SALARIES
Q: Are councillors employees of the Council or are they "office bearers" and although not employed by the Council deemed to be employees for tax purposes?
A: Councillors are office holders. HM Revenue and Customs have categorised them as PAYE for income tax and Class 1 for National Insurance Contributions purposes.
Q: What is the correct term for the salary payments to councillors - remuneration or salary?
A: Remuneration is the legal term.
Q: Is councillors' remuneration payable in advance or in arrears?
A: In arrears.
Q: Is there any preferred payment cycle for councillors or may the payments cycle be set at the discretion of the council e.g. monthly, four-weekly etc?
A: The Regulations permit monthly or four weekly payments. It is for Councils to decide which method would suit them better.
Q: When is the senior councillor salary payable from, can we backdate it to the date of the election?
A: The senior councillor salary should be payable from the date the member becomes a senior councillor.
Q: On what basis are councillors' salaries calculated i.e. are they calculated on a daily basis of 1/365 of each Councillor's annual salary? This is significant in situations where a Councillor commences or ceases office, or commences or ceases to hold an office that warrants a Senior Councillor's salary.
A: Guidance says on a daily basis based on 1/365.
Q: May councillors elect to forgo their entitlement to any part of their remuneration/salary or expenses?
A: Yes, the Regulations allow them to forgo all or any part of their salary. If a councillor wants to forego any expenses, he/she should not claim them.
Q: May councillors receive employment or other taxable income from other sources? If so, may they apply to HMRC and DWP for special arrangements to be put in place for income tax & national insurance?
A: When the Committee made its recommendations it recognised that the work done by the majority of councillors would not be full time. As such they could receive employment or other taxable income from other sources. Issues about payment of income tax and national insurance are matters for HM Revenue and Customs to determine. Such issues would have to be considered on a case by case basis.
Q: Do the same arrangements still apply to a councillor's remuneration where they are acting as the Chair or Vice-chair of any publicly funded organisation i.e. it was an abatement of 10 per cent to the Senior Councillor's SRA the Councillor received for each half day per week the Councillor spent as Chair or Vice Chair of the organisation?
A: There is no abatement.
Q: Members may currently be entitled to a range of DWP benefits such as incapacity benefit, income support etc. Is there advice for Members in such situations?
A: These are issues Members should discuss with the Department for Works and Pensions. Such issues would have to be considered on a case by case basis.
Q: Will councillors be eligible for Statutory Maternity Pay and for how long should they receive their salary in such circumstances?
A: Councillors' pay is subject to PAYE for income tax purposes and Class 1 National Insurance Contributions. As such, HM Revenue and Customs advise that they would be entitled to Statutory Maternity Pay. They further say that these are not social security benefits but replacement earnings. They are therefore taxable and subject to National Insurance contributions as employment income in the same way as other elements of their remuneration. As councillors are not employees, they would be entitled to their salary for as long as they remain a councillor.
Q: Will councillors be eligible for Statutory Sick Pay and for how long should they receive their salary in such circumstances?
A: Councillors' pay is subject to PAYE for income tax purposes and Class 1 National Insurance Contributions. As such, HM Revenue and Customs advise that they would be entitled to Statutory Sick Pay. They further say that these are not social security benefits but replacement earnings. They are therefore taxable and subject to National Insurance contributions as employment income in the same way as other elements of their remuneration. As councillors are not employees, they would be entitled to their salary for as long as they remain a councillor.
Q: May a member receive both the remuneration for a senior councillor and the basic remuneration?
A: No.
Q: May the Council have more than its maximum no of senior councillors if the total cost is kept within the budget permitted?
A: Councils cannot have any more than the maximum no of senior councillors allocated to them and cannot exceed that budget limit.
Q: Why restrict the number of senior councillors?
