Tax Relief scheme for Public Transport

Cork

Is anyone availing of the Tax Relief scheme for Public Transport?

i.e getting employer to purchase bus/rail tickets?

It looks very inflexable.

What if you change jobs or take a holiday?

It seems a good idea but seems very inflexable.

markpb

I'd love to get it but my company aren't interested (yet). Aparently the cost of paying for annual tickets up front and doing the paperwork offsets any advantage from the PRSI discount. Pity.

positron

I buy annual point-to-point train tickets with my employer, and have at least a dozens colleagues who does the same. Didn't know its that difficult or expensive to the employer?

markpb

Most companies will buy an annual ticket for you and let you pay them back each month. It's not expensive, just ties up cash for a long time. Not sure about the paperwork aspect of it but I still don't see why it has to go through your company, the revenue should just let you buy it and claim back credits for it the same as most other things.

ixoy

I'm doing it with my company as are a number of others. I'm not going with point-to-point but with the Outer Suburban ticket. Works out good savings for myself.

My other half however can't avail of it because his company don't do the scheme. I'm completely in agreement with you markpb - I can't see why you can't buy it yourself and claim back tax credits. It's very unfair on those in smaller companies who don't want to go through the paperwork.

AlekSmart

It`s such a simple concept and one which could make a REAL difference to commuting choices.......and yet.....It`s like pulling teeth.

If even 0.5% of the Transport 21 budget were to be directed towards financing the extension of the TaxSaver scheme into ALL employments it would be well spent.

It should in fact be a REQUIREMENT under the Tax code for ALL companies to fully participate and for this participation to be recognised and rewarded as required through the existing PAYE/PRSI deduction channels.

This is the sort of scheme which can be implimented at the flick of a Ministerial pen,yet it lies fallow,lost in a midst of ignorance and indifgference which typfies Irish Public Administration.

FFS this sort of thing can even be sold as a procedure to allow us to make a small step towards reducing our massive dependence on private motoring and its resultant impact under the Kyoto protocols and inded commonsense itself.

However,as ever in modern Ireland nobody`s in charge or rather everybody`s in charge of everything which ensures nothing gets done in any sort of cohesive manner. :eek:

MarkoP11

This is one of the big complaints, when you consider the backbone of the Irish economy is the small to medium enterprise, you can't blame them if the cost is a issue.

The issue of holidays is irrelevant when the potential saving over a year compared to 12 monthly tickets is of the order of 30-40% depending on your income.

It is a very serious issue out in commuter land, lot of angry people, don't forget the self employed either. This is purely a political issue since it all depends on legislation to change the rules. The transport companies can do nothing bar complying with the current legal situation.

We tried to raise it during the election http://www.platform11.org/resources/p11_election_demands.pdf
and got nowhere, other issues on the list are now in the program for government so it is curious how such a simple change with little or no cost was overlooked

John R

The tax relief scheme should be scrapped altogether and the discount applied directly to the sale price of monthly and annual tickets.

Practically all monthly and annual tickets are bought by PAYE workers anyway except for students who already buy discounted tickets.

The only "benefit" of the current system to the government is that the overly complex procedure stops a high % of people from taking it.

Failing that it should be available for taxpayers to apply for it themselves, purchase a standard-rate ticket and you get an envelope containing the relevant form that you fill out and get stamped/signed by your employer.

ixoy

The thing was that I had assumed it was easy for companies to implement and provide but then the last two corporations I worked for, where I got this ticket, have employee numbers in the hundreds.

Was there any rationale given for the current system and not revitalising it?

gjim

The tax relief scheme should be scrapped altogether and the discount applied directly to the sale price of monthly and annual tickets.

Exactly. I don't understand how anyone could think that this was a good idea.

It's simply one of the dumbest ways possible to subsidise or promote public transport. A scheme whereby the government effectively gives money to the revenue to pass back to companies to pass back to their employees to give to IE or DB. Just give the money directly to IE and CIE when they sell a qualifying ticket!

As it stands, there's not only the financial cost to the government of the subsidy but everyone from the revenue, the companies, the individual and IE and CIE have to waste time on paperwork and needless bureacracy. I wouldn't be surprised if the monetised cost of everyone's time was greater than value of the subsidy.

