Tax-free bus travel through new greentravel2work scheme

SALARY-SACRIFICE SCHEMES

Tax-free bus travel through new greentravel2work scheme

Commuters can save up to 41% on the cost of an annual bus pass through greentravel2work, a new initiative by the employee benefits division of p&mm.

This new product, developed by p&mm in support of the government's green travel plan, is designed to encourage commuters to use local bus services to and from the workplace in place of less sustainable forms of transport such as cars.

Adding to its cycle2work scheme, p&mm believes it is the first benefits provider to launch and offer such an outsourced product to enable employers to offer bus travel incentives to staff.

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How the scheme works

• Employees are given the option to choose an annual bus pass and pay for it monthly through their employer by deduction from their pay - a salary sacrifice. 
• The employee saves because the salary-sacrifice payment is exempt from income tax and national insurance (NI) contributions up to 41%, while the employer does not pay NI on the salary sacrificed up to 12.8%.
• A typical employee who is a higher rate taxpayer will save £184.50 on a £450 a year annual bus pass, while the employer will save £57.60 on NI at 12.8%.
• p&mm arranges and runs the whole scheme for the employer including negotiating with the local bus company and the Inland Revenue before helping to launch the scheme to staff. 

“Many local authorities, major public and private sector employers have already confirmed interest and are working with p&mm to develop schemes for their staff,” says p&mm.

The scheme, which is aimed at organisations with more than 5,000 employees, will be rolled out by p&mm over the next year.

Nottingham City Council jumps on board

Nottingham City Council is pioneering the launch of the scheme for its 12,800 employees. The council is one of three major organisations, with a total of more than 30,000 staff, to launch schemes within the next month. 

Michael Frater, chief executive of Nottingham City Council, said:

"I am delighted that our successful partnership working with p&mm has delivered greentravel2work. This new addition to our award winning Works Perks portfolio of benefits will encourage more employees to choose bus travel and further increase the proportion of people who travel to work by public transport in Nottingham. Sustainable travel and reducing our carbon footprint is high on our agenda at Nottingham City Council. We hope other private and public sector organisations will follow our lead."

A final word

"Many thousands of commuters will potentially be able to save enormous sums on the cost of travelling to work and contribute positively to the environment through this initiative. It will be a highly attractive benefit to both staff and employers who will find that it not only reduces their NI costs but helps with recruitment and retention. By supporting and encouraging more employees to change to public transport, the employer will also be able to demonstrate the organisation's corporate social responsibility commitment.

Everyone wins - the environment, the employee, the employer, and the bus operators. This is a major new initiative for which there is already enormous demand." - David Lebond, executive director responsible for the p&mm employee benefits division.

Want to know more?

p&mm, part of Motivcom plc, describes itself as “the UK's premier B2B marketing services agency specialising in performance improvement for both public and private sector organisations”.

For more details visit www.pmmemployeebenefits.co.uk

To find out more about greentravel2Work go to www.pmmemployeebenefits.co.uk/green.html