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EXPLANATORY NOTE CLAUSE 46: PROVISION OF MOTOR CYCLE OR CYCLE PARKING FACILITIES SUMMARY 1. This clause exempts employees from tax on the benefit of employer-provided parking facilities for cycles (and motor cycles) at or near the workplace. 2. At present the cost which an employer meets to provide workplace parking facilities for employees who cycle to work is (strictly speaking) a taxable employee benefit (though probably not one which has been taxed in practice). As part of the package of measures to encourage green commuting by employees, this benefit is now being explicitly exempted. Motor cycle parking facilities are also being exempted. _________________________________ DETAILS OF THE CLAUSE 3. Subsection (1) provides that the existing exemption for the benefit of employer-provided car parking space is to be extended to cycles and motor cycles. 4. Subsection (2) ensures that this exemption shall be carried through to other provisions taxing benefits where the parking benefit is provided by way of a non-cash voucher or credit token or where the employer reimburses the employee for parking expenses. 5. Subsection (3) defines ‘motor cycle` and `cycle’. 6. Subsection (4) brings the exemption into effect from 6 April 1999. ________________________ BACKGROUND 7. Existing tax law exempts the benefit of an employer-provided car parking space at or near the workplace (because of the considerable administrative complexity involved in valuing the availability and use by employees of a car parking space). This clause ensures that cycle and motor cycle parking spaces will also be exempt. We doubt whether this benefit has in fact been taxed in the past; but the exemption will now provide employers and employees with the reassurance of knowing for certain that there is no tax charge where workplace parking is made available for employees cycling to work. |
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