Navigating the company transport policy maze


21-04-2003

By David Halstead of Deloitte & Touche



At long last we have some progress on Cambridge's transport infrastructure problem.

The upgrading of the A14 has been announced and that other much talked about link, the light rail to St Ives, has reached planning stage.



But despite this progress, we are clearly some way off the transport infrastructure that Cambridge needs to support its growth. And under these conditions, developing a sensible policy towards whether or not to contribute to employees' costs of travel to work is a real headache for a growing number of employers.



Does the tax system provide any answers? To an extent, it does. For instance, it provides benefits for 'works bus services' and 'cycles and cyclists' safety equipment', among others. While these initiatives are sensible, I suspect there are few employees that have started using bicycles because of the tax breaks. Similarly, works buses are a good idea if the route planning can be done in a sensible way. But more often than not, buses tend to cause loss of independence for the employee, which can be a problem.



And what about company cars? Despite increases in taxable benefit levels over the last few years, on balance employees are still likely to value the perk of a company car. However, the costs to the company, including the administrative costs of P11D reporting and the like, should be carefully considered. One note of caution - the taxable benefit of free fuel has risen sharply over recent years to the extent that the tax payable in many cases exceeds the actual cost to the employee of paying for the fuel. For the time being, provision of parking spaces is not a taxable benefit and parking spaces are now among the most sought-after benefits for many employees.



There are two more general areas worth considering, particularly since they have little or no cost to the company:



  • Is a degree of flexible working for employees an option? This may allow them to beat the morning rush or get cheaper fares on the train. But be careful to consider potential conflicts where some employees, because of the nature of their roles, cannot take advantage of flexible working.



  • In encouraging the take-up of particular travel policies such as car sharing or use of the park and ride, ensure that a clear policy is in place to cover exceptional circumstances, for instance use of taxis when people work late.



    There is always, of course, another option. Up until a few years ago there was specific tax relief on the costs of keeping a horse for employment-related use. Not surprisingly, the Government bolted the stable door on that one!



    David Halstead is a Partner at Deloitte & Touche in Cambridge. Contact him by email dhalstead@deloitte.co.uk





    21 April 2003





    This article first appeared in Tangent, a fortnightly column offering business advice and comment
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