6e Travel Plans and Income Tax

The provision of certain measures introduced as part of a Travel Plan can be viewed as a taxable ‘benefit in kind’, for example the cost of a season ticket to allow the employee to travel to and from work. There are a number of situations, however, where tax and also National Insurance Contributions do not apply.

WORKS BUSES

There are no National Insurance Contributions or any tax to pay when an employer operates a works bus. A works bus is defined as any bus or coach service vehicle, seating 9 or more passengers, provided by the employer and available to employees to transport them to and from work.
Frequently asked questions

Q. What if I have a small workforce and cannot afford to provide a works bus?
A. Any number of employees can join together and hire a works bus for their combined workforces.

Q. Can employees use the works bus for other journeys?
A. Yes, as long as the works bus is used mainly for the journey to and from work, employees and their families can also use the bus occasionally for other journeys without affecting the exemption.

Q. Do workers have to be employees of the employer to use the bus?
A. Not necessarily, for example, temporary staff working for an employer but paid by an agency can still use the bus.

SUBSIDISING BUS SERVICES

An employer can subsidise a bus service but employees must pay the same fare as other paying members of the public.

Frequently asked questions

Q. When do subsidies to bus services qualify for tax relief?
A. If an employer pays a subsidy to a public bus service (i.e. one that anyone can use) tax is not paid on this benefit. However if this subsidy means that the employee travels free or pays a lower fare than other passengers, then the difference in price is subject to tax.

Raising Awareness
Establishing User Groups
Analysis & Feedback
The Use of Consultants
Travel Plans & Income Tax
Example Questionnaire
Example Registration Form