Fleet News

Tax system derails green travel plans

THE Government's tax treatment of green commuter schemes is in a desperate mess, and actively hinders all environmentally-friendly transport plans, according to a new report from the Open University's Faculty of Technology. 'There are no examples where 'green' measures receive a preferential tax treatment over a 'non-green' alternative - indeed the opposite is so,' declares the report, 'Tax and Green Transport Plans'.

It found the UK's current tax system is 'an entirely negative influence' on employer initiatives designed to promote more environmentally-responsible travel for their staff. 'The existing tax system clearly discourages key green transport plan measures and encourages unsustainable travel behaviour,' said the report.

Yorkshire-based Johnson & Johnson Medical, for example, saw 200 employees stop using a subsidised public bus service to work, after the local Inland Revenue tax inspector decided they should be taxed on the benefit. Southampton General Hospital, on the other hand, pays an income tax bill of £7,500 per year, incurred by staff who use its park and ride scheme, rather than go through the P11D complexity of calculating employees' day-by-day tax liability.

'Tax and Green Transport Plans' suggests the Treasury revises the tax system to allow a 'de minimis' tax break for staff, which would ignore for P11D tax purposes the first £500 'benefit' of any plan which replaced car commuting with a greener mode of transport.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee