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I've been a hybrid worker (and now fully remote) for 20 years so I always felt when the schemes launched as "cycle to work" I didn't feel I fully qualified, and neither did my previous employers. But my current employer operates with Cyclescheme and their narrative doesn't reference cycling "to work". It seems the narrative now is if it helps our employees stay physically and mentally fit for work, then great. Which I think is a more appropriate view of it, especially as most of my employer's workplaces offer no secure cycle storage or shower facilities. Is the national narrative now along these lines do you think?
It’s now (always was really)simply a tax avoidance scheme that gets better, the more you earn. Now there’s no limit (save for what your company is willing to risk) to how good it can be.
The ‘narrative’ rather depends on how that sits with you. No one else cares.
I agree it’s a more appropriate vow of it. Ours still states it should be used more than 50ish% for journeys to work but really nobody cares whatsoever. Maybe as I work for a large company it’s different, but I’d be surprised if any company really scrutinises employees to check the rules are being followed on usage.
to check the rules are being followed on usage.
I don’t think there are any now, not that could land you in any sort of trouble. Not totally sure there ever really were.
It doesn't matter what you use the bike for. No one cares, no one checks.
My old c2w bike has never ventured into the office. And was a full suspension trail bike.
My new job will be fully WFH but our cycle scheme is utter shite and not worth bothering with
Just for the record they don’t necessarily get better the more you earn.
Just for the record they don’t necessarily get better the more you earn.
eh?
Earn minimum wage, get nothing.
Earn enough to pay lower rate tax ~20% saved, as long as you don’t take yourself below minimum wage, after deduction.
Earn enough to pay higher rate tax ~40% saved (depending where your deductions take you to)
Plus more if you take into account any benefits you may retain by not moving into a higher band/salary.
Edit, plus save NI
That’s it, isn’t it? What situation is there where earning more makes it a worse proposition?
End of life residuals rather dilutes benefit too, and the EoL tax payment linked to tax band so higher earners pay more.
Not clear if that’s an HMRC rule change or scheme operator. Previously could extend the hire period and EoL value a nominal sum. Now after 18 months it’s circa 25% residual. Which would be taxed at 40% for higher earners.
So £2k bike x 25% EoL residual x 40% = £200 tax bill at end. That knocking 10% off benefit you make over the initial period. Given most schemes also include a somewhat hidden finance charge, I question how much saving you really make, at whatever tax band.
IMO the schemes are never as transparent as could be at outset on the finance cost and EoL position. Other than getting to ‘pay up’ over months, probably sale deals and buying outright the best saving you can make.
My view anyway.
plus you generally have to buy bike at full RRP, depending on the bike, certainly pre covid healthy discounts used to be possible. I've not used the scheme for a long time because it worked out cheaper to buy direct in the sales.
I've bought two bikes and never had to pay a fee at the end, just take the extended hire period with no fee. One was a cheap hybrid where I probably saved £100. The second was a £3300 bike which cost me less than £2k (additional 15% discount through cycle solutions), so definitely a massive saving I couldn't have got elsewhere. Lower rate taxpayer.
I just ordered my voucher last week after a lot of research/phone calls about our scheme (Halfords Cycle2Work).
What I have found out contradicts a bit of the above....
- You don't need to buy a full RRP bike, in fact you can even buy an ex-demo.
- Being in a higher tax bracket most definitely saves you more off the cost of the bike.
- You effectively pay nothing at the end. Our scheme is a 12 month one - you pay the full price of the bike over 12 months through salary sacrifice, less tax (40%) and NI (1%). At the end of the 12 months, Halfords offer three options. One of which is an extended hire agreement for another 3 years, at NO COST, at which point HMRC deem the residual value of the bike to be negligible and you pay 0 tax on in after the extended period.
Upshot is I get a £1500 bike for £796.50 (our org gives you a 10% discount up front). And no one gives a monkeys what you actually use it for.
I too took the extended hire period to reduce residuals. HMRC correctly sussed that three year old Bromptons are worth more than £10, and applied a hefty residual value. This fed down to all bikes based on initial price. I haven’t had one for years now as I’ve not seen the value compared with good used bikes. Last one was a £3500 road bike that I did ride to work on nice days. I think the eventual payment was £100 after the maximums period. Might look at another Brompton this year as the price is always RRP and the used values are silly.
This is my Cycle to work bike
Definitely might ride it to work one day.
+1 on often buying without the scheme opens up all sorts of deals and discounts. We did it once and felt it not really worth it.
We have subsequently bought three brand new bikes in sales and three second hand bikes since then, and I doubt we would bother again.
plus you generally have to buy bike at full RRP, depending on the bike, certainly pre covid healthy discounts used to be possible. I’ve not used the scheme for a long time because it worked out cheaper to buy direct in the sales.
