Letter: 'Rail fares should be tax deductible'

[Railwaymanuk]

I came across this suggestion on commute to work and I thought I would share it with you all..

Letter: Rail fares should be tax deductible

Railway passengers in this country have been penalised for far too long.

They have been imposed upon with inflation-busting increases in commuter costs.

These record increases in commuting costs have destabilised the economy because it subtracts disposable income from Family Budgets.

The railway commuter is a voter too, David Cameron, and they have not been listened to, in my view.

I believe if government cannot be bothered to control the costs imposed upon railway commuters and railway passengers in general then they the government should implement this radical idea that has much public support — railway fares should be made tax deductible.

Oliver Healey

It does ponder the logic of the government saying use public transport but refuses to sanction any financial inducements.

I wonder what people thought about the idea...

 

[Mojo]

The "costs imposed upon railway commuters and railway passengers in general" are almost entirely a result of government decisions and actions rather than them not being bothered.

 

[radamfi]

Other countries do allow public transport costs to be offset against tax.

Ireland: www.taxsaver.ie

In Belgium, the employer pays 80% of the train fare to work, with the state paying the rest.

http://www.belgianrail.be/en/business/commuter.aspx

 

[Bertie the bus]

It does ponder the logic of the government saying use public transport but refuses to sanction any financial inducements.

That rather depends on where you live and work and whether your place of work has a free car park. If you live within the M25 and work in central London, which a significant percentage of rail commuters do, then rail travel is significantly cheaper than having to pay the congestion charge and £20+ per day parking.

 

[matt_world2004]

How about the government returns the income tax paid on the income use to buy train tickets to subsidise public transport, that way they cannot be accused of using drivers revenues to subsidise the railway

 

[deltic]

Such tax incentives always benefit the richest most unless you cap the benefit. Someone who pays £10k a year on a first class season ticket and earns £150k will get £4500 tax back. While someone who pays £500 a year on minimum wage would only get £100 back.

 

[edwin_m]

People who pay for parking near their place at work can do so via salary sacrifice from pre-tax pay. This is not in general possible in the UK for people who use public transport to get to work. In my view this unfairly subsidises car travel and a level playing field should be created one way or the other.

 

[Senex]

Commuters, who generally want to travel at the times when the railway system is nearest to capacity and who require rolling stock and signalling facilities often not needed for the rest of the day, already enjoy a substantial discount on fares. Why should they get more/

And even if one might sympathise with low-paid commuters travelling relatively short distances because they genuinely cannot afford to live closer to their work, why should anyone sympathise with people choosing to commute 100 miles or more on InterCity services who are deliberately trading a nicer environment, better housing, and quite possibly better schools for their children against the cost of the season ticket?

 

[Oswyntail]

"These record increases in commuting costs have destabilised the economy because it subtracts disposable income from Family Budgets. ".

Where you live is a choice; where you work is a choice. The two choices influence each other, but there are always alternatives. The sentence I have quoted applies equally to any other choice made - what to have for dinner, what car to own, if any, where to go on holiday, if at all. Basically the chap is saying he would like more money, and wants the government to give it him via the railways.
I note the letter is in a Derbyshire paper. If he is commuting within Derbyshire I doubt he pays that much; if he is commuting to London, he has made his own bed and should lie in it.

 

[NY Yankee]

I came across this suggestion on commute to work and I thought I would share it with you all..

Letter: Rail fares should be tax deductible

It does ponder the logic of the government saying use public transport but refuses to sanction any financial inducements.

I wonder what people thought about the idea...

London utilises congestion pricing. It's used to discourage cars from entering the central business district. It also provides an incentive for commuters to use the TFL services. It's only fair that the commuters receive a benefit for using mass transit since they are essentially forced to do so.

 

[steamybrian]

Where you live is a choice; where you work is a choice. .

Where you live is dependant of what you can afford. Living in London is so expensive that more and more people are commuting longer distances to still work in London.

