Councillor allowances
A local council in England may pay a basic allowance each year to its Chair only, or to each of its elected Councillors. Councillors that have been co-opted are not permitted to take an allowance.
The amount paid to the Chair can differ from that of other Councillors i.e. a higher sum may be paid in lieu of extra duties and responsibilities that are required of the Chair, but otherwise the sum shall be the same for each Councillor.
A basic allowance paid to a Councillor is not a salary, but it is treated by HMRC as taxable income. A council is obliged to deduct income tax, where appropriate, under the PAYE system. A council may also pay Councillors and co-opted Councillors travelling and subsistence allowances if they choose to do so.
The payment of Councillors’ allowances is subject to a statutory process which involves a local remuneration (independent of the local council) panel, whose role is to make recommendations as to the level of the various allowances that a council can pay.