Discount Rail Cards

payrollpro

I am happy that if an employer pays for transport for an employee to commute to work and back home again that it is a taxable benefit, except under certain circumstances, but what if the employer buys a Young Person's Rail Card and gives it to the employee?

This does not provide transport but allows the employee to get a discount on whatever travelling they do.

My gut feeling is that since the travel is going to be commuting and in any case there is no control over what travel it is used for, personal or business, that the cost of the discount card is a BIK, but what do others think and has anyone been involved in such schemes?

Payrollpro

PGM

Tricky one;

If its bought for them to do business, and they do business journeys with public transport, I think it should be an allowable business expense. Wouldn't private use then just be incidental?

payrollpro

Hi,

I am pretty certain that despite what I am being told these cards are designed to allow young employees to obtain discounted travel for commuting. The age of the persons involved precludes the idea that this is for business travel. Mind you I wonder if this policy would offend the age discrimination laws!!!

This appears to be the employer trying to provide some help to their young employees and this card can give discounts of up to one third, so it's very attractive for the up front £25 cost! I am mindful of the comment in 480, paragraph 2.3 - "There is no relief for any costs relating to ordinary commuting ..." because what I was also considering was treating the card as a "trivial benefit" and hence exclude it that way, but the wording in 2.3 seems to suggest that the trivial benefit rule would be suspect in this case.

Again, my gut feeling is to accept it as a BIK and then exclude it as trivial but I am open to suggestions.

Payrollpro

"Youth and vitality are no match for age and treachery"