Section 242 — Income Tax (Earnings and Pensions) Act 2003: Works transport services

Works transport services 242 1 No liability to income tax arises in respect of the provision for employees of a works transport service if—

a the service is available generally to employees of the employer (or each employer) concerned, b the main use of the service is for qualifying journeys by those employees, and c the service—

i is used only by the employees for whom it is provided or their children, or ii is substantially used only by those employees or children.

2 In this section— “ children ” includes stepchildren and illegitimate children but does not include children aged 18 or over, and “ works transport service ” means a service which is provided by means of a bus or a minibus for conveying employees of one or more employers on qualifying journeys.

3 For the purposes of this section—

a “ bus ” means a road passenger vehicle which has a seating capacity of 12 or more, and b “ minibus ” means a vehicle constructed or adapted for the carriage of passengers which has a seating capacity of 9, 10 or 11.

4 But a vehicle which falls within the definition in subsection (3)(b) is not a minibus for the purposes of this section if—

a it has one or more disqualified seats, and b excluding the disqualified seats, it has a seating capacity of 8 or less.

5 For the purposes of subsections (3) and (4) the seating capacity of a vehicle is determined in the same way as for the purposes of Part 3 of Schedule 1 to VERA 1994 (vehicle excise duty on buses). This applies whether or not the vehicle is a bus within the meaning of that Part of that Schedule.

6 For the purposes of subsection (4) a seat is disqualified if relevant construction and use requirements are not met in relation to it. In this subsection “ construction and use requirements ” has the same meaning as in Part 2 of the Road Traffic Act 1988 (c. 52) or, in Northern Ireland, Part III of the Road Traffic (Northern Ireland) Order 1995 (S.I. 1995/2994 (N.I. 18)).