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It's only a loophole if it's used legally.HMRCsay:
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;
The whole guide is badly worded and flimsy. I'd take that to mean that everyone involved has zero interest in pursuing any abuses of the scheme.
You don't even have to buy a 'cycle', you could buy some accessories, or parts, or spares. I've got a winter jacket as part of mine. Do I have to remember to take it off when I get home before walking the dog? What about the lip balm I used to get the total up to match the voucher value? Should I wash my face as soon as I get into the office?
I'd rather they just removed / tapered VAT on all bikes. It'd be easy enough to say any bike <£1k is VAT free and anything over that is a 20% marginal rate unless it's demonstrably a cargo / utility bike, you might end up with Colnago putting guards and clip on panniers to a C60, but it would be an expensive risk for them if HMRC pursued it so I can't see many brands trying it.
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.
The rules are, by design (imho), vague. Yes, at the point of ordering you should intend to use it for at least 50% of qualifying journeys. At the same time there is no requirement to log journeys so you can't be compelled to have anything other than the intent to do so. Circumstances change, and let's be honest, if everyone who ever bought a bit of sports equipment intending to use it 'every other day' got in trouble when they didn't, our courts would be even more over-subscribed than they are now.
If anyone wants to take the moral high ground, then they're welcome to enjoy the view. My opinion is the hate the game, not the player, if you want a new bike and you can use a C2W scheme, then grab the opportunity with both hands before someone changes their mind and stops it.
As for the Tories, the scheme got a lot better "on their watch" limits were raised, requirements loosened.
It's hard to resist when it's a massive break for you. I recently bought a Trek Fuel ex8 Gen6.
RRP was £4200 but it was 48% off at Balfes. They then allowed me to buy on C2W which took it down to something less than £1400 new... How can you resist a deal like that.
siscott85 - so you bought a long travel eMTB intending to commute on it more than other use but it just didn’t work out that way? Lots of stuff gets bought and not used - but then 1 ride to work would tick the box. The issue is when someone buys a very expensive tax free asset which they ride most weekends and then use once a year to get to work when their car is in the garage and claim it’s legit C2W purchase. Then that person preaches that it’s not their fault, they are just a working class 40% tax payer who is playing the game. You are not, you are a (minor) tax evader. The fact HMRC hasn’t worked out a viable way to police it is irrelevant - you are choosing to ignore the rules, under the justification that failing to do so would be stupid. Hopefully someone does close the loophole, preferably without punishing those it really does make the difference for how they commute.
thisisnotaspoon - the flexibility for accessories is meant to do exactly what you descibe - make it no concern if you ride your bike home in a c2w funded jacket then take the dog for a walk in the same. It’s not designed for you to buy a full face helmet and armour for your weekend downhilling.
It's hard to resist when it's a massive break for you.
Is that not the defence of everyone who exploits tax “loopholes” whether it’s paying cash for a no VAT job, the “company van” which is used more for bikes than tools, IHT avoiding trusts, companies offshoring profits (or licensing their “own” trademarks from sister co in Caymens) etc.
As with everything in tax we tend to look at those who earn more and think “greedy bastards should pay more and stop trying to be clever”. Perhaps they would if they didn’t think everyone was playing some part of the system one way or the other.
thisisnotaspoon - the flexibility for accessories is meant to do exactly what you descibe - make it no concern if you ride your bike home in a c2w funded jacket then take the dog for a walk in the same. It’s not designed for you to buy a full face helmet and armour for your weekend downhilling.
My point was rather that HMRC really don't seem to care, if they cared then the guidance would have been written competently.
Is that not the defence of everyone who exploits tax “loopholes” whether it’s paying cash for a no VAT job, the “company van” which is used more for bikes than tools, IHT avoiding trusts, companies offshoring profits (or licensing their “own” trademarks from sister co in Caymens) etc.
No, because ones tax avoidance, the other is tax evasion.
Pensioners make full use of a tax avoidance scheme by having deferred their income to a stage of their life when they'll be need less income and therefore in a lower tax bracket. The rules say that's fine.
Paying cash for something to avoid VAT is evasion because the rules say it should have been paid.
The morality of those taking the piss out of it somewhat is a sliding scale though. From those buying a bike to ride to work, those riding to work on a different bike but buying a weekend toy, to those buying a bike with no intention of ever riding it or any other bike to work.
I can't see the scheme getting canned though, the salary sacrifice car schemes are a far bigger gravy train, and more likely to be deemed to have outlived their usefulness in the next parliament once EV's are the de-facto for cars.
siscott85 - so you bought a long travel eMTB intending to commute on it more than other use but it just didn’t work out that way?