During my working career my place of work moved several times but luckily all within one hour commute of home. A few years some of my former railway colleagues were told their place of work was moving from London to Milton Keynes and they had to move to within easy commute of Milton Keynes.

 

[Xenophon PCDGS]

Other countries do allow public transport costs to be offset against tax.

Ireland: www.taxsaver.ie

In Belgium, the employer pays 80% of the train fare to work, with the state paying the rest.

http://www.belgianrail.be/en/business/commuter.aspx

What is the average daily commuter number in both Belgium and Britain. I am interested in what the financial figure incurred to British employers and how they would bear these newly-imposed costs. Could this affect the actual numbers who are employed in order to cut any financial overheads implication that would follow from the stated proposal.

I do speak as one who was at the highest level of senior management for over thirty years prior to my retirement in 2010 and I do assure those on this thread that overheads always form part of internal accounting procedures.

 

[Oswyntail]

Where you live is dependant of what you can afford. Living in London is so expensive that more and more people are commuting longer distances to still work in London. ....

And if you cannot afford the fares, that is part of affording where you live. It's harsh, I admit, but it no solution further to subsidise commuting. London is a problem, and the government are beginning to address it.

 

[DynamicSpirit]

London utilises congestion pricing. It's used to discourage cars from entering the central business district. It also provides an incentive for commuters to use the TFL services. It's only fair that the commuters receive a benefit for using mass transit since they are essentially forced to do so.

Should I receive tax benefits for eating food, drinking and water, since I'm essentially forced (by human physiology) to do so. How about my mobile phone and my Internet connection? It would be difficult to function in the modern UK without them, so in effect I'm forced to have them. Should I get tax breaks for having them? Or how about my gas and electricity... I don't see that travel to work is any different in principle from any of these.

If you pursue this logic, then the Government would end up getting almost no tax revenue from individual households, which would throw public finances into chaos.

 

[edwin_m]

Many countries consider travel to work to be part of the cost of working, and therefore tax deductable in the same sort of way as companies can reclaim VAT and self-employed people can claim taxes on many of their work-related expenses. So there is an argument for doing this, but I agree there are also good reasons not to do so given the pressure on commuter rail and the disproportionate benefit to higher earners. What sticks in my craw is the unfair favouring of parking charges over public transport fares.

 

[Peter Mugridge]

I thought the fact that season tickets are already heavily discounted on a day to day basis is already considered as an "advantage to encourage use"?

 

[Railwaymanuk]

It was posted in the Liverpool Echo that the named correspondent Oliver Healey had written.

"

IN REFERENCE to the subsidisation of railway passenger fares by the taxpayer, I would like to advocate that the PS50bn High Speed Rail 2 project is cancelled.

This should happen on the pretext that there was no real democratic consultation with the citizens of this country who have seen services cut and taxes increased.

The economic benefit from HS2 is next to nothing in the grand scheme of things.

The proposed PS50bn+ sum could be better invested in four key projects that I know will have the unanimous support of two economic groups who have been marginalised for far too long in the United Kingdom - rail passengers and motorists.

The PS50bn saved from cancelling HS2 should be apportioned in equal sums and I would do so along the following lines: PS15bn invested in reducing rail |fares; PS10bn invested in existing |infrastructure; PS15bn invested in cutting fuel |duty for motorists; PS10bn invested in ending |overcrowding on trains through the purchasing of more trains. Oliver Healey

http://www.thefreelibrary.com/Cancel+HS2+and+cut+fares+for+rail+travellers;+Talkback.-a0440615016

PS equals Pound Sterling the source published it that way...
--- old post above --- --- new post below ---
In researching this article I have found it published in Blackpool, Northumberland, Wetherby, Gainsborough, Worksop, Buxton, Mansfield, Matlock, Derby, Lancashire Evening Post, Yorkshire Evening Post, Lytham St Anne's. Burnley, Eastbourne, Halifax, Harrogate, Wigan and Sheffield.

