The new congestion charges in Central London have now commenced, and the Inland Revenue has issued brief guidance to those affected on the treatment of congestion charges for tax purposes.
Essentially, employees will be able to claim tax relief on the congestion charges paid only if the journey itself is tax deductible, that is it is a journey made while carrying out their duties or to a temporary workplace, but does not involve ordinary commuting. Congestion charges borne on the journey to an employee's permanent workplace will not be tax deductible, and if reimbursed by the employer will produce a tax charge on the employee.
Generally speaking, businesses including companies will be able to obtain a tax deduction for congestion charges they bear in the course of business.
The briefing sheet issued sets out the tax treatment of congestion charges on the following types of person separately:
- The self employed
- Employees and office holders, and
- Employers.
|
The guidance indicates that the payment of congestion charges for business journeys would be suitable for inclusion in a dispensation, and employers are encouraged to contact their PAYE office.
The note also indicates that once the charge is up and running the Revenue will review the impact and issue further guidance if necessary.
Access the briefing via the Inland Revenue website at
http://www.hmrc.gov.uk/cars/concharging_tax.pdf