Lots of stuff gets bought and not used - but then 1 ride to work would tick the box. The issue is when someone buys a very expensive tax free asset which they ride most weekends and then use once a year to get to work when their car is in the garage and claim it’s legit C2W purchase. Then that person preaches that it’s not their fault, they are just a working class 40% tax payer who is playing the game. You are not, you are a (minor) tax evader. The fact HMRC hasn’t worked out a viable way to police it is irrelevant - you are choosing to ignore the rules, under the justification that failing to do so would be stupid. Hopefully someone does close the loophole, preferably without punishing those it really does make the difference for how they commute.
Oh god no, I took advantage of a scheme to save a bunch of tax. I will (anonymously) admit to that. I'm not much of a preacher, but at least I'm not a hypocrite. Let's be frank, I'm not alone, especially amongst STW posters.
As for HMRC's intent, they removed the upper limit of £1k in 2019, maybe policing it isn't their main concern?
Like I said, if people don't like it, then they don't need to use the scheme. If they close it, I won't complain, nice whilst it lasted. They may do; the current Chancellor is trying to increase revenue by any means possible.
I don't know why posters on STW would be so angry about it, an excess of moral superiority or bitterness of not having a scheme open to them? It puts more bums on saddles, never a bad thing.
Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?),
Wouldn't get you an E-Brompton. About to buy my first Bike to Work bike for over 10 years, and it will be titanium (see username), almost 100% used for work, British built and foldable for my mixed mode commute to the new office. Sadly I'll need more locks as it's a bit more desirable than my £125 Mezzo (and four kilos lighter).
As for bling carbon road bikes for six-figure salaried MAMILs, would those would be the same MAMIL's that don't get a personal allowance? So perhaps things even out a bit. I imagine the Telegraph has its own salary sacrifice perks they (ahem) failed to mention. Oh look! they do...
The firm's existing pension scheme, childcare vouchers, bikes to work and computers at work are also available via salary sacrifice.
Errr https://www.hrmagazine.co.uk/content/news/telegraph-group-sets-up-online-benefits-portal-for-staff/
I’m with Weeksy.
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?
Not at all. It is a benefit available to many employed people, so I really cannot see why a higher rate tax payer cannot use the scheme to get their bike. It is well known that many people do not use their bike for commuting/work use, if that was cracked down on, it would be many users, not just the higher paid who have to give back their tax benefit.
A problem with capping the limit is that you'd put e-cargo bikes out of range. Yes, they're expensive - but they're also the kinds of bikes that could get many cars off the roads in town for kids and commuting purposes, and the finance aspect is important there than for a perfectly decent basic hybrid.
How many cars it could take off the road and whether it would be worthwhile - obviously I don't have the numbers there.
Is that not the defence
Sorry, I wasn't defending myself, I would have to feel guilty in order for that.
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?
Pathetic. Personal insults.
Sorry if I offended your sensibilities, but I struggle with people with your approach to life. People who have a fundamental misunderstanding that we pay tax on the basis of what we can afford. That paying more than someone else does not entitle us to a little extra. In fact - it doesn't automatically entitle us to the same....just because we 'paid' for it.
Take your logic to its logical conclusion - does a high rate tax payer get to jump to the front of the queue at A&E? They paid for it after all. Should the doctor look a bit more favourably on someone who's paid in a ton of tax in the past when applying for disability allowance? After all, it's only 'a little bit back'.
My objections to this whole scenario come in two parts - one is in the scheme itself and the other is the approach some have to it - including you seemingly. I think a scheme that allows very high value bikes to be bought as a salary sacrifice and where those who earn more save a higher percentage is fundamentally incompatible and wasteful with encouraging large numbers of people to cycle for utility. Then for people to buy very high value bikes (or if being blunt, toys) they have zero intent on using for the purpose the scheme is intended to save a significant amount of tax and then to say......well, I pay more than most so it's only fair.
Yes, the money involved is barely peanuts, yes the system is ripe for abuse, yes it's all bikes and fitness is good. And yes high rate tax players might well plough their salary into others scheme to avoid tax anyway. But.....a world view and an air of entitlement that those who pay more should expect more or 'get a little bit back' is reprehensible.
Take your logic to its logical conclusion - does a high rate tax payer get to jump to the front of the queue at A&E? They paid for it after all. Should the doctor look a bit more favourably on someone who's paid in a ton of tax in the past when applying for disability allowance? After all, it's only 'a little bit back'.
No, they should be treated equally.
Argument done....
