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Revenue investigates Kent councillors' expenses

by political editor Paul Francis

Tax
Tax

Tax officials are investigating travel expenses claims made by county councillors which run into tens of thousands of pounds each year, it has emerged.

The investigation is considering a complaint the authority should have been paying tax on councillors’ travel expenses and its existing arrangements do not comply with rules.

It could leave Kent County Council facing a significant tax bill as the rules were changed 12 years ago - although it is understood the council has indicated it would meet any costs rather than members.

In the last two years, councillors have claimed close to £250,000 in travel expenses alone.

Officials from HMRC have asked county councillors to detail the extent to which they work from home seeing constituents, as under current rules claims are only tax deductible if they do so on a regular basis.

The probe is related to an on-going auditors inquiry into complaints concerning duplicate expenses claims made by certain senior county councillors.

Emails sent by KCC deputy leader Alex King to Conservative members reveal the authority is anxious to persuade the tax office the arrangements should stay as they are.

In one, he urges councillors to "keep calm" and says they should keep the discussion confidential because of press interest.

"Publicity at this stage may well result in HMRC giving an answer none of us will like!" he writes.

Mr King tells colleagues: "I and other long-serving members were clear when we joined KCC that we were regarded as having two places of business - home and County Hall. We now know the rules were changed some 12 years ago and it became a mandatory requirement that members should "routinely see constituents in their home" before home could be classed as a place of business. I understand that a large number of authorities are in a similar position."

Some councillors believe any change in the rules could leave them out of pocket and make it harder for them to continue. Members who live in parts of the county furthest from Maidstone’s County Hall say the money is an important element of their remuneration. Others say they choose not to meet constituents at home because of concerns about safety.

KCC’s 84 elected members are paid the national rate of 45 pence per mile. On top of travel expenses, all are given an annual allowance of £13,000 a year.

Neither KCC or HMRC were prepared to comment on the investigation.

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