Annual Season Ticket Loan
1.1 The University operates an annual season ticket loan scheme, which does not qualify as a taxable benefit. These notes contain details of the scheme.
2. Tax Treatment
2.1 Interest free loans are taxable under the Inland Revenue regulations regarding beneficial loan arrangements. There are a limited number of specific exemptions but these do not include loans in respect of travel costs.
2.2 The Inland Revenue does, however apply a threshold and where the benefit of a loan in any tax year does not exceed £387, no tax will be charged.
2.3 The benefit of any loan is calculated as being the difference between the interest charge, if any, on the loan and the “official rate” of interest.
2.4 At the present time, loans less than £5,000 will, therefore, be effectively tax free.
3.1 To obtain an annual season ticket loan staff are required to complete the online application form via Employee Self Service in Oracle HCM, it can found under 'Pay Elements'
3.2 Applications will need to be approved electronically by the individuals Line Manger
3.3 By completing a self service application applicants agree to the recovery of any outstanding loan balance from their final pay if they cease employment with the University. In those instances where there is insufficient final pay to fully repay the loan the remaining balance is immediately due.
3.4 Applicants will need to request the price of the season ticket from the travel provider before completing your application
3.5 Payments for season tickets will be made by BACS transfer into the applicant’s bank account in next month’s salary. This is assuming that the payroll has not already been run for that month (in which case it will appear in the following month’s salary). Your application must be approved by your Line Manager by the 17th of the month to ensure that it is paid in this month’s pay. It is possible to apply for a new loan up to 2 months before the current loan finishes i.e. you can apply after you have made your 10th payment.
3.6 Recovery of the loan will be deducted from pay in 12 monthly instalments.
3.7 Annual season ticket loans must only be used for the purchase of travel tickets by staff. Loans must be fully repaid prior to a new loan being issued. The Scheme will be strictly audited and to ensure that the scheme is being properly used staff are required to forward a copy of receipt of purchase to Payroll in Finance before the first deduction from pay. Loans for subsequent years will not be made to staff that have not complied with this arrangement.
3.8 The operation of the scheme will be reviewed annually.
3.9 Abuse of the Scheme will lead to disciplinary investigation.