Transport and Travel Benefits
For all parties involved, it is important that any benefits offered are useful and of interest to the end-user – that is, the employee. As such, the benefits most frequently offered by companies are those for which all employees will have a use; this partly explains the widespread nature of company pension schemes. While most individuals wish to save for their retirement, every employee requires transport to and from their place of work. As such, transport and travel are areas that should be explored by companies wishing to offer an attractive benefits package.
Depending on the nature of their work, employees frequently receive use of a company car as part of their benefits package. In many cases they will receive use of the company fleet for work purposes as a non-salary benefit, but employers frequently offer to extend this use to non-work purposes in exchange for the sacrificing of a portion of the employee's salary. There are a number of reasons why this makes sense from both parties' points of view; the employer, who will be paying for the fleet anyway, can offset some of the cost against lower salary payments, while the employee gains the tax efficient use of a car, with no initial outlay. For these reasons, a company car is one of the most popular benefits in the transport and travel field.
Increasingly, however, employers are looking to move away from the company car tradition. This is partly due to the rising costs of running a fleet, and partly due to the increasingly unsympathetic tax treatment of these practices. The government have tightened the tax schedule with regard to company cars, in great part in an effort to encourage 'greener' transport practices. While this can be problematic for some employers and employees, there is no reason why you should not take advantage of the comparatively advantageous tax treatment of other transport related benefits. There are a number of ways in which your company can provide tax free benefits that enable your employees to travel to and from work more cheaply. For example, the government has recently introduced a scheme whereby they will make a contribution of as much as 50% of the cost of a bicycle for an employee. Both employer and employee then receive 100% tax relief on the benefit. Similarly, many benefits providers are now offering benefits that encourage employees to use public transport to get to and from work. Again, the use of local public transport (particularly buses) is treated highly favourably by the tax man, and some benefits providers can offer to arrange employee discounts with the major transport providers in your area. Clearly it is up to the employer to decide whether these benefits will be offered in addition to salary or on a salary sacrifice basis, but either way both employer and employee should make a saving if these schemes are properly implemented.
Transport and travel is a growing area for employee benefits. As public consciousness about the environment has risen, and as the government has begun to seek greener alternatives to car use, this has become a field in which employers can offer cost effective, appealing benefits, while employees can make a saving on their transport costs.