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Give drivers tax breaks for car-sharing, urges report

Published 17/08/2015

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There is a "strong case" for encouraging the growth of car sharing, Policy Exchange said

Drivers who offer fellow commuters a lift should be given a tax break as part of plans to increase workers' mobility, a think-tank has recommended.

There was a "strong case" for the Government to encourage the growth of car-sharing, the Policy Exchange report found.

The think-tank said making it easier for people to travel an extra 20 minutes to a workplace would dramatically increase the job opportunities available.

The report said: " Across the eight city regions outside the South East of England, commuting an extra 20 minutes on public transport would put people in touch with an average of two major employment sites - equivalent to 10,000 additional jobs."

Having access to a car for an extra 20 minutes of commuting time would give even more options, the report said.

" Two of the biggest downsides to the car - affordability for people on low incomes and congestion - are being moderated by advancements in technology and the sharing economy.

"Car-sharing, mediated by an app, is lowering the cost of travel for consumers, giving people on low-incomes access to car travel and reducing congestion on the roads.

"Taken together, there is a strong case for the Government to incentivise its growth through commuter tax benefits."

The report suggested such a policy would have a particular benefit in Birmingham, Leeds, Hull and Blackpool where there was already a higher than average number of car sharers.

The think-tank suggested either allowing employers to give workers travel vouchers to pay for ride-sharing, which could be issued before tax, or allowing drivers to keep a portion of their earnings tax-free if they offer people a lift.

The report also suggested t he introduction of part-time rail tickets to reduce fares for commuters who travel to work three or four days a week, the devolution of rail franchises to local transport bodies in city regions and giving councils responsibility for the commercial bus subsidy.

Report author Damian Hind said: "Commuting can be expensive and tiring but longer commutes can hugely increase people's job prospects. The Government needs to make transport cheaper so people can commute further and more efficiently so that they can get to work faster.

"Reducing the costs associated with longer commutes is one of the best ways to boost employment and wages. Greater local control over public transport, flexible rail fares and tax incentives for car-sharing are among the many ways of encouraging people to travel a bit longer in search of better jobs."

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