Cyclists and bus users set to have same tax breaks as drivers

Bus passes and bicycles provided by employers are set to be removed from the benefit in kind system and no longer charged income tax, which would bring them into line with motor vehicles and free or subsidised car parking provided by employers.

A majority of the members of Policy & Resources – Deputies Mark Helyar, David Mahoney and Bob Murray – were among only four members who opposed the first successful amendment against its Budget.

The amended proposal will face a final vote at the end of the Budget debate later this week.

• Listen to our Shorthand States round-up of day two of the Budget debate, with Simon De La Rue and Matt Fallaize.

Proposing the amendment, Environment & Infrastructure president Lindsay de Sausmarez told the States she wanted to ‘smooth out an anomalous wrinkle in income tax policy’ which could discourage transport choices other than private motor cars.

‘By putting public transport and non-motorised transport on an equal footing with private motor vehicles and parking, in terms of our benefit in kind regulations, we will send a positive signal to incentivise measures that are in line with multiple States policies and objectives,’ she said.

She said that a range of business and third sector groups had come out in support of her amendment as a way of encouraging businesses to offer and promote alternatives to private motor cars, without taking away anything currently enjoyed by motorists.

She estimated that the financial effect of her amendment would be negligible, because so few employers were currently providing workers with subsidised bicycles or bus passes.

Deputy Sasha Kazantseva-Miller said that Jersey already offered the tax arrangements proposed by Deputy de Sausmarez. Deputy John Gollop, president of pedestrian safety charity Living Streets, felt the change would bring about greater equity and ‘psychologically nudge’ at least a few businesses towards healthier forms of transport.

But Deputy Mahoney said the Budget was concerned with trying to raise rather than give up revenue, and, therefore, he would have been more sympathetic to a proposal to remove the tax benefits currently enjoyed by motorists.

Deputy Simon Vermeulen predicted that approving the amendment would cause a lot of administrative work for very little benefit to the public, which Deputy de Sausmarez rejected.

‘This amendment leads to less bureaucracy. By exempting it as a benefit in kind means that you don’t have to note for income tax purposes the value of the bicycle or the bus pass,’ she said.

The amendment was carried by 27 votes to four with one member abstaining.

However, a round of technical problems with the States’ electronic voting system meant that eight members – one-fifth of the Assembly – did not vote, including P&R president Peter Ferbrache.