What is a season ticket loan

klondyke

isasmurf wrote:

I take the loan, stick it in high interest savings account, and buy my season ticket on a 0% credit card deal. So the loan remains in my savings account for a whole year!

I reckon that's the best way, if company allows. I used to find that company insisted on buying the ticket, so I didn't take up loan as I preferred the element of insurance against accident on public transport if paying with credit card. (Paranoid, maybe, but I was on a train behind the 'Clapham disaster'.)

Bargain_Rzl

Just an update on the tax situation on season ticket loans...

After reading other posts on this thread, I emailed our HR manager to ask whether the tax status has changed.

His answer? No. Season ticket loans have always been tax free. (i.e. you pay no tax on the salary advance (which is what it effectively is) which is made to you in the month you need to buy your season ticket).

However the repayments are taken from your net salary. In other words, the season ticket costs exactly the same at the end of the repayment period as it would have done if it had been paid in full by the employee at the outset.

If anybody believes this to be incorrect please add to this thread, and I'll re-open the discussion with HR manager.

Rafter

Bargain Rzl

Sounds correct to me.

The season ticket is still payable out of taxed income so if the annual season ticket costs £1100 you will end up paying £1100. Where you save is not having to find the cash up front and getting an 'interest free' loan from your employer effectively.

There is a £5000 limit on tax free loans to employees so most season tickets would come under this threshold. Your HR manager is therefore right that these loans have effectively been tax free all along.

R.