No liability to income tax arises where an employee provides workplace parking for an employee. This covers parking at or near the employee’s place of work and is allowable for tax purposes whether the cost is met directly by the employer or reimbursed to the employee.
The treatment of costs incurred as a result of the congestion charge is dependent on whether it was incurred whilst on business travel, in which case the payment is tax and National Insurance free, or whether they were incurred during the employee’s ordinary travel from home to work. If so, the payment is subject to Tax and National Insurance through the payroll.
By Jo Nockels
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