No you dont necessarily. Just ask to 'pay' the fee. For example if a bike shop is selling a £4000 bike for £3000, but no cycle to work, if you're on cycle scheme just offer them £3255 for the bike. I am willing to bet they're going to say yes.
+1 on often buying without the scheme opens up all sorts of deals and discounts. We did it once and felt it not really worth it.
We have subsequently bought three brand new bikes in sales and three second hand bikes since then, and I doubt we would bother again.
Depends what you're after really. If you want something specific and its not on sale then C2W makes a lot of sense. If you're just looking for a bike, then yeah, buy what ever is the best offer.
I bought a Cotic Solaris frame, Salsa carbon fork and Hope headset, also a frame bag and spar mech hanger for just over £1600, I'll save aout £550 after a year. I did look around to see if there was anything else I wanted that was on offer but I wanted the Cotic so it made snse to use the C2W scheme.
I do think it's a load of shite though how the poor don't get a benifit but the better off you are the more you save. Totally wrong way round IMO.
I do think it’s a load of shite though how the poor don’t get a benifit but the better off you are the more you save. Totally wrong way round IMO.
This I agree with.
I work from home and have a bike purchased on C2W, I wasn't asked or told about any requirement to use it for commuting.
I work from home and have a bike purchased on C2W, I wasn’t asked or told about any requirement to use it for commuting.
What did you think C2W stood for?
I finished paying for a very nice frame apart from the 'extended hire period' bullshit, immediately ordered an Ebike on the same scheme, as soon as thats paid off I'll get something else.
I bought my commuter in the sales.
Its a tax fiddle I'm happy to use, as I'm not self employed or a 'company director' or a politician its the only thing I'm aware of that I can take full advantage of financially and still be within the rules.
I said "generally" you pay RRP not you have to - it depends on the brand / bike shop.
If you want a scott spark for instance, like I did, it made sense to wait for when westbrook used to do its annual discounts to shift last seasons stock. The discount was way more than C2W and there was no faff about hiring bollox.
However when I wanted something generic, a boardman TT, I was able to use halfords, and they did also sell it at the (slightly discounted) price plus C2W. So it worked out better C2W.
And yes both bikes have / were cycled to work, but no one checks, and how on earth could it be
They should just remove VAT on bikes.
You can also buy parts and equipment on the scheme (least you could pre covid) but that also was a bloody faff and probably only worth it for a big purchase like wheels / groupset / forks. Again it was cheaper to buy a 105 groupset from merlin direct when I looked into it. No idea how residuals are worked out if you spend a significant amount on parts and stuff like clothing (very easy to spend £500 just on clothing if you are starting out)
What did you think C2W stood for?
Ours is just called CycleScheme..
But I agree that it's a tax fiddle that benefits the most wealthy, the most often and that the system should be inverted.
But, after just sneaking into the 40% band last year, I used it for the first time. £2400 Titus El Viajero, reduced to £1525 (including shipping) and bought on the CS at £84/m for 18m of which, after tax fiddles, only costs me £41/m over 18m. That's a Ti Hardtail for £740 + the final fee of 3-7% (I don't know which yet) No fee for use at PX...That's a significant saving. I've commuted on it when going to Ashton court after work, which makes for a 90km ride...my knees usually hurt quite badly after this!
I do wonder if some of the inflation we see in bike prices is driven by schemes like this both in the US and the UK?
answering my own question:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21667a
In calculating the original price of the cycle, include safety equipment fitted to the cycle (such as lights and bells) but not safety equipment which would be worn by the cyclist (such as helmets or reflective clothing). Where used regularly for commuting and/or travel between workplaces, safety equipment worn by the cyclist is likely to have a market value that is lower than the table percentages for a cycle and cycle-based safety equipment.
well, thats clear then
what happens if you bought a groupset, wheels, tyres, jacket, helmet, shoes etc... but no bike...
also reference to the 'condition' of the bike in the final valuation, seems if you keep it nicely maintained it could cost you more in the final valuation!!!
Just to add my two pence worth, although DT78 and some others don't appear to be listening 😉
You can buy reduced bikes. 'Someone very close to me' paid around £1,850 for a Stumpie Expert Carbon with an RRP of £5,200. They also got BC discount on another C2W bike. And 10% off a halfords bike. Actually, scratch that, they got 10% off and a free upgrade to the next model up from Halfords. The only time they didn't get a discount was at the height of CovidBikeShortage where the shop added 10% back on to the various accessories that were reduced in the sale. (The bike stayed at RRP)
There are a few companies ( or at least were during covid, that will add a charge onto sale bikes to cover the C2W fee, but they are rare and will get rarer as overstock kicks in. And you still pay a helluva lot less than sale price overall.
You don't pay any fee at the end unless you totally screw up. The most I paid was £0.01 to extend the hire agreement with Evans for another few years.
