Allowances are taxeable in VS, and they have already been taxed when you get them. Inland revenue assume you will spend 75% of them and tax at 22% of the remaining 25% is deducted at source and paid by the company.
Dan, you're wrong. That's how it
used to be. Since 1 Apr 04, the allowances paid down route are
entirely tax-free. This arrangement came after extensive negotiations between the company and the Inland Revenue, who have since suggested that this may become the standard way of doing things for other UK airlines. Whether it does or not, this is now the deal for us, and it will remain so for the foreseeable future.