Cycle to work scheme users - The Telegraph is after you!

Not like the Telegraph to go after rich people exploiting tax loopholes.....that they didn't close in their 14 years in power....

I think that's the first article in the Telegraph I've read that makes sense. Totally agree.

The irony and hypocrisy of one of the UK's most right wing papers coming up with a socialist takedown of the flaws in the scheme is very amusing.

Gordon Brown's loophole?? After (as MCTD says) the tories did nothing to close it in 14 years. Amazing.

I like the use of the word "shamelessly" too. Like they never maximise their tax breaks themselves.

I'm not sure if i'm a rich cyclist or a taxpayer, i think i'm both, so does that mean i'm a goodie or a baddie ?

Erm...hang on. I might be middle class, but I certainly do not get a 6 figure salary (how the fudge is that middle class BTW???) and my lycra stays firmly ensconced in baggy outerwear thank you very much. So you can stuff your rant elsewhere thanks Ben Wilkinson.

Off to polish my 3 x C2W purchased bicycles* 😉 (*not factually correct I've only had 2 (currently only 1) and both used for, checks notes, cycling to work) 

There are some reasonable questions that could be asked about C2W - AIUI the people who are on the lowest incomes (and so are most likely to be reliant on bikes/buses to get to work) aren't eligible, and I also thought it wasn't necessarily the best deal for people on 'six figure salaries'.

However, Telegraph.

"Middle class men" so no women? "lycra clad" so other forms of clothing are OK? "tearing through a red light" actually most don't. "hugely expensive bicycle" unlikely to be on C2W if its hugely expensive.

And that's just the first paragraphs. Haven't read the rest, does it become less stereotypically anti cyclist?

Apparently it is only Middle-class men on six-figure salaries who get the hatred so ladies or those of us on less than 6 figures can crack on.

PS. Imagine if they knew I could get a gym membership, pension and a car on my work salary sacrifice scheme 😉

"I’m convinced that the salary sacrifice scheme is now routinely abused by wealthy cyclists who have no intention of using their expensive gift from the taxpayer on their commute."
"I suspect Whitehall and the City are full of top earners who have exploited this scheme to buy an expensive bike that they would not dare to bring into London for fear of it being stolen."

Sounds like he's imagined the entire thing. Why not get some data on the value of the bikes purchased?

Most people I know who used the scheme in the office, bought a reasonably priced bike intended for commuting (though often unused despite their best intentions). 

As keen cyclists be wary of selection bias when assesing the scheme. 

In an ideal world might the cycle to work scheme be different in terms if how it works? I guess it’s yes

But it’s there, with loads of people getting a bike and getting into cycling. 

So the Telegraph convinces us all it’s a terrible scheme only benefiting the rich

 That opens the door for a chancellor to make a populist decision and axe the scheme saving a few quid. Perhaps replacing it with a small pot of money for bikes for people in extreme hardship

Now Sarah can’t get a discount on a hybrid to get to her minimum wage job. Result?

That reminds me, my last one finished a few months ago. Time to go tax-free bike shopping again 🙂

Posted by: ampthill

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Now Sarah can’t get a discount on a hybrid to get to her minimum wage job. Result?

I'm fairly sure Sarah wouldn't be eligible now as the salary sacrifice would take her below minimum wage. This is one of the issues with C2W. From the Cyclescheme website:

"A salary sacrifice arrangement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rates. Employers must put procedures in place to cap salary sacrifice deduction and ensure NMW rates are maintained."

Attack is the best form of defence, for the famously tax shy Telegraph owner(s).

Posted by: ampthill

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Now Sarah can’t get a discount on a hybrid to get to her minimum wage job

unless it has changed , if you are on minimum wage you can't use a cycle to work scheme as it drops your wages below minimum wage 

Erm...hang on. I might be middle class, but I certainly do not get a 6 figure salary (how the fudge is that middle class BTW???) 

It's to perpetuate this myth of the hammered middle classes, you used to be comfortable middle class now you're the new poor - victims of champagne socialists. 

should never have been available to anyone earning in the higher tier tax bracket - but as hooli says, same view needs to be taken on cars, gym membership, childcare, pensions.  got to draw a line somewhere.

I'm not sure if i'm a rich cyclist or a taxpayer, i think i'm both, so does that mean i'm a goodie or a baddie ?

Depends on how much you're skimming C2W for surely? 