Another aspect to salary sacrifice bikes (and cars) is that it can lead to a bigger market for second hand bikes (and cars) for people who can't, or don't want to buy new
I bought a new bike on c2w last year ( I do ride to work when possible) and I sold my old bike to a young lad, who now mountain bikes regularly on my old bike. I sold it at a knock down price, since I was getting a 'bargain' myself, and young John now has a decent bike (that wouldn't have been available to him if I didn't get a new bike through c2w)
Same with cars. I'd never leased a car before but got one on lease through salary sacrifice last year. Before this I had owned my previous electric car for 4 years and was planning to keep it for many more years. I sold that car when the lease one arrived, so someone now has a new (to them) electric car that wouldn't have been for sale of it wasn't for my tax 'avoidance'.
Both c2w and salary sacrifice car schemes can also benefit people looking for a second hand bargain (although I appreciate some cyclists seem to stockpile bikes in their garage, so won't sell their old bike)
that we pay tax on the basis of what we can afford
Nonsense. We pay tax based on what politicians think the electorate can bear whilst retaining reelection prospects. Hence the ridiculous 60% marginal tax rate and loss of childcare for those MAMILs. The top 1% pay 30% of all income tax. If they can mitigate some of that loss of childcare and silly tax by salary sacrifice for a bike (or pension) then they should. The marginal rates for those Telegraph MAMILs are counter productive and reduce productivity overall. Riding a nice bike might up that productivity. And if they ride it to work that extra shift, better still!
Another aspect to salary sacrifice bikes (and cars) is that it can lead to a bigger market for second hand bikes (and cars) for people who can't, or don't want to buy new
That's a nice idea although I'm not entirely sure its true. My gut feel is it keeps new prices high (who needs competition when you can get a 40% discount!), which consequently probably bumps up second hand prices.
Hence the ridiculous 60% marginal tax rate and loss of childcare for those MAMILs. The top 1% pay 30% of all income tax.Child benefit "inequality" is a farce, but not because it might appear to be a 60% marginal rate (its not), but because it taxes households with one high earner differently from households with two medium incomes earning even more money. In fact the salary sacrifice schemes exacerbate that - the most comfortably off can afford to salary sacrifice into cars/bikes/pensions to keep their taxable income down and get child benefit but one high earner with a big mortgage may not have the same luxury. It would have been far more sensible to have made child benefit taxable income.
Even if that means bending or breaking the rules by buying bikes they do not intend to mostly use for commuting? Why should such tax evasion be possible for you but not for me, when by being 100% home based I actually have a bigger congestion/carbon benefit for society than someone who rides to work 1 day a week?If they can mitigate some of that loss of childcare and silly tax by salary sacrifice for a bike (or pension) then they should.
reduce productivity overall.
intuitively that makes sense - but I don't think that has actually been proven - especially in a world where pensions can offset it.
Child benefit "inequality" is a farce, but not because it might appear to be a 60% marginal rate
That's not the 60% Tired was talking about. That comes from the graduated loss of your personal tax free allowance when you hit £100k meaning the next 12.5k is taxed at an effective rate of 60%
Anyone taking up the scheme in this situation would get an even bigger discount.
It’s not tax evasion. Earn 105k and you will lose 2.5k of personal allowance. Put that 5k in a bike to work scheme, or pension, then you will AVOID the loss of personal allowance. And you will still qualify for child care credits. There is evidence that this is hitting productivity at this marginal rate a new bike might make it a bit easier!
https://www.ft.com/content/40f3b683-9853-4d86-91b5-19b23fdcf554 Might be behind a paywall, but basically almost a million people will be hit soon.
when you hit £100k meaning the next 12.5k is taxed at an effective rate of 60%
Would rather see that effective rate of 60% apply to everything above £100K.
Anyway, as regards this thread in general... people should be careful with any applause for an "unfair tax break for cyclists" agenda... because if Cycletowork is removed, it won't be replaced by a new fairer tax incentive to get people cycling... and it'll be another loss for cycling in the UK in general.
It’s not tax evasion. Earn 105k and you will lose 2.5k of personal allowance. Put that 5k in a bike to work scheme, or pension, then you will AVOID the loss of personal allowance. And you will still qualify for child care credits. There is evidence that this is hitting productivity at this marginal rate a new bike might make it a bit easier!https://www.ft.com/content/40f3b683-9853-4d86-91b5-19b23fdcf554 Might be behind a paywall, but basically almost a million people will be hit soon.
ah I wasn’t aware that >100k you couldn’t get childcare vouchers. Looks like it’s a similar craziness to child benefit though? Two parents each earning £60k - get child benefit and can get child care vouchers. One parent earning £100k gets neither? Now don’t get me wrong I don’t think the children of £100k earners are off to a bad start in life but there is a weird anomaly probably because it’s just too hard.
I can’t read the article - but are there really 1M people affected by this? That would require about 2% of all UK adults - even if there were that many £100K earners surely a lot of them don’t have children of the relevant age.