 

[Bertie the bus]

You could post a list of publications as long as your arm but it wouldn't mean he isn't a ranting buffoon who just thinks other people should pay for his travel arrangements.

 

[infobleep]

Perhaps if people don't want a tax rebate on rail journeys should campaign for such a benefit to be removed from car drivers and parking. Why not have a level playing field.

 

[Bletchleyite]

VAT is due on car fuel, but not on rail fares (unlike say Germany). Isn't that a fair subsidy?

 

[infobleep]

VAT is due on car fuel, but not on rail fares (unlike say Germany). Isn't that a fair subsidy?

If VAT isn't payable on rail tickets then what is the issue here?

 

[Railwaymanuk]

It would appear that Oliver Healey has written on reducing the cost of road fuel for motorists and for reducing taxation overall..

People may disagree with what he says but he does bring some new interesting ideas to the discussion table..

 

[Bertie the bus]

He doesn’t raise any interesting points. None of his points are new and it is basically an ill thought out rant. I’m not going to dissect his whole argument because it simply isn’t worth the time and effort but I’ll make two points.

New railway carriages cost approximately £3 million each so £10 billion will buy nearly 3,500. Anybody who thinks you can introduce 3,500 new carriages to the network without carrying out hugely expensive platform lengthenings, building new depots and other infrastructure works hasn’t done much research.

The Government doesn’t have £50 billion sitting in the building society for HS2. It intends to borrow and attract foreign investment. Lenders and investors expect a return. How are they going to get one by the money being spent subsidising rail fares and reducing fuel duty?

 

[Bletchleyite]

If VAT isn't payable on rail tickets then what is the issue here?

I'm not convinced there is one.

 

[Mojo]

If VAT isn't payable on rail tickets then what is the issue here?

The OP seems to be suggesting that commuters be given tax relief on the tickets they use to travel to their permanent place of work.

 

[bb21]

Yes, tax relief and VAT refund are two very different matters, since the latter is irrelevant to rail fares.

If anyone wants to discuss value for money (or not) on HS2, can you do so in several of the threads dedicated to HS2 please.

 

[infobleep]

Yes, tax relief and VAT refund are two very different matters, since the latter is irrelevant to rail fares.

If anyone wants to discuss value for money (or not) on HS2, can you do so in several of the threads dedicated to HS2 please.

OK. I understand now. So basically off set your work tax with rail fares.

This happens with contractors providing they are working in a place for less than 2 years.

 

[EM2]

I find this a strange idea. I have a rail season ticket to get to and from work. Sometimes, especially at weekends, there aren't trains to get me to work in time for my shift, so I have to drive or get a bus, and pay for the petrol or the fare. It's just one of those things I have to put up with. If it gets to the point that the cost of getting to work means it's not worth me going to work, then I'll move or find another job.

 

[bb21]

OK. I understand now. So basically off set your work tax with rail fares.

This happens with contractors providing they are working in a place for less than 2 years.

Sort of, yes.

For example, if you pay income tax at 20%, and have to buy a season ticket worth, for example, £3000 a year, then you save up to a £600 tax bill each year. Because rail tickets are zero-rated, making it tax-deductable is an efficient tax-saving measure, whereas getting a VAT rebate saves you nothing. Even better if you pay income tax at 40%, saving you up to £1200 a year.

(All rough calculations to illustrate the point.)

 

[Senex]

Sort of, yes.

For example, if you pay income tax at 20%, and have to buy a season ticket worth, for example, £3000 a year, then you save up to a £600 tax bill each year. Because rail tickets are zero-rated, making it tax-deductable is an efficient tax-saving measure, whereas getting a VAT rebate saves you nothing. Even better if you pay income tax at 40%, saving you up to £1200 a year.

(All rough calculations to illustrate the point.)

So the suggestion is not merely a further subsidy to commuters but a higher subsidy to higher-paid commuters -- and presumably an even higher subsidy (in view of the 45% tax rate) to the even-higher-paid London banking brigade.