Board payment is tax on car mileage

The National Housing Federation document To Pay or Not To Pay refers to a contract of employment (the place of work, most likely, head office) and to levels of payment according to annual turnover, with £3000 per year at the median level. This would be modest but meaningful and about right for most housing associations.

But expenses for car mileage from home to work, which may be considerable for some board members, would cease to be allowable.

The £3000 could be wiped out and RSLs would do better to continue as they are with reimbursement of such expenses; likewise in the case of new members with more than just a short journey to work.

The advantages that might otherwise be seen to accrue to the organisation because it can, through payment, retain and attract good people with skills that are needed, could be forfeited. RSLs would not be able to compete for such people with other public bodies, such as NHS trusts, where board members are obliged to live in the locality, and car mileage is not an issue.

And all of this at a time when the movement is being exhorted by government to continuously improve the quality of its governance – which is where, of course, a payment system came in in the first place.

The position is complicated, but since it affects all RSLs, may I assume the NHF is discussing this potential problem with the Inland Revenue?