634k pay the 60% now and it will be over 1mn by 2028 due to fiscal drag fixing allowances, and wage inflation. Thats a lot of people looking for a new tax-free bike (or pension, or childcare, or holiday). These cliff edges make perverse tax decisions, including the option of working less (and hence rising more).
The percentage of those 100k earners spending money via C2W (when lots of big companies still cap it at 1k) to get under that threshold compared to putting it into a pension will be minuscule
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies who lean more into suitable bikes here, so I’d be surprised if it went.
(I’ve never used it as I’d rather shop a bargain without the hassle of it)
Errr
Private Eye often has fun with what the right wing rags have on the front page vs what the company does. The current theme is the ranting about "diversity" vs their job adverts/training courses.
Must be quite tricky writing a rant and then going into a training session.
Would rather see that effective rate of 60% apply to everything above £100K.
It's easy to look at people earning £100k and say the government should tax them at huge rates, however there are consequences.
Many people on such pay grades are doing specialist roles and they can't be easily replaced. Increase the tax burden, and how will you feel when you can't see your GP as they won't do any overtime as it isn't worthwhile after tax, or you can't see a consultant as they went part-time as it was tax efficient, or perhaps they took very early retirement as it wasn't worth continuing to work.
Be careful what you wish for!
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies
There is a lot of supposition on this thread. C2W would be a phenomenally expensive way to subsidise a few LBSs (that all moan about how much the providers charge them and how little money they make on the scheme).
In regards to the £100k childcare thing. Yes £100k is a lot of money to earn, but to put it in perspective, when we had kids (twins), my wife went back to work pretty quickly (post natal depression and recommended to go back by my doctors) and I became a full time stay at home dad and just did one paramedic shift a week. This meant that I learnt about £10-12k a year while my wife brought home £105k. This meant we lost our childcare credits (system was a bit different 5 years ago), but our friends with a higher combined income (2 x £60k, and one couple earning £90k each) kept theirs. Was it fair? Not really and did we grumble about it? Yep. Personally I think it should be a combined household income rather than just if 1 parent earns over £100k.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
That will be the legacy of those abusing the current system. This is why we can't have nice things. Except the rich won't care. They'll just find another way to avoid paying tax
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies
There is a lot of supposition on this thread. C2W would be a phenomenally expensive way to subsidise a few LBSs (that all moan about how much the providers charge them and how little money they make on the scheme).
for sure, and I have no interest in this so I’m not a defender of the scheme, which has flaws. But for some shops the last two years they’ve no doubt suffered the charges for the provider, but otherwise not had to discount bikes that have sat with no interest due to the general fall in demand and over stocks
They won’t crack down on cycle schemes for the than rich, they’ll just get rid of it completely and screw everyone over.
That will be the legacy of those abusing the current system. This is why we can't have nice things. Except the rich won't care. They'll just find another way to avoid paying tax
Apart from a few frothers on here though, does anybody really give a shit?
Governments usually screw over the poor, rather the well off, so I can't see them taking it away any time soon....
It's a scheme for those with sharp elbows.
Its wide open to abuse and doesn't seem to have even kept the LBS s from closing.
Scrap it and spend the money on road safety for cyclists and pedestrians.
It might also he worth tackling bike theft?
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
So one other frother then....
When I used the cycle to work scheme I had just started work in a call centre for a large UK company with an entry level wage to match. The scheme allowed me to buy a road bike up to £1,111 which I couldn't have purchased without the scheme as lived pay packet to pay packet, I then used the bike to commute well over 50% of the guidance. I still have the road bike now over 10 years later. Lots of colleagues in the same situation did the same too, I think the C2W scheme like everything is spoilt by a few bad apples but on the hole was good.
This thread has reminded me of the scheme and I might now replace the last road bike I had from it and I WFH so achieving over 50% commute shouldn't be an issue...
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies who lean more into suitable bikes here, so I’d be surprised if it went.
(I’ve never used it as I’d rather shop a bargain without the hassle of it)
Its wide open to abuse and doesn't seem to have even kept the LBS s from closing.
Scrap it and spend the money on road safety for cyclists and pedestrians.
It might also he worth tackling bike theft?
Less is currently spent on cycle infrastructure as a whole than the cycle industry generates in VAT.
That C2W has become complex, and of sufficient value for an entire service industry to grow up around it is a strong indicator that it is broken.
Not sure about that. I wouldn't design the scheme the way it is, but any task that many companies might want to perform will result in a service industry being created to help them. Payroll systems. Bin collections. Etc.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
if C2W were simply abolished, it wouldn't screw everyone over. On one hand, everyone would benefit from the money not being drained from general expenditure (c.35% of which is spent on benefits for the poorest anyway) and on the other it's a small group of people who got big benefits from C2W that would lose out.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
Define rich, earing a certain number or just more than you earn?
