Question

Thanks: if the Mayor is allowed to spend the allowance without checks on its use, then it is surely taxable?

Answer 1

It is not taxed (generally), as it is part of the 'special scheme' and so disregarded for tax purposes.

The Local Authorities (Members' Allowances)(England) Regulations 2003, specifically travel, travel expenses and the catch-all "any other expenses which are wholly, exclusively and necessarily in the performance of their official duties".

If the allowance, is not set out as being to allow the office holder to perform their duties, i.e. it is more a salary than it is to cover the expenses of office, then it is taxable.

Comments

The recipient must declare it to HMRC as taxable income but those elements of the payment which are wholly and necessarily incurred in the conduct of the duty (if you have a receipt) may be off-set.

Chair's allowance is at the discretion of the recipient how it is spent and it is not subject to further scrutiny by the PC nor the internal audit.  Once the allowance is agreed and resolved by the PC the Chair may dispose of it as they see fit without any further course to authorisation or justification.