Go North East Salary Sacrifice Ticketing Scheme

Get big discounts on bus travel for your employees while making savings to your business with a salary sacrifice arrangement from Go North East.

As the table below illustrates, the big attraction of salary sacrifice is the significant savings available to your employees on their bus travel. Savings available on both income tax and National Insurance contributions provides a 33% discount for a 22% taxpayer or 41% for a higher rate taxpayer.

The Go North East salary sacrifice scheme is straight forward and there is no significant financial outlay required from the employer. The employer saves up to 12.8% on the National Insurance contributions associated with the ticketing costs.

Ticket prices are guaranteed for 12 months and the annual ticket price is spread out over the year with 12, monthly salary deductions. Tickets are issued every 28 days. If an employee leaves the scheme, the full monthly charge will be deducted for the month in which they leave. They will still be able to use their 28 day ticket until its expiry and the future supply of tickets will simply be discontinued.

Ticket Prices	1 zone	2 zone	3 zone +
Normal annual ticket price	£439	£605	£769
Annual ticket price with salary sacrifice	£294.13	£405.35	£515.23
Employees pay 12 equal monthly payments of:	£24.51	£33.78	£42.94

BuzzFare tickets are valid for unlimited travel on all Go North East buses (except our night buses which are numbered with an “N” prefix). More information on the range of BuzzFare tickets.

For employees who use Metro or other bus companies in addition to Go North East for part of their journey to or from work, it is still possible to make significant savings by purchasing a BuzzFare ticket through our salary sacrifice scheme and then a season ticket for Metro or the other bus company.

How the Scheme Works
The scheme is open for staff to join at any time during the year. To comply with HMRC regulations an annual commitment to the scheme must be made by the employee. However, the tax rules allow for a number of ‘lifestyle changes’ meaning an employee can, in most circumstances, leave the scheme without any retrospective tax liability to consider.

Go North East will produce an annual photo identification card for each employee, which will be enclosed with their first 28 day ticket. This is followed by a further 12 x 28 day tickets which are issued every 28 days. The ID card should be available for inspection each time the ticket is used.

Tickets will be dispatched without charge by Go North East using Royal Mail 1st class post for internal distribution to employees. Tickets will reach your organisation no later than 3 days before their start date. Your organisation will be invoiced when tickets have been dispatched. Your invoice will clearly display the names of the employees receiving tickets and the cost of their tickets each month.

HMRC Guidelines
Salary Sacrifice schemes like those for child care vouchers and bicycles are now well established. Such schemes are low risk and are accepted by HMRC as a legitimate method of tax planning.

We have taken professional advice to make sure that the BuzzFare Salary Sacrifice scheme complies with HMRC regulations. The regulations also state that employers must make sure that any scheme is ‘available generally’ to all employees and an employer cannot, for instance, use the scheme exclusively to buy out an individual employees parking space. Tickets must be used for ‘qualifying journeys’ (journeys to and from work) but there are no requirements on how often they are used and no restrictions on travel at other times. Tickets cannot be purchased for other family members through a salary sacrifice arrangement.

To comply with HMRC regulations there must be some element of employer financial subsidy to Go North East to provide the scheme. This takes the form of a one-off £350 subsidy payment to Go North East to start the scheme; this is typically less than the cost of one annual ticket.

More information on the salary sacrifice tax regulations for public bus services is available from HMRC at www.hmrc.gov.uk/manuals/eimanual/EIM21855.htm

Want to know more?
We are happy to talk to employers about the scheme and to provide details on the substantial benefits it delivers; for example, its scope for adding to corporate social responsibility agendas, or just its potential for making more space available in the car park!

Contact:
Stephen King on 0191 422 9213
Tracey Walton on 0191 422 9272