Either way, I doubt scrapping it will result in any more income tax being collected. I suspect those who use it to bring their tax burden down will just divert the money into pensions or another salary sacrifice. Bike shops would miss out on some* trade and the treasury would miss the bit of VAT on these additional purchases.
*I know some people think CTW kills bike shops but I disagree and think it does drive additional sales.
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
So one other frother then....
Do you want another spade, you appear to have worn that one out...
In the big scheme of things, I just don't see it as a massive deal. I'm not a high rate tax payer but have cycled to work on and off for the past 20 odd years and have benefitted from using the scheme. I don't think its a great system and I don't think its particularly fair for well off people to get more tax cuts, but as I said before I think it was an environmental scheme originally* and if it's getting people out of cars and onto bikes then it's not really harming anyone.
*I may be wrong about that or maybe i've fallen for the hype....
if it's getting people out of cars and onto bikes then it's not really harming anyone.
it depends on how much it costs the state. Losing £10,000 of tax revenue to get one person out of a car on their commute would be terrible value; losing £10 of tax revenue to do the same thing would be a bargain. We can't just say "well, if it cuts traffic/pollution by any amount then it must be worthwhile".
Define rich, earing a certain number or just more than you earn?
I just chucked the question in that there Googles and got this back:
Income and Wealth Thresholds:
Subjective Definition:
The definition of "rich" can be subjective and varies depending on individual circumstances and aspirations.High Income:
Some surveys suggest that earning around £96,000 to £100,000 per year or more could be considered "rich".Wealthy Individuals:
HMRC defines wealthy individuals as those with incomes of £200,000 or more, or assets equal to or above £2 million in any of the last 3 years.Top 1% Earners:
To be in the top 1% of earners in the UK, you need an annual income of at least £182,000 before taxes.High Net Worth Individuals (HNWIs):
HNWIs are generally defined by their net worth and the liquidity of their assets, with some sources suggesting a net worth between £1 million and £5 million in liquid assets.
Which I found a bit surprising in some ways, personally I don't meet the threshold given for 'Rich' but we're not exactly poor either.
The boundary given for "top 1%" is less than I thought TBH.
But anyway if we're saying "Rich" is £100K+ annual income and "wealthy" is about double that, how many people in those brackets are scoring cheap, Tax efficient bicycles?
Which I found a bit surprising in some ways, personally I don't meet the threshold given for 'Rich' but we're not exactly poor either.
The boundary given for "top 1%" is less than I thought TBH.
But anyway if we're saying "Rich" is £100K+ annual income and "wealthy" is about double that, how many people in those brackets are scoring cheap, Tax efficient bicycles?
That's why I asked the question. It is a bit like people complaining about how long it took to get to work because of all the traffic without realising that they are the traffic.
Similar conversation in the office yesterday about the potential change to the cash ISA allowance that may drop from 20 to 4k in the budget. One of my colleagues says thats good because anybody with 20k a year left over can afford to pay more tax. I suggested with that logic they should just scrap it alltogether as people with any money left can afford to pay more tax. His answer was "thats ridiculous, I pay enough tax as it is and I am not paying any more".
Meanwhile:
The Cycle to Work scheme should be rebranded “Cycle for Health” and opened up to low-income employees, freelance workers, and pensioners, as part of a series of reforms urgently required to tackle inequality and lack of access to active travel, the All-Party Parliamentary Group for Cycling and Walking (APPGCW) has said.
https://road.cc/content/news/mps-call-urgent-reform-cycle-work-scheme-313241
To some extent I can't see the point of promoting cycling unless driver behaviour and attitudes are improved.
To some extent I can't see the point of promoting cycling unless driver behaviour and attitudes are improved.
It's a fair point but I think it quickly becomes a chicken and egg situation. I know a lot of folk who would ride more if there was less traffic, but don't see that they are the traffic they want less of.
Obviously, proper roads policing*, no exception bans at 12 points etc, better infrastructure and proper public/driver information campaigns would be a great situation to help the process, but not likely to happen in the short term
* and cyclists have to accept their share of the responsibility for that.
if it's getting people out of cars and onto bikes then it's not really harming anyone.
it depends on how much it costs the state. Losing £10,000 of tax revenue to get one person out of a car on their commute would be terrible value; losing £10 of tax revenue to do the same thing would be a bargain. We can't just say "well, if it cuts traffic/pollution by any amount then it must be worthwhile".
The question is, how much tax revenue is actually lost through C2W. Is it really 'costing the taxpayer'? I presume without C2W, the total value of bike sales would be much lower.
Employers operating the schemes for themselves seems increasingly rare, I'm sure this isn't what government/HMRC originally intended.
Possibly not originally but the change to the "1k limit" was the government changing their position.