It is a bit weird to find myself aligned with the Torygraph on this, at least I get to say I called C2W out as a tax wheeze for the well off (maybe not just the "rich") before the RW meeja glommed onto it. 

I'm all for keeping C2W, but it needs caps and needs to benefit those further down the pay scales more than those with some income to spare (Which I am very much in the bracket for)... 

I’m not at all bothered about ‘rich’ people taking advantage of a tax benefit. The proportion of rich people doing it must be miniscule, and if they didnt get their bikes, more bike shops would shut, Manufacturers would scale back etc. The people pay their taxes (hopefully!), so using their benefits within the Law. These people in the article pay far more to the UK Government than me, so why cant they get a little bit back?

I thought the same with the £200 pensioners fuel payment, people complained that the ‘rich’ got it, yet the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

hmm, I use salary sacrifice to benefit my pension, to buy spare bike parts and am looking into getting a new car. Yes there is a genuine question about whether tax breaks that give more to higher rate tax payers are correct, but I am sure the Telegraph isn't interested in the whole concept.

I bought a Cotic Cascade (frame and fork) on C2W a couple of years ago. I've definitely used it to ride to work, but I've now moved offices and its too far away to cycle there or I'm on site in the middle of nowhere or working from home.

I recently bought another Frame (Cotic RocketMax) on C2W which will never be ridden to work. I've been cycling to work for probably 15 years though previous to this so I reckon I've got some retrospective benefits to cash in!!....

I'm also not a higher rate tax payer and don't ride through red lights, so I'm a goodey.

the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

Are the "rich" not net beneficiaries of the "system" already? 

Odds are their wealth is built in someway on a workforce whose basic education was provided by the state, who's health is (ideally) maintained by the NHS, who either use public transport of roads (part) funded and maintained by the state, to get to their employment where they help generate wealth (directly or indirectly) for the rich, or contribute to the smooth running of society (emergency services and central or local government), so the rich have a nice stable environment in which to operate, acquiring more assets and screwing money out of the rest of us... The rich are doing just fine, I don't think they'd miss cheap bicycles too much TBH... 

I've clambered far enough up the greasy pole that my family no longer qualifies for full child benefits and TBH I'm sort of OK with that, my income grows therefore my need of benefits and breaks should diminish proportionately, I'm not "rich" but I'm not poor, IMO Johnny stockbroker should pay the full ticket price for his Cervelo S5, we all know he can afford it several times over, I'll take one for the team and cover the cost of my own bike(s) too... 

I'd honestly feel better knowing an NHS Nurse could buy an affordable bike to get to their far more important, yet less well paid job than me and the rest of the middle-classes, or indeed the genuinely rich, who are really just scoring what amounts to a slightly better than 0% finance deal on another overpriced dandy horse for the collection... 

The Scheme simply isn't serving it's original intent and getting people with a genuine Need for a decent bike to get to/from work, people who don't have the means (disposable income) to buy one outright or on commercial credit. 

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?), and I'd maybe even rule out certain types of bike (Very few people need a carbon Enduro bike to get to work), remember in the early days when most companies were capping it at £1k? Boardman managed to rustle up some excellent VFM road and MTBs with an RRP of £999, I'd like to see that sort of thing again, Bike companies making a genuine affordable offering for real C2W punters within the  constraints of a fairer scheme... 

Dentists and Finance ****ers can sort their own funding options or find other way to be "tax efficient" I'm sure... 

Ok i didn’t know about the minimum wage thing. So I’m much more anti it now

Ok i didn’t know about the minimum wage thing. So I’m much more anti it now

The most obvious thing to do is to get rid of that rule and allow people to decide how they spend their own wages?

Posted by: cookeaa

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the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

A

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?), and I'd maybe even rule out certain types of bike (Very few people need a carbon Enduro bike to get to work), remember in the early days when most companies were capping it at £1k? Boardman managed to rustle up some excellent VFM road and MTBs with an RRP of £999, I'd like to see that sort of thing again, Bike companies making a genuine affordable offering for real C2W punters within the  constraints of a fairer scheme... 

Problem with caps is that it excludes some proper utility bikes like an E-longtail, the Tern GSDs of the world that can be used for the school run. Maybe the bike category thing is a workaround for that. Less easy to exclude certain bike classes and sub genres. 

