Tax queries
It is the responsibility of the appointee to be sure that they are paying the correct tax on their remuneration and expenses, in accordance with the Inland Revenue requirements. However, the following information is believed to be correct.
Tax on remuneration
HM Revenue and Customs has determined that the remuneration payable to chairs and members is liable to tax under schedule E.
Where remuneration is paid as a monthly sum, tax will normally be deducted at source under the PAYE scheme. Where remuneration is claimed on an ad hoc basis, a member is responsible for claiming it as taxable income.
There are circumstances in which HM Revenue and Customs might agree to remuneration being paid gross and allow separate arrangements to meet the tax liability. In particular, this might apply to company directors or the self employed. You should contact your local Inspector of Taxes if you think this may be appropriate to you.
Remuneration is not pensionable.
Tax on expenses
Home to office expenses
Chairs and non-executives are entitled to receive payment of 'home to office' expenses.
'Home to office' travelling expenses are wholly taxable. In some cases, HM Revenue and Customs has, however, agreed to 'special arrangements' for the body to meet the resulting tax liability. More information is available on HM Revenue and Customs' website.
It is expected that the 'special arrangement' or a PAYE Settlement Agreement (PSA) will be implemented for all non-executives.
Tax on mileage
HM Revenue and Customs’ rules are that you can be paid up to 40p per mile for up to 10,000 miles, and 25p for every mile thereafter without incurring any tax liability on these payments. Chairs and members, however, are entitled to receive 53p or 43p for up to 7,500 miles. Tax is therefore due on the 13p or 3p paid over HM Revenue and Customs' limit, up to 7,500 miles. Then, as the rate paid to chairs and members falls below the 40p threshold for the mileage between 7,500 and 10,000 and the 25p threshold above that, there is no further liability.
If chairs and members travel over 7,500 miles on official business, the maximum they can be liable for tax on is £975 for cars of 1500cc and over or £225 for smaller cars.