Ticket to save

How to make bus and train travel less taxing

March 5, 2023

As rail fares go up again this week, we propose something that would both ease the pain and address four of the government’s wider priorities: tackling the cost of living; getting people back into the labour market; getting existing workers back into the office; and meeting the UK’s net-zero pledge.

Commuters by bike or low-emission car can already save hundreds or thousands of pounds a year by buying their vehicles out of pre-tax income, in effect setting the cost against tax. But commuters by bus and train cannot do this, though they are on average less affluent, and there are more of them. Public transport season tickets are the only low-carbon form of commuting with no tax relief.

We should end this anomaly. We recommend that tax relief at the basic rate be extended to season tickets and passes, saving bus and rail travellers hundreds of pounds a year.

Authors

Andrew Gilligan

Senior Fellow and Head of Transport, Infrastructure and Liveable London

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