Capt'n Midnight

Wouldn't be so much simplier if it was like the bin tags and you tore off the section off the monthly or yearly ticket and got the tax back from it.

dowlingm

You guys are lucky - you get the tax back upfront even if the system is chronic. Over here, you buy the pass and claim the tax refund (15.5pc) at the end of the year - and we've only had that since last year.

D'Peoples Voice

dowlingm wrote:

You guys are lucky - you get the tax back upfront even if the system is chronic. Over here, you buy the pass and claim the tax refund (15.5pc) at the end of the year - and we've only had that since last year.

The point is that this scheme is not difficult for any finance department in a company to administer. It's can work the same way as any pension/health insurance contributions that are paid out of salary deduction for the finance department.
By the way the reason why the Charlie MCGreevy set it up this way was to reduce the work for the Revenue Commissioners so they could dedicate staff to other more important areas.
So Charlie made mortgage interest relief, pension premiums, insurance premiums, union premiums, public transport tickets, the list goes on, all deductible at source. It saves thousands of man hours for the Revenue Commissioners, just think of all the time you would spend refunding people their tax credits on public transport tickets at the end of the year if they were to submit claims.
CIE can't simply reduce the ticket price because people get tax relief at their MARGINAL rate.

AlekSmart

Quote [D` People`s etc]

"The point is that this scheme is not difficult for any finance department in a company to administer. It's can work the same way as any pension/health insurance contributions that are paid out of salary deduction for the finance department." [End]

Spoken like a true person,People.

Whilst many may not appreciate it,the Republic`s Revenue systems are well up and in many cases well ahead of other European systems.
Anybody entwined in the French "Impot" and general administrative systems would be struck dumb by the very slick operational nature of MOST of the Irish Revenue Commissioners areas of interest.
Many EU "Majors" are still heavily reliant upon paperwork and lots of it in order to function and long queues are the order of the day in public offices.

Its quite a contradiction and no little disgrace that our Revenue On-Line service is such a very user friendly and comprehensive aid to the ordinary Taxpayer,yet Broadband Internet availibility is disgracefully poor outside of Dublin.

Once again we display a worrying National trait of failing to specify enough Tar to make a perfectly good ship seaworthy ???

gjim

The point is that this scheme is not difficult for any finance department in a company to administer.

That's not the point. There is some logic to using tax breaks/extra credits/etc. when the service being subsidised is being provided by a non-public company (e.g. mortgage interest relief, union dues, etc). Not least that the trail of paperwork prevents fraud. When the ultimate beneficiary of the subsidy is a state owned company then it simply makes NO SENSE to use the revenue system to provide this subsidy when you can do it directly, saving paperwork and processing for employers and revenue.

Not only does this scheme create completely needless bureaucracy, it discriminates against those on lower incomes. Those earning over 34K a year get over twice the level subsidy that those on the lower tax rate get.

markpb

D'Peoples Voice wrote:

The point is that this scheme is not difficult for any finance department in a company to administer. It's can work the same way as any pension/health insurance contributions that are paid out of salary deduction for the finance department.

It obviously is because I know a lot of people who work for companies who aren't willing to participate in the system. This is twice as bad when you considering there is a tax saving for the employer if they participate.

CIE can't simply reduce the ticket price because people get tax relief at their MARGINAL rate.

You mean the way banks charge people Dirt at 20% and Revenue expect them to sort out the difference if they're paying 40%?

dam099

D'Peoples Voice wrote:

So Charlie made mortgage interest relief, pension premiums, insurance premiums, union premiums, public transport tickets, the list goes on, all deductible at source]

.

Your'e jumbling reliefs there many you have listed are not deductible at source at all.

TRS Tax Relief at Source operates on Mortgage Interest and Medical Insurance and means you get 20% (standard tax rate not marginal) of the gross amount payable deducted at source by your bank/medical insurer meaning you only pay over 80% to them rather than it going through either your payroll or having to do a tax reclaim at year end.

Pensions and public transport tickets are deducted from Gross Salary when calculating taxable pay and you therefore get relief at your marginal rate.

Union dues get a tax credit at 20% which is deducted from your tax payable so you are not getting them at your marginal rate at all either.

