The cost of travel to and from work falls particularly hard on young people because it often constitutes a higher proportion of their wages than it does for more established people. The cost can run into thousands of pounds a year,. Although young people (16-25) with railcards can qualify for one-third reductions on travel, these are only for off-peak travel, which is no use to people travelling to and from work at peak hours. It would help many young people if the cost of journeying to and from work were treated as a legitimate business expense and could be deducted from taxable income. The proposal is that for those under 25, the ones who qualify for a young person's railcard, they would be allowed the cost of their commuting to and from work as a tax-deductible expense. This would, of course, mean that the Treasury would receive less tax money from them. But there would be gains, too, in that it would make work more attractive and would result in more young people in work and off benefits. Furthermore, the increased spending power this would give some young people would increase the other taxes they paid to HMRC.
Someone in London starting out on perhaps £13,000 a year might currently spend almost £2,500 on an annual season ticket for London's Underground zones 1-6. If this were tax deductible, it would take them below the threshold and out of income tax altogether. Given the government's current commitment to raising the starting threshold of income tax to the level of the minimum wage, this would be of help to even more people in the future.
What is true for travel to and from work in London is true for other cities, albeit often on a smaller scale. Living in city centres tends to be more expensive than living on the outskirts. Young people are caught between the high rents of central accommodation and the high travel costs incurred by living further out. Although yearly season tickets can reduce the cost somewhat, many young people simply cannot afford the capital outlay it would take to buy one, and have to settle for monthly or even weekly tickets. Making commuting costs tax-deductible for people aged under 25 would be of immediate and practical help.