Imagine all these people using the C2W scheme to buy a bike, exercise, keep healthy and not end up needing the NHS to spend a fortune on them.  It's a disgrace! ;o)

It would be good to reduce or take VAT off cargo and utility bikes… I guess that would lead to problems with definitions and classification of bike types… 

As for the rich, the ones we need to tax and don’t,  the ones that Gary  talks about… I suspect they aren’t worried about saving a few quid on a bike. 

They're going after car schemes too right?....

Right?

Those who cycle to work to their Amazon warehouse jobs aren't on C2W bikes - they're on some £30 special they've picked up from Facebook Marketplace.

I've always thought this was a weird scheme. And if it was aimed at low waged employees there's no need for the limit to be any more than £500. That gets a very decent commuter bike.

Like most [tax] legislation, it's good intentions are offset by loopholes that benefit some that don't need it while unintentionally penalising some who need it most. 

Would be simple to tighten it and make more fit for purpose. 

A higher rate tax payer using it get a bike to rude to work - fair enough. A lower rate tax payer using it to get a nicer bike that will never be used for commuting - not what Parliament intended.

If it wasn't called cycle to work and was called bicycle salary sacrifice nobody would give a monkey's uncle! I know enough tradesmen driving lowered VW vans with tax written off that only earn £12k a year......

My only real gripe is the minimum wage thing! Always thought that is stupid.

Posted by: gowerboy

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As for the rich, the ones we need to tax and don’t,  the ones that Gary  talks about… I suspect they aren’t worried about saving a few quid on a bike. 

The rich stay rich by doing all these things to the maximum extent allowed. Being rich allows you the freedom to play around with tax breaks, investments etc and it also means you (generally) have a good credit rating so you can spread the cost of everything, shift a balance around from one card to another at 0%, get access to special offers and discounts.

All things that "the poor" don't get access to.

When I worked in a bike shop, we offered a 6-month interest-free credit option via some provider; it required all sorts of form filing, phoning through, ID checks etc (this was before widespread use of the internet). Far and away the main people going for it were the ones on salaries we could only dream of. To them, it was a perk, a bit of a wheeze, a way to play the system a bit, improve their credit rating. 

LO-F'in-L at the Torygraph talking about tax evasion. 

The Barclay brothers (or brother, now) who own it know a thing or 2 about tax avoidance. 

Fraud and tax avoidance

In 2024,The Economistreported on strong grounds that the Barclay brothers engaged in fraud and tax avoidance or evasion in relation to a deal in the 1970s that saved the brothers from bankruptcy.The Economistalso found that Frederick Barclay concealed assets from a bankruptcy court, which is a crime.^[34]

Tax exile accusation

The Guardianhas stated that the brothers aretax exiles, and although they reside, at least some of the time, in Monaco (giving Avenue de Grande Bretagne, Monte Carlo as their address) they operate their businesses from an office in the United Kingdom.^[30][35]When asked if he was a tax exile, Frederick stated that he lived abroad for health reasons.^[36]The corporate tax arrangements ofthe Ritz Hotel, purchased and refurbished by the brothers in 1995, were the subject of a December 2012 investigation byBBC'sPanoramacurrent affairs television programme, which found the hotel had paid no corporation tax in the UK for 17 years, after legally claiming reliefs.^[37]

PS thanks HMRC for my C2W-bought Brompton that was used for train commuting for 4 years and is now a very useful car-reduction multi-mode transport tool. Think of the fuel duty I evaded as well as the tax! : ) 

I wonder how many people's new cars are on salary sacrifice?  I wonder if the author might have one?  What about private health care?  Where does the rage end?  

I just bought some Chris King hubs, headset and bb via C2W.  They are however for my commuter.  

Rather than a scheme to help the poor get to work, wasn't the cycle to work scheme orginally, and probably still, an environmental scheme to get people out of cars?

Just to say I don't like the fact all these schemes benifit the well off more than the less well of, but have taken advantage as a fitness and environmental benefit.

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?),

Yeah I think that's a bit tight. A good e-bike is more than that and why shouldn't a Tern GSD be in reach of C2W? 

I'd agree that the tax reduction could be 20% lower rate for all rather than off the top rate but them's the rules so far - like every argument about tax (imo) it comes down to the rules - don't hate the player, hate the game and those who write the rules of the game. But also, I have a lot of respect to anyone choosing to play a fairer game and not take all the advantages wealth can create. As some have said, it's possible to pay your taxes at a fair % of wealth and feel good about not being a leeching ****. 

Problem with caps is that it excludes some proper utility bikes like an E-longtail, the Tern GSDs of the world that can be used for the school run. Maybe the bike category thing is a workaround for that. Less easy to exclude certain bike classes and sub genres. 