CIE can't simply reduce the ticket price because people get tax relief at their MARGINAL rate

Which kind of goes agains't the idea when the whole tax credit system was introduced for many other reliefs being at 20% (revamping the previous allowance system which meant they were at the marginal rate). Giving relief at the marginal rate is to a degree regressive as it benefits the better paid more than those who don't pay higher rates of tax.

One justification to do it that way could be that higher earners may be more likely to commute by car and using marginal reliefs targets the relief more at them leaving standard rate payers who might be using public transport anyway with less relief and non taxpayers with none at all.

MarkoP11

1. As it stands the operator gets the full face value of the ticket and yes Veoila transport is part of the scheme, so its not a semi state only scheme

Bar providing an office to sell the tickets the transport operators have nothing else to do and get the cash up front.

The standard annual ticket is the same as 10 monthly tickets so its a 16.7% discount, ahead of the discount in a monthly ticket.

2. If the scheme was administered such that the tax refund was reflected in the price of the tickets, then you have a very dodgy looking subsidy by the back door which the EU won't look at nicely and clearly not workable with the private sector.

The entire point of the scheme is to encourage joe public tax payer to use public transport and in doing so to allow them to offset the cost against their own tax, after all the system is pay as you earn, everyone is different

The problem with the system is the lack of a legal requirement to offer access to the scheme, employers have to offer a pension/PRSA scheme in most situations, no reason such a obligation can't be extended to commuter tickets. A tax payer should have the option to do it themselves and claim the tax relief.

Who calls the shots - Minister for Finance

Victor

markpb wrote:

You mean the way banks charge people Dirt at 20% and Revenue expect them to sort out the difference if they're paying 40%?

Off topic, but your maximum liability from bank interest is the 20% DIRT, it was changed some time back.

KC61

markpb wrote:

It obviously is because I know a lot of people who work for companies who aren't willing to participate in the system. This is twice as bad when you considering there is a tax saving for the employer if they participate.

Well as someone who does administer it in my company, I have to say it's not difficult at all!!!

It takes a minimum of time and effort, and is, as someone else pointed out, no different to managing any other scheme such as VHI etc. Also, most of it mainly done online now. It sounds as if such companies are just putting up barriers for the sake of it!

gjim

2. If the scheme was administered such that the tax refund was reflected in the price of the tickets, then you have a very dodgy looking subsidy by the back door which the EU won't look at nicely and clearly not workable with the private sector.

This is a red herring. The opposite is the case; the EU seems to look far less favourably on the practice of hiding subsidies in tax breaks and the like instead of accounting for the subsidies directly.

The entire point of the scheme is to encourage joe public tax payer to use public transport and in doing so to allow them to offset the cost against their own tax, after all the system is pay as you earn, everyone is different

Joe public doesn't give a sh*te about the mechanics behind the transfer of the subsidy; all they care about is getting cheaper tickets and in fact the simpler the system and the less hassle the more attractive the scheme is.

The problem with the system is the lack of a legal requirement to offer access to the scheme, employers have to offer a pension/PRSA scheme in most situations, no reason such a obligation can't be extended to commuter tickets. A tax payer should have the option to do it themselves and claim the tax relief.

The cost of creating the legal framework and providing enforcement never mind the internalized cost imposed on every company in Ireland would dwarf the value of the subsidy. Money which would be far better spent on public transport. And you have to be kidding, if you think you'd be doing people a favour by having them fill out a Form 12 (14 pages) every year to avail of subsidised public transport tickets.

A simple system would give joe public the discount directly when they purchase qualifying tickets and have the public transport companies present Finance with a list of the tickets sold along with names and RSI numbers to be reimbursed accordingly.

D'Peoples Voice

dam099 wrote:

.Your'e jumbling reliefs there many you have listed are not deductible at source at all.

No you're right, I was merely trying to simplify things by lumping them together, I suppose I should have said tax relief applications are outsourced by the revenue commissioners to the various pension companies, banks, medical insurance companies, finance departments of the companies facilitating various salary deduction schemes etc, and it is they who do all the paperwork for the Revenue Commissioners. That was the point I was making! Charlie Mcgreevy was indeed a smart man, well public sector pay was out of control to be fair:)