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The Government has been urged to introduce tax breaks on season tickets for public transport – a move that is more likely to help drag the UK out of recession than the recent reduction in VAT, PKF has claimed.
Such a change in legislation would encourage jobseekers to look further afield during the economic downturn, said the accountancy firm.
Tax partner John Cassidy remarked that ‘giving tax relief to commuters will mean that they can look for jobs in new locations, and even consider lower-paid work’.
He added that the mooted break would ‘potentially be more effective at boosting the economy than the controversial VAT rate cut has been’ – and instigating it ‘would be relatively straightforward’.
The tax relief would be given at source on all monthly and annual season tickets for rail, bus and other forms of public transport.
‘We can be sure that transport companies would be happy to run such a scheme,’ said Mr Cassidy.
‘It may also tempt some commuters out of their cars and so have a beneficial effect on the UK’s CO2 emissions.’
John added: ‘Clearly, I am not expecting the Government to write a blank cheque, like it has effectively done for the banking industry. Any relief would probably have to be limited.
‘For example, a relief on annual travel costs of up to, say, £5,000, to match the current benefit exemption for season ticket loans provided by employers, would work well.’