Maybe there's just a different/variation on the scheme to implement then.

Perhaps you apply for the "environmentally-conscious School & Waitrose run C2W funding extension" to top that C2W cap up to the cost of a Tern, just supply Hermione and Isaac's birth certificates, your home and school addresses, and some google map screenshots of the other errands and commutes this cargo bike will be replacing a car for (Note: you will be disqualified if you have two cars, and the DVLA will be asked to monitor your home address for more than one car being registered while your still paying for the bike) 

I see no reason C2W can't serve its actual purpose and have some bolt-ons for the perfectly credible edge cases, currently its morphed into another funding option for middle managers to acquire weekend toys with, that needs to be bounded out. 

Perhaps you apply for the "environmentally-conscious School & Waitrose run C2W funding extension" to top that C2W cap up to the cost of a Tern, just supply Hermione and Isaac's birth certificates,

Being funny or doing the same class BS the Torygraph are up to? : )

Posted by: ogden

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If it wasn't called cycle to work and was called bicycle salary sacrifice nobody would give a monkey's uncle! I know enough tradesmen driving lowered VW vans with tax written off that only earn £12k a year......

My only real gripe is the minimum wage thing! Always thought that is stupid.

Posted by: gowerboy

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It would be good to reduce or take VAT off cargo and utility bikes… I guess that would lead to problems with definitions and classification of bike types… 

there's probably an argument for removing VAT from (road legal) bikes in general (and perhaps other sports/activity equipment) given the societal benefits and NHS long term savings.    The problem is that just like C2W (and EV salary sacrifice) the schemes would soon emerge which gravitate back to the same consumer price point.

Posted by: alanl

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I’m not at all bothered about ‘rich’ people taking advantage of a tax benefit. The proportion of rich people doing it must be miniscule, and if they didnt get their bikes, more bike shops would shut, Manufacturers would scale back etc. The people pay their taxes (hopefully!), so using their benefits within the Law. These people in the article pay far more to the UK Government than me, so why cant they get a little bit back?

The statistics would be interesting - but I don't think its as rare as you think.  It can't be both excellent for the bicycle industry supply chain and almost miniscule.  I know a couple of people who will be on or around six figure salaries who buy 4K bikes every year.  Thats roughly £1600 a year in tax they avoid.  The highest earners can afford to take bit hits on salary sacrifice because they are cash rich.  A director in my former company took home just enough to make sure he was in the 20% tax bracket.  He did that by pumping more into his pension than some of his direct reports earned, an EV salary sacrifice, C2W, etc.  He could afford to do that because he was mortgage free, had no kids an his wife was also a high earner.  So he paid less in tax than his deputy who had a mortgage, 2 kids, etc.  He wasn't doing anything wrong, the system was set up to make it very easy to do this.  

Imagine all these people using the C2W scheme to buy a bike, exercise, keep healthy and not end up needing the NHS to spend a fortune on them.  It's a disgrace! ;o)

Let's be brutally honest, this is pleb fodder! Give the plebs something to get enraged about to distract from bigger problems, no? The amount of fraud, waste abuse in public sector; the amount of CEO and millionaires who miraculously don't take home a big paycheck; the amount of conflict of interest in government etc etc etc the list goes on. I mean close one loop hole another opens. Change the rules and there will be someone else who should qualify who now cant. I've used cycle to work recently but in all honesty by the time you find a shop who accepts your provider, doesn't charge an admin fee and with the bike you want then the difference in price between that and the one that is on a good offer somewhere else isn't massive anyway. 

Being funny or doing the same class BS the Torygraph are up to? : )

Let's be brutally honest, this is pleb fodder! Give the plebs something to get enraged about to distract from bigger problems, no? 

Page 1: Stop cyclists exploiting tax loopholes!

Page 2: Keep landowners exploiting tax loopholes!

If the aim is to genuinely help employers get bikes to commuters - divert the benefit to employers for having loan bikes, secure storage, showers, etc. 

This.

Or, how about we leave the benefit exactly as it is and just accept that it is merely an exercise focused tax benefit rather than anything to get you to cycle to work.... The only change I would make would be to enable lower paid people to get a bike - rest leave as is. And I say this as somebody who pays an obscene amount of tax and this is pretty much the only tax break I benefit from

How else do people afford to buy e-bikes ?

