Part 4: Income tax, corporation tax and capital gains tax Section 29: Travel expenses of members of local authorities etc. Background note
Travel expenses paid to members of a local authority are generally subject to the current rules that govern the tax treatment of all employees and office-holders. These rules will not be affected by this measure and travel undertaken in the performance of the duties of the employment, or travel for the employee’s necessary attendance at a temporary workplace, will generally qualify for tax relief. Tax relief is not usually available for travel between an employee’s home and a permanent workplace i.e. ordinary commuting.
	To ensure that individuals are not discouraged from undertaking a role as a councillor by the tax treatment of their travel expenses, this legislation will provide an exemption from a charge to income tax where a local authority makes a qualifying payment to a member for travel expenses incurred on a journey between home and permanent workplace, or where qualifying payments in respect of a passenger who is also a member of the authority, are made. Regulations to give effect to a corresponding disregard for Class 1 National Insurance contributions (NICs) will also be introduced for the start of the 2016-17 tax year.
	To ensure that the exemption does not enable members of local authorities to benefit from unlimited tax relief on their travel expenses, where a local authority makes mileage payments to a member for using their own vehicle to undertake a qualifying journey the exemption will be restricted to the Approved Mileage Allowance Payment (AMAP) rates or the approved amount for passenger payments.
	Where the authority pays less than the AMAP rate, or pays no mileage allowance, Mileage Allowance Relief (MAR) will not be due in respect of qualifying journeys.