Budget 2011 – Subsistence Allowances
The Government have confirmed that new legislation will be introduced in Finance Bill 2011 to create an income tax exemption where subsistence allowances are paid to experts seconded to EU bodies located in the UK. This measure was first announced in a Written Ministerial Statement made by the Exchequer Secretary to the Treasury on 16 December 2010.
The measure will ensure that those on secondment to a body in the UK are not at a disadvantage and also help to ensure that the three EU bodies in the UK can attract high quality experts who would not be taxed on subsistence allowances if the bodies were located elsewhere in Europe.
The new measure will have effect on allowances paid in respect of periods beginning on or after 1 January 2011.