A SEVEN-strong raft of tax breaks to kick-start green commuter plans has been launched in the Budget in a move billed as the most radical ever package of environmental tax reforms. Chancellor of the Exchequer Gordon Brown has ploughed £5 million into the measures to remove benefit-in-kind tax liability from schemes including company-provided bus services.

It follows head-to-head talks between the Treasury and the Department of Environment, Transport and the Regions to tackle the 'two-faced' policy on green commuting. The DETR was telling companies to implement measures to get people out of cars, while the Treasury was taxing them for the privilege. From April 6, benefit-in-kind liability will be axed on work buses, subsidies to public bus services, company-provided bicycles and cycling safety equipment and workplace parking for bicycles and motorbikes.

Employees who use their own bicycle will be able to claim capital allowances for part of its cost and a 12p a mile tax-free cycling allowance will be created for employees using their own bike on business travel. Employers will also be allowed to make tax-free payments to employees for alternative transport when car sharing arrangements temporarily break-down to tackle the Achilles heel of such schemes.

The clean, green measures are expected to create a surge of interest among companies which had backed off the schemes because they were concerned at the tax implications. Companies already stung by hefty tax bills were warning that their green commuter plans were in jeopardy and that neighbouring firms had been put off running schemes because of the heavy tax burden. Among those who claimed they were being punished for trying to cut down on congestion were high street retailer Boots, which was warned it faced a £500,000 bill for providing work buses for staff.