There never was technically a 1k limit but instead an exemption from being FCA registered for providing credit to consumers if you kept it to 1k or less.
Since that comes with overhead it wasnt worth it for the average company although some of those which did have the registration for their business did offer higher limits to employees.
The change was allowing the c2w schemes to be the official providers of the bikes vs the individual companies. They are therefore the ones who are FCA registered and hence can offer higher limits.
Define rich, earing a certain number or just more than you earn?
Don't start that argument.....
Completely ignoring Chapter 1 of Das Capital*, you'd need to be paying ~£23k of tax just to break even with government spending.
And that's cradle to grave, so more like £45k/year during your working life.
*if you don't want to ignore it and still reading. That's not just income tax and VAT, because your manager, CEO, directors, shareholders etc, their work has no value without yours and therefore collectively you should consider that the person on the shop floor earning minimum wage and paying very little tax is actually contributing to the higher-ups tax contributions. And vice versa, just because you're smugly earning >£100k and think it's unfair to be paying a 60% marginal rate, with rare (to the point it can almost always be argued out) exception you only have that earning potential due to the work of others. And therefore comparing the monetary value of a worker is flawed because capitalism puts a value on that workers output unequal to the actual value of their work. And breathe .........
Many people on such pay grades are doing specialist roles and they can't be easily replaced. Increase the tax burden, and how will you feel when you can't see your GP as they won't do any overtime as it isn't worthwhile after tax, or you can't see a consultant as they went part-time as it was tax efficient, or perhaps they took very early retirement as it wasn't worth continuing to work.
Be careful what you wish for!
And then the populations health declines, output reduces, ability to pay Dr's reduces and their value diminishes. See the above point, Dr's only make a lot of money because there's a lot of other people below them in the economic web also producing value. Be careful what you wish for. This isn't a dig at Dr's, it's just pointing out that left unchecked everyone will just try and get one over on everyone else until the whole system collapses.
Prompted by this thread i read up the rules for the scheme. It clearly states that the bike should be used for 50% commuting. I hadn’t realised quite how clear cut the rules are.
"I hadn’t realised quite how clear cut the rules are."
And how pointless. Totally unenforceable. If they think bikes are a good thing and to be encouraged then zero rate them. Just like at the supermarket you pay VAT on booze but not on food.
Why commuting anyway? Someone riding at the weekend is improving their health and possibly costing the NHS less long term.
Just ordered mine. First B2W in 12 years. And it definitely will be used for at least 50% commuting 😇 .
Curiously the salary sacrifice for an electric vehicle (helloooooo Renault 5!) makes no such requirements, handy as the office is in Central London and there is no parking. Renault have a fabulous new salesroom on Oxford St, but I am doing my best to resist. So I'm with @irc, just getting people on bikes is a good reason for salary sacrifice - as per electric cars.
And for mixed mode commuters, only folding e-bikes will be allowed on the tube from April (mine is not an e-bike though)
It clearly states that the bike should be used for 50% commuting. I hadn’t realised quite how clear cut the rules are.
The rule actually states "must" - not "should" it's an instruction, not a suggestion.
not read all posts, but i just took out my 3rd C2W scheme.
First year was a commuter bike, which i do use often... to ride to work.
Second was a T-Type GX transmission for my Raaw.
This year is a T-Type XX transmission for my Chisel FS.
Its a scheme that is available and i can benefit from. 40odd % off bike stuff... yes please!
One of the very very few benefits my work has to offer, so i will take it.
Why commuting anyway? Someone riding at the weekend is improving their health and possibly costing the NHS less long term.
Because commuting is a double whammy.
If you look at it i terms of it's impact on life expectancy 1 hour spent in a car reduces your life expectancy by 20min on top of that hour you just spent being economically inactive. Riding a bike is a net gain of 1 hour, or to misquote the Babylonians "The gods do not deduct from man's allotted span the hours spent cycling".
Someone riding at the weekend might drive somewhere to ride their bike and that just adds to congestion. Especially if you " need" giant 4x4 or van to go cycling.
That and it was covered way back on page 1. You'd have to apply the same logic to all sports goods, from darts to £100 replica football shirts.
You'd have to apply the same logic to all sports goods, from darts to £100 replica football shirts.
Ignoring the fact that bikes are as much 'transport' as 'sporting goods'. Or could be, if only there was a scheme to promote them as such.
Sports shirt and darts don't have tax breaks.
Forgive me if I have missed a post in this drivel.
Does your work offer this? I mean does it know you’re not buying a bike to commute on?
First year was a commuter bike, which i do use often... to ride to work.
Second was a T-Type GX transmission for my Raaw.
This year is a T-Type XX transmission for my Chisel FS.
Its a scheme that is available and i can benefit from. 40odd % off bike stuff... yes please!
