Boris Johnson and Rishi Sunak will escape hovering vitality payments inflicting distress for tens of millions this spring due to a ‘cap’ on contributions to their grace-and-favour houses.
The PM and the Chancellor are solely responsible for a ‘profit in variety’ to cowl heating and utilities on the official residences in Downing Road the place they dwell rent-free.
And the worth of the profit is proscribed to a most of 10 per cent of their ministerial wage – that means they solely pay a couple of thousand kilos a yr in the direction of the payments on the properties.
The boon may be revealed amid fears that six million households may very well be left struggling to warmth their houses with vitality costs on observe to spike by greater than 50 per cent in April.
It can heap stress on Mr Johnson and Mr Sunak to give you a means of easing the ache for households as rampant inflation within the wake of the pandemic sparks a price of dwelling disaster.
Boris Johnson (left) and Chancellor Rishi Sunak (proper) are solely responsible for a ‘profit in variety’ to cowl heating and utilities on the official residences in Downing Road the place they dwell rent-free
A Decision Basis report in the present day predicted that greater than 1 / 4 of households will likely be pushed into gas poverty when the federal government’s worth cap lifts
Below authorities guidelines, the PM and Chancellor have a tax legal responsibility for bills ‘regarding the use’ of their official flats, comparable to heating and lighting
Below authorities guidelines, the PM and Chancellor have a tax legal responsibility for bills ‘regarding the use’ of their official flats, comparable to heating and lighting.
The worth of the profit is capped at 10 per cent of their ministerial salaries – so not together with their MP pay.
In accordance with the newest Treasury accounts, Mr Johnson had a advantage of £7,500 for the No11 flat in 2020-21, whereas Mr Sunak’s at No10 was £6,800.
The precise price to them will depend upon their complete taxable revenue, however is more likely to be between £3,000 and £3,300.
Crucially it is not going to change regardless of the eye-watering payments for the remainder of the nation.
The Treasury accounts state: ‘The Chancellor and Prime Minister have using their official residences at Downing Road.
‘Bills regarding its use, comparable to heating and lighting, are chargeable to tax underneath the phrases of the Revenue Tax on Earnings and Pensions Act 2003. The profit in variety is capped at 10 per cent of gross wage.’
The politicians additionally pay council tax on the properties.
Mr Johnson lives within the four-bedroom house above No11 with spouse Carrie and their kids. There’s a £30,000 a yr taxpayer allowance for upkeep and enhancements, however Mr Johnson has been closely criticised for initially attempting to get donors to pay for a way more costly refurbishment.
Mr Sunak lives within the flat above No10 along with his spouse and two daughters. Since Tony Blair premiers have tended to decide on the No11 residence as a result of it’s bigger.
Mr Johnson earns simply over £75,000 as PM, on high of his £82,000 wage as an MP. Mr Sunak receives £67,500 as Chancellor plus his MP pay.
A Authorities spokeswoman mentioned: ‘As has all the time been the case, the Prime Minister and Chancellor are supplied with residential lodging in Downing Road.
‘As agreed with HM Income and Customs throughout successive Administrations, Ministers then pay a tax cost for this profit in variety which relies on their Ministerial wage.
‘It’s not doable to disaggregate the vitality prices of 10-12 Downing Road, as it’s one mixed constructing.’
A Decision Basis report in the present day predicted that greater than 1 / 4 of households will likely be pushed in the direction of gas poverty when the federal government’s worth cap lifts.
Vitality regulator Ofgem is reviewing its present cap, which will likely be revised in February after a record-breaking six months of skyrocketing wholesale costs.
The report additionally revealed that ranges of gas poverty are more likely to be highest within the northeast and the West Midlands, at 33 per cent and 32 per cent respectively, alongside pensioner households, these in native authority housing and people in poorly-insulated houses.
The think-tank’s senior economist Jonny Marshall mentioned: ‘Rising gasoline costs are inflicting vitality payments to soar, and can see the variety of households affected by ‘gas stress’ to treble to greater than six million households this summer season.’
Mr Johnson lives within the flat above No11 Downing Road with spouse Carrie and their kids (pictured collectively at Chequers final month)