Ive said it before bikes now appear to be priced in a way that their true value is probably what a top end tax payer ends up paying for these overpriced bikes 

Mrs FD bought ‘her’ Orbea emtb trail (commuter bike) on salary sacrifice. It’s made a stupidly expensive bike of £8k vaguely more affordable at about £4.5k

Posted by: FunkyDunc

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How else do people afford to buy e-bikes ?

 

Ive said it before bikes now appear to be priced in a way that their true value is probably what a top end tax payer ends up paying for these overpriced bikes 

 

Mrs FD bought ‘her’ Orbea emtb trail (commuter bike) on salary sacrifice. It’s made a stupidly expensive bike of £8k vaguely more affordable at about £4.5k

I'll bite - what is her commute like that she requires a trail emtb?

And how far up the spec list did she go to hit £8k? A quick Google, not knowing the model, suggests Orbea emtbs up to about £6k?

Not that I'm bitter that HMRC are daft enough to one day check what staff do with C2W bikes...

And how many minimum wage Sarah's could have had a completely free Boardman hybrid out of that 3.5k we the tax payers paid for your wife's bike?

I know its not that simple, there are many factors at play here - not least that if you give something to someone for nothing they don't tend to value it as much. Then there is the massive issue that there are probably very few minimum wage Sarah's that give a f*** about a hybrid to cycle to work as most people on low wages don't have the luxury of time rather than money to cycle into work as they have to shop, pick up kids and live in a modern estate which has a dual lane bypass to get to town.

Which is kind of my point here - there is a zero sum game here (as always) and I just think the 650 million could probably be better spent (on infrastructure perhaps) than getting the mostly comfortably well off a nice ebike.

If you actually read the article in the OP then its pretty much saying that its a laudable scheme but badly targeted.

Ideally it would be inverted, but that’s neither pragmatic nor simplistic.

fairly it would be a blanket rate, but that’s complicated,

So, it’s tax reduction as that’s by far the easiest to implement and thus the most pragmatic.  

It’s neither fair, nor accounts for the complexities - it’s simply, well, simple and this pragmatic.  Anything else would add significant complexity and costs.  It’s this or nothing.  

My view is that it equates to more mid-top end gear being available SH than would otherwise be the case.  

I'm racking my brains trying to think if they ran any critical articles on wealthy people tax dodging when the Barclay brothers owned them...

Then there is the massive issue that there are probably very few minimum wage Sarah's that give a f*** about a hybrid to cycle to work as most people on low wages don't have the luxury of time rather than money to cycle into work as they have to shop, pick up kids and live in a modern estate which has a dual lane bypass to get to town.

With due respect, this is motornormativity in action. Remember that 1:4 households in the UK, usually the most deprived, don’t have access to a car and minimum wage Sarah is likely to be in this group.

It’ll be the bus or Shanks’ pony.

Posted by: jameso

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The Barclay brothers (or brother, now) who own it know a thing or 2 about tax avoidance. 

Its unclear (to me anyway) currently who owns the telegraph. Lloyds took control when the Barclays failed to pay what they owed. The (I think) UAE sovereign wealth fund almost took control but were blocked by the tories and then it all got confusing.

I will admit I am conflicted on the cycle to work scheme. It does seem mostly a scheme to allow tax offsets for the people who can afford it. When I worked in the office I got to see the take up reports and since I cycled in I could easily check that against how busy the cycle racks and the showers were. 

I would be looking to fix the infrastructure instead. If more than a handful of people had cycled in it would have been a right pain in the arse queuing for the shower for example.

I work from home now and live near several warehouses. Looking at the bikes the poorly paid warehouse staff pass me on I dont think they are using the scheme.

Imagine all these people using the C2W scheme to buy a bike, exercise, keep healthy and not end up needing the NHS to spend a fortune on them. It's a disgrace! ;o)

Is a point you can get away with on a cycling forum......but I wouldn't try it on a running forum. Or Sunday league football, or sailing, or tennis....

If it was meant to be about fitness, it would not be so sport/passtime specific 

It's a stupid flawed concept and always was. And that's before cycling became the new golf and the number of people who would be interested in using it to afford a unnecessarily shiny toy went up exponentially. 

I'd return it to what I think it was initially intended to be and just remove VAT on bikes with a 'utility' classification to make switching to doing day to day tasks like commuting, going to school and grocery shopping on a bike a bit cheaper....with the added benefit of being open to all regardless of employer engagement (or even being employed). 