One of the very very few benefits my work has to offer, so i will take it.
Curiously the salary sacrifice for an electric vehicle (helloooooo Renault 5!) makes no such requirements
A friend of mine picked his 5 up this week. Had to get it before March 31st to get his £6,000 tax break. Makes CTW bike tax advantages look like a rounding error. And it won't be used to get to work... his ID Buzz Cargo is being used for that (big tax break on that when he got it as well). Both ace vehicles.
Does your work offer this? I mean does it know you’re not buying a bike to commute on?
The only involvement of the employer is approving the voucher request. They have no idea what you are going to spend it on.
I bought a bike, which used to get ridden to work about as much as it got thrashed round the forests before it got reduced to TT duties. Then I bought a coil shock, which is on a bike I now ride to work, occasionally. Then I bought a wheel set, for the same bike. Most recently I bought a set of 38s for a different bike. Not decided on what my next purchase will be; possibly a bike, but more likely T Type for my favourite bike.
I'm a lower rate tax payer, so any saving I can make is extremely helpful.
Why commuting anyway? Someone riding at the weekend is improving their health and possibly costing the NHS less long term.
Well cycling on the weekends is a your own business, sure it's good for your health too, but it's a leisure activity. Cycling as transport for was explicitly what the whole "cycle to work" scheme was seeking to encourage. You might as well ask why you can't have a skiing holiday as an income tax reducing salary sacrifice, it's a healthy activity, but it's entirely your choice and you're not doing it to reduce demand on the NHS, you're doing it for your own enjoyment and gratification.
Subsidising/providing tax breaks for the middle classes weekend toys isn't in the title, or it seems the Ts&Cs that nobody bothers to read. Technically HMRC could go after all the people not in compliance with the 50% commuting rule for what? fraud(?) I doubt they would (currently). It is sort of annoying for the few of us who do play by the rules and choose not to abuse C2W.
Like I said I'm all for it being spending capped, and ideally then policed (as far as is reasonably practicable), that should of course come with a bit on an amnesty I reckon, let people finish of their last little go misusing the scheme, and then that unearned little privilege is quietly withdrawn.
The only involvement of the employer is approving the voucher request.
The question is should they and can they check in many cases? When people were taking the piss too much there was a court case enforcing slightly stricter standards* and given how the current government are announcing crackdowns left, right and centre an obvious candidate is to start demanding c2w is used for, well cycling to work.
Where I work sent out a note about employees checking their eligibility and in theory the company could be held to account for it eg currently I can elect it but as a homeworker with no designated office it wouldnt be unreasonable for me to be ineligible unless I managed to explain otherwise.
For a fair few companies with limited parking an obvious question would be why someone who gets one of those rare spaces is also using c2w.
*for the nerds. c2w is the effective equivalent to a car PCP loan where if you want to keep the car/bike you need to make a final payment which can be fairly substantial. The schemes used to last a year and then the bikes were being given away which, for a 1k bike, was slightly questionable.
Its why now if you read the paperwork the schemes now last up to about 5 years (even if you just pay for 1 year) to make the final payment amount tiny.
NBD! New Bike to Work Bike collected yesterday. And thus far 100% of its journeys have been to or from work. Very pleased with it too. Bought from my favourite real bike shop, Condor Cycles because we need proper bike shops in central London.
NBD! New Bike to Work Bike collected yesterday. And thus far 100% of its journeys have been to or from work. Very pleased with it too. Bought from my favourite real bike shop, Condor Cycles because we need proper bike shops in central London.
I had a gorgeous Condor Fratello in Ferrari Red for a couple of years. Wrote off the frame colliding with a pedestrian as we came out of lockdown.
Its why now if you read the paperwork the schemes now last up to about 5 years (even if you just pay for 1 year) to make the final payment amount tiny.
Also worth checking how much the payment is.
Halfords is free, Cyclescheme is 7%.
Which surprised me, but I guess explains a bit why Cyclescheme charges retailers less, and offsets the fact that a lot of retailers charge you more to use the Halfords vouchers.
And I'm not sure why they differ, HMRC say it's zero as long as the hire agreement is for 6 years. I guess they just want another slice of the pie.
See how much a used five year old Brompton is selling for. I paid £600 for a new one in 2002. I could have sold it for the same now. My last C2W ran five years and I paid nothing for a dura ace Defy Advanced SL. The latest C2W Brompton was 7x that first one. It’ll be worth more than £316 in five year time!
Halfords is free
This is who our work uses to manage the scheme. Previously it was Cyclescheme where there was a final 7% of value payment. The Cyclescheme 'hire' period was 4 years in total; Halfords scheme is 5 years total.
