Saving tax on train season ticket paid for by company

Th355

Hi all

So I have a new job in London to which I will be commuting daily from Reading.

The train season ticket is £4K, so naturally I'm looking to save a bit of tax here where I can.

If my work salary was reduced by £4K, my net pay would reduce by £2k pa. If my work then bought my season ticket for me and provided it for free, am I correct in saying it would get added to my earnings but I would only pay NI (not IT) on it? If so, the total cost of the ticket to me would only be the £2k reduction in net pay + the NI payments of 12% * £4K = c£2.5k?

Thanks for all the help!

T

uknick

If your employer bought you a season ticket you would have income tax to pay as it is considered a benefit in kind. It would not be added to you salary for tax purposes, but would be a reduction in your personal allowance.

As you say, you'd also have to pay national insurance on the amount of the ticket.


https://www.gov.uk/expenses-and-benefits-public-transport/what-to-report-and-pay


Season tickets provided for employees

This also includes any other public transport vouchers you provide to employees.
You must:

• report the cost on form P11D
• add the full cost to their earnings and deduct Class 1 National Insurance (but not PAYE tax) through payroll