With a Tern GSD being how much it is I’d imagine the mythical Sarah will be walking or catching the bus. Most folks I’ve seen who gain value from cycling to work are riding on a bike I wouldn’t have bought when I started mountain biking in ‘92, but it gets them there and that’s all that counts.

yet the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

I could explain this to you but doubt you would understand it.

From my perspective the biggest flaw with the cycle to work scheme is that if your employer can't be bothered/won't because "reasons" then I can't use it.

The sums are small compaed to the tax revenue foregone on the reduced benefit in kind tax rates on electric cars that many 40% tax payers have on salary sacrifice company car arangements.   

The Barclay brothers (or brother, now) who own it know a thing or 2 about tax avoidance. 

I stand corrected - they haven't owned it since 2023. That's ok then..

Is a point you can get away with on a cycling forum......but I wouldn't try it on a running forum. Or Sunday league football, or sailing, or tennis....

A bike can be transport for anyone? Ride to the gym rather than fill up the car park, etc. Agree that tax breaks could support any activity but encouraging people to use bikes more is a good aim nationally. Poor infrastructure and car culture are major barriers but cost does come up at the top of every survey I've seen on low transport cycling/e-bike take-up.

out of that 3.5k we the tax payers paid for your wife's bike?

I will bite - clearly you don’t understand how CTW taxation works 

Actually in this instance it means Sarah might actually get her  cancer treated, as reducing Mrs FDs income took her under a threshold that meant she could end up going to work and it not costing her money.

A bike can be transport for anyone?

Of course it can. But that's not why anyone (regardless of 6 figure salary or not)  buys a £6k piece of sports equipment/toy. It's people buying that sort of thing (and the E equivalent) to go round and around in circles in the woods at the weekend or the road equivalent on a tax break that is a complete anomaly when you could make just as good a case for buying a racing dinghy on the same scheme if the purpose was to keep fit. Or your running shoes. It only exists as a loophole as a bike is an umbrella term to cover utility vehicles and sports equipment. Yes, there are edge use cases (like me) that use use sports equipment as commute transport because it's 25 rural miles each way but I'd happily forego any fiscal help I might get to keep the scheme relevant. 

But that's not why anyone (regardless of 6 figure salary or not)  buys a £6k piece of sports equipment/toy. It's people buying that sort of thing (and the E equivalent) to go round and around in circles in the woods at the weekend or the road equivalent on a tax break that is a complete anomaly when you could make just as good a case for buying a racing dinghy on the same scheme if the purpose was to keep fit

Agreed on how that aspect of it is open to criticism, always has been. Some may commute on an expensive MTB or road bike - I have done, many don't.

imo if it's all or nothing because there's no way to police the end use or intent of the purchase, or it's difficult to classify bikes easily, the intent to make cycle ownership easier in the wider population ('2 wheels good' kind of thinking) overrides that misuse/wider use/abuse, whatever anyone could call it. Plus it would demand making it less reliant on the employer signing up, and making it open to all on PAYE, perhaps limit the purchases to one every 4-5 years. It's a flawed system for sure. 

or it's difficult to classify bikes easily

I reckon it could be done pretty easily. Manufacturers/distributors would just need to apply for a specific model to be VAT exempt in a one month window every year and someone with a vague idea would need to pronounce yay or nay for VAT exemption. Yes, it could be easy to blur the lines with gravel bikes that can be used for more brisk longer commuting but if I'm brutally honest they are not the sort of people who need thd incentive as they are going to do it anyway. All funds need to be pushed towards people who would not otherwise be biking buying proper utility orientated well made bikes designed for shorter distance a to b rides in comfort.

Imo one of the worst things that happened in the UK was when people were conned into buying mtbs for this sort of riding. Look at countries where they take utility riding seriously and it's just nothing like as prevalent. 

VAT exemption also has the benefit of being a flat discount regardless of tax band your income puts you in so the bloke on the factory floor on minimum wage gets the same discount as the bloke in the boardroom. 

More people buying and riding bikes of any time is good. I donmt really care if you earn more than me and buy an £12.5k Levo SL S Works or if you buy a £250 Halfords bike for riding to work. It’s helping the bike industry, it’s helping the buyer, it’s getting people fitter both physically and mentally.  Does my wife and some of our friends save 45% over my 20%? Yes, does it bother me? No.

The only thing that really bothers me is that there isn’t some way for people on exactly minimum wage to get something cheap and reliable. But then a £500 bike works out at about £33 month (over a year) so the system should make allowances for them. 

