An unpaid tax bill run up by city council leader John Gilbey will be cleared using taxpayers’ money, it's been revealed.

In a leaked email, it emerged the Tory unknowingly racked up a £1,250 debt after failing to pay any tax on his mileage claims for the last five years.

But after Her Majesty’s Revenue and Customs (HMRC) ruled he needed to stump up the cash, the council agreed to foot the bill, saying it had wrongly advised Cllr Gilbey on his tax position.

The gaffe was only uncovered after bosses wrote to HMRC to ask if councillors should be paying tax on their mileage expenses.

It ruled only Cllr Gilbey should be forking out as it considered the Military Road council offices his place of work, while other councillors primarily worked from home.

The Conservative, a former CEO of an international mining company who received £27,730 in council allowances last year, will have to pay any future tax himself.

The council said it would have covered the backdated tax of all 50 councillors had HMRC decided they were all liable to pay.

But the decision to cover Cllr Gilbey’s bill was met with surprise by Andy Silvester, from the Taxpayers’ Alliance, who said hard-pressed taxpayers would be “baffled” that their council tax is being used in this way.

He added: “It’s especially galling in the aftermath of the decision to reject a proposal to reduce allowances.”

Mr Silvester was referring to the Tories’ refusal of a Liberal Democrat bid to lower members’ allowances when the council set the district’s budget for the year in February.

Lib Dem leader Cllr Alex Perkins said that while the unpaid tax was “an honest mistake” on the council’s part, it was a matter for Cllr Gilbey’s conscience as to whether he allowed the authority to pay it back for him.

He said: “It does seem strange that council officers have made this decision, but they are operating within a framework.

“Cllr Gilbey was simply paid what he was told he was entitled to.

“It was an honest council mistake and they’re correcting it. But it’s up to individual councillors to ask themselves how they feel about it.”

Explaining the decision, council spokesman Rob Davies said: “Because councillors had been acting on the presumption of non-tax, with no deliberate intent not to pay, and because we decided to approach HMRC to seek clarification on this matter, the council would have paid for all of the councillors’ backdated tax had that been the ruling.

“As it is, only the council leader’s tax has to be paid for the last five years. In future years, he or she will pay it themselves.”

Mr Davies said the decision was made by the council’s chief executive and director of resources with no political pressure.