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Tax Allowances

Volume 505: debated on Friday 5 February 2010

To ask the Chancellor of the Exchequer (1) whether HM Revenue and Customs will continue to provide exemption from taxation for existing free travel to work benefits; (313684)

(2) how much revenue has been raised by the change to HM Revenue and Customs' rules on travel to work benefits;

(3) which travel to work schemes will be regarded as a taxable benefit by HM Revenue and Customs in 2010-11;

(4) whether recent guidance issued by HM Revenue and Customs will (a) restrict and (b) remove the exemption from taxation in respect of free travel-to-work benefits;

To ask the Chancellor of the Exchequer (1) what assessment he has made of the effects on those who participate in the Salary Sacrifice Travel scheme of his Department's recent revisions to its guidance on the scheme. (315667)

There have been no changes to the employment related travel expenses rules since 1998 or to benefits related to travel to work since 2002.

As a general rule, tax relief is not given for the cost of travelling between home and the workplace. Legislation (sections 243 and 244 of the Income Tax (Earnings and Pensions) Act 2003) sets out the conditions under which relief for a benefit received as a consequence of an employer’s support for local bus transport and for Cycle to Work schemes apply.

In December 2009, HM Revenue and Customs (HMRC) updated its guidance relating to these schemes to clarify the conditions that need to be met in order for relief to be available. The revised guidance is available at:

http://www.hmrc.gov.uk/specialist/cycles_bus_passes.pdf

The changes to HMRC's guidance do not widen or restrict the scope of the legislation.

Information on the revenue implications and the effects on users of these schemes as a result of the change in guidance is not available, as HMRC does not hold the detailed data necessary to produce this analysis.