Cyclescheme has been running for over 25 years now and over 1.6 million of people of all incomes have benefitted from it. And with GCI as well that’s all good in my opinion. 

I think there's a lot of people here who are slightly bitter and twisted that they can't take advantage of the scheme. Overall, I think in the taxation picture this is a tiny story. Whilst there are people who buy very expensive bikes, this isn't about what you need. It's about what you want. This isn't communism, if you want to commute on a £300 or on a £15,000  bike - so what? There's also the health benefit which goes towards the NHS and reducing costs there that we need to consider. 

Personally speaking, I would be more concerned about the tax issues around the motability schemes. I knew two people who had cars on this and I'm not entirely sure if the person the car was purchased to help even knew that the car existed! The people just treated the car as a massively discounted purchase that was their car. My sample size are small but I suspect this probably happens an awful lot and I think this probably costs us a significantly larger sum than the odd dentist on their pinarello!

Just to muddy the waters even further, what about high earners that do the C2W to still get free childcare hours - the other option means they just dump it in pension and then it doesn't go into the economy....

Posted by: quentyn

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I would be more concerned about the tax issues around the motability schemes.

It would be interesting to know the true picture here but there’s certainly a decent amount of anecdote about Motability being a bit open to abuse.

I will start listening to the telegraph when they start campaigning against the British dependant tax havens like the channel isles, the isle of man ect

https://taxjustice.uk/blog/worlds-top-tax-havens-are-british-territories/

Ideally the scheme would just cover commuter/utility bikes.  And you'd think that would be easy to enforce and could even lead to more useful bikes being sold - maybe regulate it can only be used for bikes with full length mudguards, cargo carrying ability (rack mounts) and fitted with lights. 

But you'd just end up with a load of carbon road bikes being sold with crappy cheap clip on guards that would be thrown away.  

Taking VAT off things doesn't generally work - theres very good research to show that pretty much every time it's done the discount thats supposed to be passed on to the consumer gets sucked up as additional profit by retailers and manufacturers.  

So this is an imperfect solution that subsidises bikes, but more bikes are fundamentally a good thing - healthier population. So rock on. 

Though practical commuter bikes are something I'm quite into, it's surprising that some think the way to get more people on bikes is to dictate their choice of bike if they want it via a tax free benefit. Majority of people in the UK don't buy practical bikes because they're seen as dull, like they don't choose sensible size/power cars to drive to work or anywhere else. Gravel bikes are an ideal commuter and a good percentage of those sold are used as commuters.

Maybe it should just be called Cycle Active Scheme or something like that, to get past this fixation on work commuting and look at increased bike use overall, recreation or transport.

Posted by: zerocool

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It’s helping the bike industry

mostly the bike industry of Taiwan, true. But let's have every industry subsidise every other industry!

If you really wanted to improve sustainable travel for the low wage, you'd abolish the whole thing and subsidise buses more.

A lot of people claiming that c2W has been very effective and has got a lot of people into cycling. Has it? Someone must have done studies...

I see no reason C2W can't serve its actual purpose and have some bolt-ons for the perfectly credible edge cases, currently its morphed into another funding option for middle managers to acquire weekend toys with, that needs to be bounded out

Anyone got any stats on that. Either in terms of the average value of bike bought or the proportion that go to high rate tax payers. 

In terms of The people i know who’ve used the cycle to scheme most and aren’t what I’d call rich and have been ridden to work. Maybe one was rich but he did ride the bike to work

Headlines aren’t stats and Sarah Butt’s hybrid to ride to Pizza Hut isn’t much of a headline

I think there's a lot of people here who are slightly bitter and twisted that they can't take advantage of the scheme. 

I've been able to access it for the last 12 years, actually commute to work on a bike for part of the week/year and still think negatively about it. Weird huh.

I think there are a lot of people here that are slightly inclined to defend the indefensible because they've (ab)used it themselves and would like to do again or....they just like bikes too much to think about it particularly clearly.

And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Posted by: convert

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or it's difficult to classify bikes easily

 

Imo one of the worst things that happened in the UK was when people were conned into buying mtbs for this sort of riding. Look at countries where they take utility riding seriously and it's just nothing like as prevalent. 

