Exemption for employer-provided work bus services and subsidies for public transport

Flexi-season tickets have been introduced in response to the hybrid working model. These tickets help hybrid workers manage travel costs when commuting on an occasional basis. Here we discuss the benefits that can save your employees tax, and do not require you spending too much money.

• In the majority of cases, this type of benefit would be subject to tax and NIC in full as well as reporting consequences.
• Gary splits his time between Israel and the UK helping clients with accounting and taxation, as well as business development and planning.
• It cannot, therefore, apply where a loan is made by a company, even where that company is controlled by somebody with the relevant personal relationship.
• Originally from Borehamwood, Hertfordshire, Sam graduated from The University of Leeds before training to become a chartered accountant at a firm in central London.

Designing Effective Commuting Benefits for Employers

One way to reward your employees and improve the efficiency of your business is to award your employees for suggestions that benefit your business. Suggestion Schemes have been around for years, the key is to encourage your employees to use them. Employees ‘sacrifice’ a proportion of pay for these benefits, lowering their overall salary and therefore the tax and National Insurance they are liable for. Along with broadening the net of potential new recruits, the scheme helps support employee retention through better supporting employees with their commute. Employers can also decide the repayment period to ensure the scheme works in the best way possible for the employer and the employee.

If your business is providing credit to consumers under regulated agreements, then you will need a consumer credit licence. Shimshon is originally from London and has qualified as a bookkeeper and payroll accountant in Israel. He has vast experience in all payroll matters and manages our payroll department. Driven by his strong work ethic and enthusiasm for all things financial, Doron has excellent customer focus and particularly enjoys working in the areas of accounting and taxation. Sara’s experience includes six years as a Bookkeeper for a UK company, as well as several years training bookkeepers and accountants on the use of accounting software. David understands the challenges of business development and enjoys creating long term business relationships with the clients.

Employee perks at a 12-year low

Employers should provide clear guidance to help employees weigh immediate tax savings against potential long-term reductions in statutory benefits. Salary sacrifice arrangements can enhance an employee’s benefits package, offering perks like higher pension contributions or health insurance. While these benefits improve financial security, employees must understand their broader implications.

Employees would normally buy shares at the market value on options that are first offered (grant). Employees can then profit from any growth in the company when they sell their shares after a period of time, determine by you. If the public transport costs aren’t exempt, you may have to report them to HM Revenue and Customs (HMRC), and deduct and pay tax and National Insurance. Changes in recent years have seen the scheme become even more popular and it’s become a key part of many business’ employee benefits offering.

Simon joined FKGB as a Junior Trainee Accountant in 2025, after completing his studies in Economics and Management in Milan and pursuing a Master’s in Financial Economics at Reichman University in Israel. Before joining FKGB, he managed bookkeeping and logistics for a family-run jewelry business and interned at BNL – Group BNP Paribas, where he rotated through key departments including Investment Banking and M&A. Simon is highly motivated to develop his expertise in accounting and financial analysis while contributing meaningful value to clients. Employers have the flexibility to determine the repayment period, ensuring the scheme works effectively for both the employer and the employee.

Changes to our attitude towards the environment

Bradley joined FKGB as a Junior Accountant in January 2023 after his recent move to Israel. In 2020, Bradley completed a Bachelor of Business/Bachelor of Banking & Finance specialist degree from Monash University in Melbourne. Bradley is driven to go the extra mile to create value for clients and make a meaningful impact.

Example: Loan for travel season ticket renewal

Solomon joined FKGB in 2021 with several years’ bookkeeping experience, as well as having worked as VAT and payroll manager for a number of companies in the U.K.He works from the U.K. Gordon trained in auditing at Price Waterhouse in London, qualifying as a Chartered Accountant in 1990. He set up the practice, Gordon Levy Limited in 2007, specialising in auditing from 2013 onwards. With a vast knowledge and experience, he is always on hand to advise and assist the firm’s clients.

To pay for this out of her take-home pay she would need to receive gross pay of £9,500 (i.e. £9,500 less tax at 40% (£3,800) and Class 1 NICs at 2% (£190)). The tax charge generally arises on the difference between interest at the appropriate ‘official rate’ (currently 2.25%) and the interest (if any) actually paid. If the loans are made by a public company, then this financial assistance is unlawful unless it falls within certain limited exceptions. If the loan is made by a private company, this will generally be permitted, unless it is for the purpose of acquiring shares in its parent company where that parent company is a public company.

• This exemption applies to the charge in respect of a loan and also applies where a debt is released or written off.
• These options help employees manage commuting costs and adjust taxable income, which can be appealing in today’s economic climate.
• Lots would prefer to go by rail, tram, or some form of more environmentally friendly public transport; however, the cost can be an issue.
• One potential drawback is the impact on statutory benefits, such as maternity pay or redundancy payments, which are often based on pre-sacrifice salary levels.
• Loans to directors require shareholder approval in advance under the Companies Act 2006.

The agreement itself must contain certain key terms, including a 14-day withdrawal period. These requirements mean that you will need specialist documentation and the arrangements used for standard interest-free loans, eg season-ticket loans, will not be suitable. A loan will be exempt from the CCA in certain circumstances, the most common of which is if the rate of interest does not exceed 1% above the base rate of certain banks. As an employer covering your employees’ public transport costs, you have certain tax, National Insurance and reporting obligations. You can help attract and retain your key employees through a tax favoured scheme, such as an Enterprise Management Incentive (EMI).

However, HMRC are likely to take a close look at cases where such a claim is made. However, you need to tread carefully as some types of loan may be caught by the Consumer Credit Act 1974 (CCA). The CCA also catches not just straightforward cash loans, but also certain types of credit agreement such as deferred payment share plans. Employers should provide detailed information about the benefits and potential impacts, including how they affect net salary, tax liabilities, and future entitlements.

Loans to directors are generally prohibited under the Companies Act 2006, although loans not exceeding £10,000 are permitted and larger loans may now be made with the approval of the members. are work season ticket loans taxable Loans to directors require shareholder approval in advance under the Companies Act 2006. If that consent is not obtained, then the loans are voidable, although may be affirmed by shareholders after the event. She graduated from the University of Birmingham with a first class honors in Economics. David joined to FKGB in 2019 having spent 6 years in the financial department for a real estate developing company in Cali, Colombia. Having qualified in London in 2019 he decided to move to Israel in pursuit of a new life and joined the FKGB team as a senior accountant having spent time in mid tier firms in London.

In the majority of cases, this type of benefit would be subject to tax and NIC in full as well as reporting consequences. However, there are some common ways that an employer may assist an employee with their commuting costs that are exempt from tax and NIC. For example, an employee earning £50,000 annually who sacrifices £5,000 for pension contributions lowers their taxable income to £45,000. This could move them from the higher 40% tax band to the basic 20% band on the sacrificed amount, resulting in significant tax savings. Additionally, National Insurance contributions, which are 12% for earnings up to £50,270 in the UK, can also be reduced, enhancing the financial benefits. Big changes to our way of living in recent times has made the scheme even more popular.

Loans made to employees to buy season tickets

Employees are often drawn to salary sacrifice arrangements for their potential financial savings. By redirecting part of their salary towards non-cash benefits, employees can lower their taxable income, reducing income tax and National Insurance contributions. For those nearing a higher tax bracket, this approach can help them remain in a lower tax band, further reducing liabilities. When combined with salary sacrifice, season ticket loans can further reduce an employee’s taxable income. However, this may also affect National Insurance contributions and pension entitlements.