Fleet News

Firms face tax penalties over staff bus schemes

THE Government is jeopardising its push for integrated transport by taxing firms thousands of pounds for providing buses for staff as an alternative to the car. Subsidised transport is considered as a benefit-in-kind and instead of each employee facing a tax bill, a general charge is being handed to firms, either to be handed on to workers or absorbed by the company.

The Inland Revenue's tax policy flies in the face of the vision of green transport provided in Deputy Prime Minister John Prescott's recent white paper on integrated transport. As part of the white paper, Prescott announced local transport plans which would encourage the use of buses and he has spoken forcefully about them holding a vital role in the push for viable alternative transport.

But Roger Hargreaves, director of Telford, Shropshire-based photocopier manufacturer Ricoh, which has paid out £75,000 in back-taxes to the Inland Revenue for a bus service started for staff, says the Inland Revenue could scupper the Government's 'green' ambitions.

Seven buses ferry around 300 staff a day to and from work, cutting down on non-essential traffic. But it falls foul of tax laws because it is subsidised, therefore being treated as a benefit-in-kind. The firm faced paying out up to £30,000 a year to the Treasury on top of the £100,000-plus it pays to run the service.

Hargreaves said: 'We told the Inland Revenue that we had no option because our location on a business park means there is no other way of getting the workforce in, but they would not agree. We had no choice over whether to pay. If we were late in settling, they would have started fining us £200 a day. 'We are now considering whether we will have to stop the bus service and see staff put 300 cars on the road, which is ridiculous if you consider what John Prescott has said.'

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