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Old 20th Nov 2009, 10:34
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Juan Tugoh
 
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The allowance system has been a useful tool in the past - it enabled the company to pay effectively a higher take home salary by exploiting a marginal tax rate on allowances. It also kept the pensionable pay of those on allowances at a much lower level. For crew it made up a low basic salary into a more reasonable take home and acted as a bribe to ensure crew turned up for "poor" trips.

What is a amazing is that it has taken HMRC so long to tackle the misuse of a system of meal allowances. The system should provide you with money to eat while downroute, not pay the mortgage at the end of the month. Sadly for those heavily reliant on allowances HMRC have looked at it and due to poor returns when they undertook the review have decided to re-assess the taxation rate on what is now obviously now far more income than meal allowances.

Unions that clung to the old allowances and premiums now have the job of trying to address what will effectively be a paycut for their members, but a paycut driven by the government not BA
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