See how much a used five year old Brompton is selling for. I paid £600 for a new one in 2002. I could have sold it for the same now. My last C2W ran five years and I paid nothing for a dura ace Defy Advanced SL. The latest C2W Brompton was 7x that first one. It’ll be worth more than £316 in five year time!
I wasn't saying that the HMRC guidance is grounded in reality. If they were it'd be ~50% after year 1 and no one would take part in the scheme.
I'm just pointing out that some schemes are effectively charging you extra. That's them making an extra profit despite the intent of the schemes being that the value of the bike was divided by 12 to determine the hire cost. Nothing to do with HMRC. In theory the scheme could demand the bike back without a choice and sell it on ebay to determine the market value.
Halfords let you run down the value to zero (6 years), cyclescheme offer you 7%, (4 years).
Day 1:
You get a £1000 bike
The bike shop gets ~£900 depending on the schemes admin charge and the customer has no visibility of this unless the shop passes it on to them.
Day 31/61/92/etc:
The scheme gets £83.33
Day 365:
The scheme now has £1000, including the original admin charge
Cyclescheme then ask you for another £70 (which is taxed)
Halfords ask for nothing
Legally (and I'd suggest morally) Cyclescheme could charge you zero as well as they've already been paid the value of the bike plus a profit margin.
I'm just pointing it out because it was something I wasn't aware of until I did some digging that although both schemes are effectively charging ~15% admin fees, Halfords charge it to the shop on day 1 and the customer just just paying for the bike tax-free. Cyclescheme are more expensive to the consumer.
Either Cyclescheme or GCI charge a quid at the end. Can’t remember which as we have both running in our house for the wife and I (her’s will have all the nicest bits stolen from mine as per usual).
Either Cyclescheme or GCI charge a quid at the end. Can’t remember which as we have both running in our house for the wife and I (her’s will have all the nicest bits stolen from mine as per usual).
It's GCI. We use CycleScam at work and they charge 7%. I suggested they change provider but it's managed by an outside company who provide other "benefits" like the STW ones.
I was OK even if Cyclescheme charged a bit as Balfes allowed me to buy a bike that was already 50% off and then with C2W applied on top for no cost... made it a no-brainer.
I've never used a bike scheme to buy a bike, even though I bought four during my spell as a postie, as a 3-day PTer (22.5hrs) I wasn't that sure I would qualify when my gross pay was roughly £250 in 2010 rising to ~£300 per week due to the "minimum wage" clause (based off 37.5hrs of min wage?). The RM scheme was also rubbish in my early days, limit of £500 bike iirc.
Didn't some bike schemes begin officially allowing the purchase of parts in recent years, instead of buying a bike?
Condor said I could buy whatever I wanted and top up as needed. Somehow a 10k track bike would probably fall the 50% journey to work test though! And unlike an amateur team I know, I can't put it through the company books as a tax expense 🙁
We use CycleScam at work and they charge 7%. I suggested they change provider but it's managed by an outside company who provide other "benefits" like the STW ones.
Those outside provider types are always a total scam. They approach businesses offering to manage all the HR matters, take all that burdensome admin off the hands of the poor overworked HR folk leaving them free to conduct interviews and do recruitment etc.
Then they come up with a list of "perks" like 1.5% off at CenterParcs if you stay Tuesday to Thursday in February or 5% off at Boots when you spend £250 or more in one transaction. And they'll run the C2W with a series of limitations on price, has to be bought in Halfords, has to be used 4x a week for riding to work...
The one at my previous place was absolutely terrible. I tried to get it changed but after a lot of back and forth, HR eventually said they'd increase the limit from £1000 to £1500. So still useless then. 🙄
"The percentage of those 100k earners spending money via C2W (when lots of big companies still cap it at 1k) to get under that threshold compared to putting it into a pension will be minuscule"
Just for balance, the majority of the people I know who earn over 100k (large corporate so a fair number of people) have done this and those that haven't salary sacrifice for a car. They also chuck a lot of money into pensions. Most of them would point to the money they lose from child care etc by going over 100k as being unfair.
"The percentage of those 100k earners spending money via C2W (when lots of big companies still cap it at 1k) to get under that threshold compared to putting it into a pension will be minuscule"
Just for balance, the majority of the people I know who earn over 100k (large corporate so a fair number of people) have done this and those that haven't salary sacrifice for a car. They also chuck a lot of money into pensions. Most of them would point to the money they lose from child care etc by going over 100k as being unfair.
so the 1k on cycle to work is probably very small compared to the pension relief. One has tangible benefits for pollution, health etc if used for commute, earning 120k and putting 20k into a pension doesn’t.
I get it’s abused and that’s wrong, I’ve never used it myself as the residual payment doesn’t make sense to me nor have I had an employer who offered it, but to me it’s more a point scoring anti cyclist news story then anything effective for saving tax for the gov