To ask Her Majesty's Government what incentives are currently available through the income tax system to encourage those going to work to travel by (a) bus, and (b) rail. [HL1764]

There are two incentives available specifically for bus travel to work. The first exempts an employee from tax and national insurance contributions (NICs) on the benefit of an employer-provided work bus service, subject to certain conditions. There is a second exemption from tax and NICs where an employee benefits from an employer giving a subsidy or other support to a bus service provider to introduce, continue or improve a local public bus route. This exemption is subject to certain other conditions and does not apply where a subsidy is provided for local bus services generally.

There are no specific incentives for rail travel to work. However, an employer can provide an interest-free loan, or a loan with a rate of interest below normal commercial rates, to an employee. Subject to certain conditions about the amount of the loan, the interest foregone on the loan is not treated as a taxable benefit. This loan may used to assist the employee in the purchase of a season ticket for public transport by bus or rail but is not confined to this purpose.