to understand and accept that you can only push so far before something gives…..and I think we’re now at that point.
Well, I’m now looking at moving to another country. Sod the UK.
I urge you all to sign this petition created by Glennn Dobbs https://petition.parliament.uk/petitions/108030
Trying to be more positive about this, it will just reduce labour flexibility as, for example, I will be unwilling to work in London any more as it will not be cost effective if I am taxed on travel/accommodation. So contract prices will have to rise to compensate or perhaps as I (and perhaps other contractors) will point out, if I can work 60% from my home office I can still do it for the same old price as travel to temp offices is still ok if it’s only 40% of the time. Which is what I’d rather do anyway. And it has the benefit of it being difficult for HMRC to claim you are under day-to-day control if you’re not there.
I am all in favour but lets include school governors (also unpaid), scout leaders (ditto) and anybody else who is socially useful. Actually “socially useful” is a good test, that would catch all MP expenses.