 

 

 

Imo this is because bike shops in the uk dont really sell utility bikes.  We get road bikes with low drop bars or mtbs.   Mtbs are a much better bet for non cyclists 

Posted by: convert

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And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Pathetic. Personal insults. I never said they deserve a kick back, I said I cant see the problem with them using the tax advantage available to them, and, they pay far more to the Exchequer than average earners, so why not use the legal tax break to get their bike.

If you want to have a go at tax abusers, maybe get Labour to start taxing the mega corps who pay litle or no tax here, yet have multi billion pound sales in the UK, people on PAYE, even higher payers, are small fry compared to what Apple/Amazon et al get away with with their accounting practices.

The most obvious thing to do is to get rid of that rule and allow people to decide how they spend their own wages?

This has an danger that employers will use this to avoid their responsibility to pay minimum (the) wage. See also umbrella companies and other shady stuff people use to avoid their responsibilities/shift cost to those that can't afford it.

I think it's amusing, yet not surprising (on here) that people get hot under the collar about some people getting a tax break on a bike, yet mention benefits cheats and it's a non issue, 'hardly anyone does it in the grand scheme of things, stop being a nazi'

Posted by: zerocool

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The only thing that really bothers me is that there isn’t some way for people on exactly minimum wage to get something cheap and reliable. But then a £500 bike works out at about £33 month (over a year) so the system should make allowances for them. 

There is sort-of, its called the Cycle To Work scheme, if you believe that the 'benefit' should be an added benefit, then it has exemptions for having pool bikes which would serve exactly the purpose you describe, and while it might cost the company money, would mean that the employee could get a bike without BIK being charged. The problem is that C2W makes money for companies, and so the swing from making profit on 'loaning' staff bikes for money > letting staff use bikes for free, is a really big swing. However there would be nothing preventing companies that say employ lots of people for high wages using that profit to make a pool of free bikes available to their lower paid staff. They just choose not to.

Posted by: alanl

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Posted by: convert

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And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Pathetic. Personal insults. I never said they deserve a kick back, I said I cant see the problem with them using the tax advantage available to them, and, they pay far more to the Exchequer than average earners, so why not use the legal tax break to get their bike.

If you want to have a go at tax abusers, maybe get Labour to start taxing the mega corps who pay litle or no tax here, yet have multi billion pound sales in the UK, people on PAYE, even higher payers, are small fry compared to what Apple/Amazon et al get away with with their accounting practices.

I agree that personal insults is ridiculous and uncalled for, however, how seem to be saying its OK for affluent individuals to exceed the limits of the rules because they pay more tax than others whilst at the same time criticising tech firms for applying the letter of the rules.

Lets remind ourselves what HMRC say:

• the employees must use the cycle or equipment mainly for qualifying journeys. ‘Qualifying journeys’ means the same as for the works bus exemption (seeEIM21850). Other use of the cycle, for instance pleasure use or use by members of the employee’s family will not disqualify the exemption provided that the other use is not the main use of the bicycle.

(my bold).  Whilst some people here are probably arguing the tax exemption shouldn't apply to high earners, I don't think many object if the bike is actually used primarily for commuting.  There are undoubtedly people buying bikes they have no intention on using for commuting.

Your argument that they should have more flexibility because they pay more tax, is actually basically the Amazon/Apple argument - Apple and Amazon argue their activities contribute an awful lot of PAYE/NI/VAT so the state should not look to be too strict on the corporation tax rules.  You seem to be saying, that as I pay more tax (as a Scottish tax payer) than someone south of the border on similar earnings - really HMRC should cut me some extra slack?

Yeah, it's a loophole, but if you don't take opportunities where you find them, you're just robbing yourself. 

I bought my first Salary Sacrifice bike 20 years ago, my last, about a year ago. It's a long travel E-MTB. I'm a working class 40% tax payer so it saved me a fortune. I ride it to work, 2 or 3 times a year. The rest of the time I drive my EV, another tax break. I've had childcare vouchers, gym memberships etc. 

**** the Torygraph. 

It's only a loophole if it's used legally. HMRC say:

4.6 The following conditions must also be met:
• An employee must not, at any point during the hire period, own the cycle;
• At least 50% of the cycle’s use must be for ‘qualifying journeys’, i.e. commuting to
work purposes;

Surely if you're knowingly using the scheme to buy a bike that's never/hardly ever going to be used to ride to work, then it's just fraud.

I'd have thought the scheme could be made more general to encourage all sorts of folk to cycle on health grounds - our obesity/poor health crisis. I suppose some sort of graduated means testing might work. It would be good to support younger people getting into cycling.