I've worked for a few airlines and the allowances and tax paid on them varies considerably. At one airline I was told that longhaul allowances are taxed less than short haul, as we are out of the country and have no choice but to buy meals in restaurants etc, which is what the allowances are for. With short haul, you get the money but mostly go home and eat at home, so the allowances aren't spent on high cost restaurant meals.
I'm with Virgin now. Our allowances are tax free paid down route, but not very much, certainly less than I got when I flew long haul charter. Sector pay is paid into our salary and all of that is taxable at the standard rate. I guess that's because that money isn't meant to feed us downroute. Of course, allowances are paid in foreign currency, so we lose out when we change any leftovers back into sterling.
If the allowances are tax free, you can't claim to earn that and if you apply for a loan or mortgage, then they go by your salary and don't count the tax free allowances.
Didn't dear Gordon just announce that the 10% tax bracket is disappearing, so we'll be paying more tax anyway shortly. You've got to love him
