David Cameron benefited from 'prime ministerial expenses deduction'
David Cameron benefited from a little-known perk when he took office in Number 10, claiming £20,000 of his £142,500 salary tax free.
The "prime ministerial expenses deduction" began in 1947, when it was set at £4,000, to cover costs incurred by the occupant of No 10 in the course of official business.
After claiming the allowance in 2010-11, Mr Cameron voluntarily declared extra taxable income to cancel out the perk in subsequent years before officials found a way to waive it entirely from 2014-15.
A Downing Street source said by the time Sir John Major left office in 1997 the allowance stood at £8,000 but it rose to £20,000 during Tony Blair's term in Number 10.
RNS Chartered Accountants, the firm which produced the schedule of the PM's income tax affairs, explained the situation in notes accompanying the information.
"We understand that, like Prime Ministers before him, the Prime Minister is entitled to a Prime Ministerial expenses deduction (£20,000 when he came to office).
"This is a longstanding practice, begun in 1947, intended to cover business expenses incurred as a result of holding the office of Prime Minister.
"It is expressed as an allowance but is given as a tax-free deduction from the Prime Minister's salary."
The notes continued: "In 2010-11 the Prime Minister received this expenses deduction. In 2011-12, 2012-13 and 2013-14, the Prime Minister also received the deduction but voluntarily cancelled it out by declaring the equivalent amount as taxable income.
"From 2014-15 he waived the deduction altogether."