Season Ticket Loans

speegs

Hi

My bosses are offering us employees interest free season ticket loans for our travel expenses when we move to our new offices in June 09. What I want to know is will I be liable to an income tax charge as my loan will be more than £5000? I seem to remember something from my college days about having to pay tax on the element of underpaid interest when compared to the official interest (set by HMRC currently 6.1% I think) on loans of more than £5000. But employers seem to think that season ticket loans are exempt from income tax. The HMRC website is somewhat unclear on this matter. What do you all think?

Thanks

Speegs

deanshepherd

There is no exemption for season ticket loans.

The £5,000 limit is all or nothing so if your loan is £5,001 then you will be assessable on the entire loan, not just the amount over £5,000.

Incidentally, how far away from work will you be living? £5,000 is a lot for a train ticket!

Further guidance here.

speegs

Well for me the travel fare will be just £1472 and I will be able to save up most of that by the time we move office, but many other staff live a lot further and they require larger loans, some of which will be more than £5000.

I am glad I was correct though. I thought I was going mad.

Thanks for the help.

Speegs