Traditionally employees have had to pay for commuter journeys out of net income, and as a result they face tax charges and National Insurance on employer-provided benefits such as subsidised or free public bus services.
But recent Finance Acts have offered concessions such as the right of employers to provide a bus to convey employees between one workplace and another without generating a tax charge.
Employers are also now allowed to support public bus services to secure the services required by their staff, although this is only tax exempt if employees pay the full ticket price.
But the Inland Revenue has received calls from employers who would prefer to subsidise an existing local bus service, rather than run a bus themselves. They have asked for a tax exemption so that any subsidy they pay to a local bus company that allows their staff to be carried free or pay reduced fares would not create a tax or NIC charge.