Tax & NI Saving on Bus Work Commute

blackbelle_2

Hi

Sorry if this has been posted before.

I noticed that another poster had mentioned the government's 'Green Transport Plan', specifically the 'Cycle to Work' scheme, on this thread:
http://forums.moneysavingexpert.com/showthread.html?t=217115&highlight=green+transport+plan

A friend of mine works in the public sector and she says they are looking into implementing a another, lesser-known tax and NI savings scheme available under the 'Green Transport Plan', under which employees of companies can benefit from important tax and NI savings on the cost of their daily bus commute to and from work under a 'salary sacrifice', and employers can benefit from a saving on their employer national insurance contributions.

Not many employers seem to offer this salary sacrifice scheme, which is really unfortunate as the saving involved is quite significant :-(

Blackbelle



,

AdrianHi

There are other salary sacrifice scheme around for child care costs for example.
Employers have enough red tape on their hands thats its no suprise they don't want to bother about other schemes which are in the end no benefit to them.

What is needed is a way for people to claim tax back on expenses like this themselves, may be through self assessment forms, so employers do not need to get involved. But then there is an admin cost implied in processing those claims which costs the government instead - which is probably why they tried to push that burden onto employers in the first place.

blackbelle_2

AdrianHi wrote: »

There are other salary sacrifice scheme around for child care costs for example.
Employers have enough red tape on their hands thats its no suprise they don't want to bother about other schemes which are in the end no benefit to them.

What is needed is a way for people to claim tax back on expenses like this themselves, may be through self assessment forms, so employers do not need to get involved. But then there is an admin cost implied in processing those claims which costs the government instead - which is probably why they tried to push that burden onto employers in the first place.

I agree that the best way forward would be for people to claim back directly via self-assessment, it's a great idea but hey-ho, the chances of that happening ....

The upfront expenditure involved is a cash-flow killer for small or struggling companies, although I am led to believe they end up better off ultimately due to NI savings ... they may have gone bust before they benefit!

But for those of us who work for large - esp public sector - employers, and who use the bus to commute to and from work, it might still be worth looking into whether your employer already has this scheme in place - could save you £s on your season ticket.

AdrianHi

blackbelle wrote: »

although I am led to believe they end up better off ultimately due to NI savings

Employer may appear to be better off due to NI savings on the surface.
We and many of our friends with children in nursery have been trying the last couple of years to get our employers to do salary sacrifice for nursery care vouchers. It's the exact same situation for the travel expense situation you are talking about.
It doesn't seem to matter what you tell them, how much evidence you collect, how many third party companies handlign admin. for you you suggest, they just see it as more administartion and therefore cost to them and they are not interested.
May be the NI savings are too small for them by the time they have paid someones salary to administer such a scheme even if you do use a third party company.

Mark_Hewitt

My employer offers the cycle to work scheme and a special deal for reduced bus fares (not salary sacrifice). However the 'special' deal they have for a weeks bus pass is the same as it costs me to add plus bus to my rail ticket, so that's useless.

Now what would be good is if I could buy rail season tickets from my untaxed income, that would save me a packet.

blackbelle_2

AdrianHi wrote: »

It doesn't seem to matter what you tell them, how much evidence you collect, how many third party companies handlign admin. for you you suggest, they just see it as more administartion and therefore cost to them and they are not interested.

I do sympathise. I have some knowledge of the childcare vouchers scheme, and it is actually an easy scheme to administer via a third party company. Of course it depends on the size of company and the level of employee participation, but I'd reckon you'd be looking at a huge company before the equivalent of one additional person would be required solely to administer such a scheme.

In these days of salary freezes and even worse, salary cuts, I think that employers who are in a position to, should at least give a little consideration as to whether it is feasible for them to help their employees to stretch the money they do have a little further, through this kind of scheme. It's essentially another employee benefit, and a low/no-cost one at that.