One of the things that the lockdown period has sparked is a debate about what our public transport system should look like as we come out of lockdown and how we balance the need to use public transport safely and within guidelines with an understandable desire to encourage more people to choose public transport over driving. This has been partly inspired by the noticeable improvement in air quality during the lockdown period.
The below council motion highlights a way that employers can make season ticket usage more attractive to employees, therefore encouraging employers to be part of our ongoing commitment to reversing the climate crisis.
Motion 1 – Tax relief for season ticket travel
This Council notes that:
- In his article for the Daily Telegraph ‘Tax Relief just the Ticket’ (6 October 2013), journalist Boris Johnson called for employees to be ‘allowed to pay for their season tickets from their pre-tax income.’
- Mr Johnson advocated for the introduction of a new tax relief scheme, limited to the basic rate, whereby ‘the employer would buy the season ticket and deduct the cost from his or her (employee’s) pay packet – and only then would the employee be assessed for tax.’
- The impact of such a scheme would mean that employees would have less taxable income reducing their liability for income tax and national insurance and the employer would also save on national insurance contributions.
- An annual season ticket costs a commuter from [PLACE] to [PLACE] £X,XXX, a Train commuter from [PLACE] to [PLACE] £X,XXX, and a Bus commuter with [COMPANY] £XXX.
- Such a tax-relief scheme would represent a significant financial saving for our Borough’s commuters.
- Council further notes that now Mr Johnson is Prime Minister he has it within his power to put his aspirations for tax relief on seasonal travel tickets into practice.
Council resolves to:
- Council resolves to ask the Chief Executive to write to the Prime Minister and Chancellor of The Exchequer to request that this Government introduces a tax-relief scheme.
- This would be on seasonal travel tickets (following the principles outlined in Mr Johnson’s Telegraph article in 2013) making this effective as soon as possible.
This is a bad idea. Tax policy should be formulated in the round, not created ad hoc for special cases such as train or tram season tickets.
There are already tax reliefs for travelling to work by works buses, cycling, late night taxis home, free parking at work, and charging electric cars at work. If you want to use the tax system to change behaviour, review all the tax reliefs for a specific area (such as travel to work) and formulate a coherent policy to cover all the parties to the transaction - in this case employees and employers. Also consider the self-employed as part of the tax policy.
I would love to be involved in creating coherent tax policy on behalf of the Party. Please approach this problem in a more responsible manner.