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Kent County Council pays £179,000 for councillors' tax on travel expenses

Kent County Council has paid a bill of more than £179,000 on behalf of county councillors who should have been paying tax on their travel expenses, it has emerged.

The council has settled a dispute with HMRC about whether councillors should have been paying tax on their journeys to and from County Hall.

But rather than members paying the bill, which covers a four-year period, the county council has paid it on their behalf, using taxpayers’ money to do so.

Paul Carter has been criticised for his 'glass ceiling' remarks. Stock picture
Paul Carter has been criticised for his 'glass ceiling' remarks. Stock picture

KCC says it had no choice but continued this week to maintain the law was unclear about the tax liability of elected members.

Councillors are now being offered the chance to meet their own costs voluntarily but it is not yet clear if any have or intend to do so.

The tax bill is made up £167,000 in tax plus a further £12,000 interest.

Cllr John Simmonds (Con), the deputy leader of the council, said: “KCC took a view that they [car journeys] were not taxable. There is considerable ambiguity in the legislation. HMRC said that if you were seeing constituents in your home, then you could validly claim. The HRMC then decided to take a look.”

Cllr John Simmonds
Cllr John Simmonds

He added: “We looked at the legislation, we got advice and to put it bluntly, it was ambiguous. It hinged on whether you used your home as an office but if you don’t, then you are liable for tax.”

He said members were paid a modest allowance and that if KCC was to encourage more people to stand in elections, they should not be out of pocket.

Councillors would be told details of how much their own liability was and whether they chose to pay would be a matter for them. However, a number have since left the authority and others have died.

Cllr Trudy Dean, Liberal Democrat group leader, said councillors should pay the bill.

Trudy Dean
Trudy Dean

“If these are bills members should be paying, it is their responsibility to do so. My view is that this is a personal liability. The council has no enforcement powers but members should be repaying what they owe.”

KCC has been in a three-year long tussle over the issue and in 2013, it emerged that the authority had paid tax advisers more than £5,000 to challenge the HRMC ruling.

It had also proposed increasing the mileage rate to neutralise the impact but that was vetoed.

County councillors receive a basic allowance of £12,805 and are eligible to claim mileage at 45 pence a mile if travelling on official council business.

In 2013-14, councillors received £113,479 in travel expenses.

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