Congestion Charge

35 per cent of employers have decided to foot the bill for the Central London congestion charge for those employees who drive in to work. The congestion charge is thus increasing the cost for City businesses at a time when they can least afford it.

This is the result of a survey of over 1200 employers and advisers as conducted by www.hrlaw.co.uk, the online employment law service provided by City law firm, Fox Williams.
Helen Monson, employment specialist at Fox Williams, says:
We were surprised at the high proportion of employers who considered that they would have to foot the congestion charge bill for their employees.

In the current market they obviously feel that it is necessary to pay the charge to ensure key employee retention. It may also be a consequence of the currently unreliable state of the tube and in particular the Central Line.

Employers and employees alike need to be aware of the tax implications arising from reimbursing employees for the congestion charge. Such reimbursement will be regarded as a taxable benefit in the hands of employees unless the charge is wholly, exclusively and necessarily incurred as a part of their duties, which the Revenue says does not include commuting to work from home.
Some employers may prefer to offer an interest free loan to all employees who need or choose to drive into work. This could be offered on the same basis as loans are currently offered for rail or tube season tickets.

Helen Monson also adds:
Employers who do agree to pick up the cost of the congestion charge need to make it clear that they are not also picking up the penalty charges if the employee forgets to pay!