Employer-supported bus services, Threshold income for student loan repayments, Making Tax Digital

Last week we looked at the exemption for employer-supported bus service and the findings in a recent tribunal case. We also considered what constitutes total income for the purposes of triggering student loan repayments. Finally, in a week in which HMRC published six consultation documents on different aspects of their Making Tax Digital strategy we provided a warning that it is never too early to start preparing clients for the far-reaching changes ahead.

This is an
extract from our topical tax tips newsletter dated 18 August
2016 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>

Employer-supported bus services 
The First-Tier Tax Tribunal recently considered whether the purchase of a bus pass for an employee constituted financial support for a public transport road service within the context of the exemption for employer supported bus services in ITEPA 2003, s. 243. The Tribunal also examined whether a zonal bus pass fell within the terms of the exemption. 

Provided that certain conditions are met, no liability to income tax arises in respect of the provision of financial support for a public transport road service. 

The main issue was whether the purchase of a bus pass constituted financial support for a public bus service or whether more was needed. The appellant argued that buying the bus pass supported the service as the cost of the pass included an element of profit. HMRC contended that the financial support had to be substantial and that the employer must take some responsibility, financial or otherwise, for running the service. Having considered the issues, the tribunal found that simply purchasing a bus pass was not financial support and that something more was required. However, they did not consider what that `something more’ may be. 

When advising clients seeking to make use of this exemption, reference can be made to the guidance published by HMRC in April 2013 which confirmed that bulk buying of tickets did not count as financial support. However, support in the form of the provision of a bus shelter, putting in extra stops, running a service later at night, investing in bus lanes and suchlike would qualify. 

The Tribunal also confirmed that as ticketing in the UK is now on a zonal basis, zonal bus passes can qualify for the exemption. 

This is an
extract from our topical tax tips newsletter dated 18 August
2016 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>
 
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