A: The evidence suggested that all councillors do the same job in wards but some had different responsibilities and roles within the Council structures. Research also showed that the time commitment and weight of responsibility held by councillors in promoted posts was higher than that for 'basic' councillors. As such, these roles may be less compatible, or in the case of Council Leaders in larger councils, incompatible with having other significant responsibilities outside the council. The principles the Committee considered important in determining the arrangements for paying senior councillors were:
- The number of councillors receiving higher salaries should be a minority
- Councils themselves should have reasonable flexibility, within a sensible framework, to determine the salary level that should apply to these posts
The Committee intends to visit councils over the next year to see how the new arrangements are working - this will include assessing whether the maximum number of senior councillors allocated to an authority is appropriate.
Q: What about licensing boards?
A: Licensing Boards are not joint boards and councillors holding convener or vice convener positions on these boards would have to be met from the council's senior councillor allocation.
Q: What about councillors serving on Regional Transport Partnerships (RTP)?
A: No councillor is entitled to receive 2 salaries for work they are doing in their capacity as councillors. Any senior councillor who serves on the RTP would have to come from his/her own authority's allocation and budget for senior councillors.
Q: Will salaries etc be increased in line with inflation?
A: The Committee plan to look at the levels of salary paid to councillors on an annual basis and make recommendations to the Scottish Ministers. Limits for travel and subsistence costs will be reviewed from time to time. Any increases in salary and other costs will be for the Scottish Ministers to determine.
Q: Is a joint committee the same as a joint board?
A: No. A joint board is a legal body.
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ALLOWANCES AND EXPENSES
Q: Are the mileage rates mandatory or can councils pay 40p per mile if they wish?
A: The mileage rates are mandatory. There is no discretion for local authorities to vary them. HM Revenue and Customs have indicated that tax should be paid on the additional 9.3p per mile for car/van travel.
Q: Overnight subsistence - can this be paid to councillors regardless of whether they are in their own ward?
A: Yes, all councillors may be reimbursed the actual receipted costs of overnight accommodation for bed and breakfast up to a maximum of £118.63 within London or £94.82 elsewhere in the UK. However, such costs must be reasonably incurred and relate to Council business.
Q: Overnight subsistence - what happens if overnight accommodation is booked and paid for by the councillor?
A: Under normal circumstances the costs should be reimbursed to councillors on an actual receipted basis. However, where a council books overnight accommodation e.g. where it might be more cost effective to do so, the maximum costs for bed and breakfast should be within those specified in the regulations i.e. £118.63 in London and £94.82 elsewhere in the UK.
Q: Are councillors permitted to travel by first class by public transport?
A: Standard class is expected to be used for the vast majority of journeys.
Q: Are councillors permitted to travel by first class for travel by air?
A: It is recommend that for journeys in UK and Europe, economy class should be used where possible. The next higher class (normally business class) may also be considered in certain circumstances. This would normally be when it was not cost effective to book economy flights, perhaps because of restrictions on bookings or in the case of short-term visits. Also in cases where a councillor necessarily travels for official reasons in company with a person who is not a councillor but who is travelling in a higher class, then business class travel can be considered. Where long haul journeys are being undertaken, e.g. to the USA or Far East, business class travel can be permitted.
Q: What about accommodation overseas?
A: The cost of living in other countries can vary considerably even in different parts of the same country. It is recommended that Councils should use the UK rates for accommodation costs for bed and breakfast and meals, as a guide, to determine what costs might be reasonable for foreign travel. In making these decisions, consideration should be given to cost implications and value for money. Councillors themselves should seek prior approval of the arrangements prior to incurring costs.
Q: Expenses claim form. May we amend or expand on the sample layout provided?
A: The Standard Claim Form should be used by all councillors and all councils. Councils may adapt it to include drop down menus which could show the nature of the approved duty, mode of transport, subsistence as meals or accommodation and types of accommodation, other expenditure information.
It is our understanding that HMRC would expect the Council to maintain claims forms that provide sufficient detail and evidence to support the business nature of the journey.
Q: Is the reimbursement of subsistence non-taxable only where it is incurred when travelling on council business.
