Finance Act 2002

33 Employer-subsidised public transport bus services

(1) In Part 5 of the Taxes Act 1988 (provisions relating to the Schedule E charge), section 197AB (exclusion of tax charge in respect of support by employer for certain transport services) is amended as follows.

(2) In subsection (2) (main definitions), in the definition of “qualifying journey” after “means” insert “the whole or part of”.

(3) For subsection (3) (conditions of exemption) substitute—

“(3) Except in the case of a local bus service, the exemption conferred by this section is subject to the condition that the terms on which the service is available to the employees mentioned in subsection (1) must not be more favourable than those available to other passengers.

(3A) The exemption conferred by this section is in every case subject to the condition that the service must be available generally to employees of the employer (or each employer) concerned.”.

(4) In subsection (4) (minor definitions), at the appropriate place insert—

““local bus service” means a local service as defined by section 2 of the Transport Act 1985;”.

(5) After that subsection insert—

“(5) If under this section there is no charge to tax under section 154 (or there would be no charge if the employee were in employment to which Chapter 2 of Part 5 applied), there is no charge to tax under section 141 (non-cash vouchers) in respect of a voucher evidencing the employee’s entitlement to use the service.”.

(6) This section has effect for the year 2002-03 and subsequent years of assessment.