Public transport costs and tax
There are certain tax rules that it is important to consider if you pay for the public transport costs of your employees. The provision of public transport costs includes season tickets provided for employees, season ticket costs reimbursed to employees, loans made to employees to buy season tickets and contributions to subsidised or free public bus transport.
If you are contributing to subsidised or free public bus transport there are no reporting requirements to HMRC, and you do not have to pay any tax or National Insurance based on these costs. This is because there is a special exemption in place for subsidies to public bus services. One example of this provided by HMRC is where you help finance a bus route that gives your employees free or reduced-rate transport between their homes and work or between workplaces.
However, if the public transport costs are not exempt then the costs will need to be reported to HMRC with tax and National Insurance implications. This includes where season tickets are provided to your employees, where the cost of a season ticket is reimbursed or where a loan is made to your employee to purchase a season ticket.
Source: HM Revenue & Customs | 15-01-2020