ITM BUILDS ON WWF-UK WORK TO FOCUS ON PERSONAL LOYALTY PROGRAMME TAXATION INEQUALITY
Call for Government to Address Barriers to Change
The Institute of Travel & Meetings (ITM) launched another new paper this week, for members and subscribers of ICARUS, which takes a look at the issue of Personal Loyalty Programmes, their impact and the tax treatment of these schemes.
The paper identifies that Personal Loyalty Programmes, such as frequent flyer or frequent stay schemes, can undermine managed travel programmes. It also suggests that the current tax regime may discourage companies from trying to introduce similar schemes for travel avoidance.
The report builds and expands on a paper originally produced by Dr Stephen Potter, Professor of Transport Strategy of The Open University and Keith Buchan, of the Metropolitan Transport Research Unit, commissioned by WWF-UK last year. The original draft focused on personal loyalty points applied in the aviation sector but ITM have broadened the report to cover all loyalty schemes in the travel sector as a preliminary look at the subject in advance of their second "Exploring Transparency in Remuneration" report due later this year.
Commenting on the report, ITM's chief executive, Paul Tilstone, says, "There are two key issues identified in the report. The first issue is that these schemes muddy the water for those trying to manage travel programmes and can lead to higher travel costs and non-preferred suppliers being used. The second is that the tax treatment of these schemes does little to encourage similar schemes through which companies are trying to incentivise video conference use. This acts as a barrier for change."
ITM suggests that the government should offer tax incentives for programmes designed to reward those who move to video conference or other communications technology rather than travel.
Tilstone then goes on to explain why the report is considered "preliminary", "...because the diverse nature of these issues means more work is needed. The issue of influence at point of sale of these schemes will be explored further by ITM later in the year, whereas the issue of taxation is one we will be engaging government on, on an ongoing basis, alongside the inclusion of VC in the enhanced capital allowance scheme - work WWF-UK started in 2008."
Copies of the report are available free of charge to members via the ITM website