A: Councillors should only be submitting claims which relate to reimbursement of expenditure for council business. They are required to sign a declaration on the form that this is the case. The guidance produced by the Executive provides information on the view HM Revenue and Customs have taken on subsistence claims.
Councillors would be expected to provide sufficient detail on the claim form in regard to the claim for subsistence to confirm it was incurred while on a Council business journey (including any overnight stays).
Q: Reimbursement of cost of meals - schedule 2 of the regulations shows no reimbursement is due for meals taken by councillors within any council premises. Is this confined to the councillor's own council or does it apply to any council location in the UK ?
A: It relates to any council premises in the area of the local authority of which they are a member.
Q: Is it permissible for reimbursement for meals without a receipt?
A: The regulations do not permit reimbursement without a receipt. There should be no reimbursement of the ingredients of a sandwich/meal.
Q: Claims for mileage. What travel is eligible as necessarily incurred on council business . . .
a) Travel from a councillor's home to another place of business?
b) Travel to and from a councillor's home to a place of second employment?
c) Travel to and from a councillor's place of second employment to council business?
A: Travel which has no connection with council business should not be reimbursed. For the purposes of calculating claims, a councillor's normal place of residence (his/her home) is regarded as his or her normal place of work, so expenses associated with travel from home to the council headquarters, and other locations to conduct council business, may be claimed back. Where a councillor travels on council business from his or her employment or business (which is not council related) he or she may be reimbursed for the cost of the journey. However, if the cost of making this journey would have been lower had it started from the councillor's home, then that lower cost is the maximum amount which should be reimbursed. For example if the distance from a councillor's home to council offices is 5 miles and from a councillor's business to council offices is 10 miles, a maximum of 5 miles may be reimbursed.
Q: Claims for reimbursement of calls on mobile phones. Can you offer any advice on how councillors provide evidence of business calls on personal mobile phones especially where the councillor has contracted for a fixed rate for a specified number of minutes/texts per month?
A: Reimbursements should only be made on production of receipts. Councillors should contact their service provider for a detailed listing or alternatively switch to a phone provided by the council.
Q: Where a councillor has a combined package for telephone rental and calls, TV and broadband, what costs can be reimbursed if used for both personal and council business?
A: Councillors can claim reimbursement of 50 per cent of the line rental costs, both for telephone and broadband. They may also be reimbursed the full cost of any listed business calls made outwith the terms of their agreement with the supplier. However, they should not be reimbursed with an automatic percentage of the cost of their package.
Q: Any guidance on deadlines for councillors to submit reimbursement claims?
A: That is at the discretion of the council.
Q: Councils are entitled to recover any VAT on receipts submitted by councillors to reduce the cost to the taxpayer. What figures for expenses are shown in the public record - those inclusive or exclusive of VAT?
A: All amounts for expenses and allowances in the Public Record should be inclusive of VAT and include any amounts which relate to accommodation or travel organised by the Council on behalf of the councillor.
Q: Can the civic head allowance be paid to more than one person?
A: No.
Q: What can the civic head allowance be used for?
A: The money is to reimburse the civic head for expenses, other than travel or subsistence expenses, which he/she incurs legitimately in carrying out his/her civic duties. It is for the Chief Executive to determine what might constitute civic duties based on the practice in their own authority.
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PENSIONS
Q: If a councillor takes his pension at 75 can he still be a councillor?
A: (Reg 34) - Yes he can take his pension and still be a councillor. (just to clarify, it is not a case of "if" he takes his pension at 75, the regs say that pensions must be paid the day before a member's 75th birthday).
Q: If a councillor goes on beyond 75 is his pension abated for the next five years or for any other time?
A: (Reg 109 & 110) - The intention of the regs was not to apply abatement in respect of councillors pensions but each fund has their own policy on abatement so that would have to be a decision made by the appropriate fund.
Q: If a councillor opts to buy back pension does the local authority have to make any contribution?
A: Local Authorities are not expected to make any contribution, this must be at the whole cost to the individual member.
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