And yes, the scheme is an abomination in its current form and should be scrapped.
Out of interest @DT78, how many times have you used C2W scheme?
I do think it’s a load of shite though how the poor don’t get a benifit but the better off you are the more you save. Totally wrong way round IMO.
totally agree.. even though i benefited from the higher tax saving
A lot of people I work with have bought bikes on the cycle to work scheme and cycled to work on them.
An MTB forum and not really representative of people using the cycle to work scheme.
It's no different to ISAs or Pensions, people with no money can't benefit, those with money can.
The last 2 places I've worked at, the scheme has been terrible - administered by an outside agency on behalf of HR within a wider package of "employee benefits". They send round emails inviting you to apply for vouchers for 1% off a CenterParcs holiday for 4 if taken anytime except half term or school holidays or 0.5% cashback on shopping from Boots when you spend £200 or more.
Utter bollocks.
Sadly they also manage the C2W scheme and put in all manner of restrictive clauses. The current place insists that you must use the bike 3 days a week to commute to work although how the hell they check this I have no idea. but the limit is £2000 and you can only buy from Halfords so it's pretty pointless anyway.
I tried all sorts at my previous place to get a different scheme or to broaden the range of shops you could buy from and all that happened was they eventually put the limit from £1000 up to £3000.
There's no doubt that some people do very nicely out of them.
Sort of related, when I worked in a bike shop, we offered Interest Free Credit and there was a long form to fill in, you then had to call the company and run through it all over the phone. Nightmare process. The people who really needed it, the desperate ones trying to buy a £500 commuter - invariably their credit rating was poor and they couldn't get it. The people buying a £4000 bike were almost always the sort that could just buy it anyway but they max out all their credit options and because they paid it back, their credit was good and they'd be in the shop buying another bike on another credit agreement a year later.
+ the final fee of 3-7% (I don’t know which yet)
Is there actually a way to tell if it's 3 or 7%?
Cyclescheme says:
Own it later - You pay a small refundable deposit (either 3% or 7% of your certificate value) and continue to use the equipment for 3 years.
3 %or 7% must be based on something??
It’s no different to ISAs or Pensions, people with no money can’t benefit, those with money can.
True - but if we are looking at cycling being a cheap commuting and utility option for folk, then the poorer in society have most to gain from it. Climate change is a growing a social justice issue.
I get that there will always be bigger houses, savings, higher salaries - but so much of what we create around schemes like this is invented by middle class, 'wealthy' people...
Can I just point out that if you think that the C2W scheme is unjust & should be targeted at lower income earners... Nobody is forcing you to use it. Just buy a bike & pay your tax as normal, rather than actively choosing to use the scheme & thereby reducing the government's income.
I believe that this is sometimes known as hypocrisy.
I don’t. None of the uber-niche manufacturers accept the vouchers 🤷
I'm currently 6 months into the '12 month hire' period for my DOLAN Gravel bike - it won't be seeing the office as its 30 miles away with the Dartford crossing in-between.
As soon as this is paid up (July) i'll be doing the scheme again to replace my aging Giant Defy road bike.
Cycling is good for my mental and physical health - that's justification enough for me to use it.
I agree its a bit unfair that those of us who pay 40% tax benefit more than those who arguable actually need the scheme, but TBH it doesn't keep me awake at night.
I am listening, I'm just not agreeing....
I have used C2W 3 times, once in the first few years (2009?) it started to buy a charge duster, which has done literally thousands of trips to work). Once for a boardman TT (2018?) where I did get discount on C2W and has been used for about half its mileage to go to work (and then train after), and once for a small amount of parts (2020?) which was a massive ball ache, halfords refused to do it and take the voucher and I eventually had to use tredz and buy slightly different stuff which would have been cheaper direct to merlin.
I have bought many more bikes not on C2W considering you can use it annually. Once you run the numbers it doesn't always work out cheaper depending what you are after. So it is not the no brainer saving you lots of money scheme, with strings attached, it may seem at first glance. Always check what discounts you can get.
Our C2W scheme is the halfords one, which I think is less popular with bike shops as it charges a larger margin, hence they don't want to do discounted bikes on it, or they charge something like 10% plus an admin fee, so unless heavily discounted, its not worth it when you add in the final valuation fee.
In summary - check around, and run the numbers you maybe better off not using C2W
The 3 and 7% is based on the value of the bike, although in my experience it was the value of the vouncher not the bike, though it would seem I could have argued the toss. See the link I put up there in an earlier post
Entirely your choice. HMRC staff are expected to do tbe majority of the bikes usage cycling to work, but we haven't got time to check our staff, let alone anyone else's.
For those on a higher rate of tax, the schemes offer a significant saving. If you receive child benefit and earn slightly over 50k, you could potential get your purchase for next nothing. I picked up a discounted MT500 Waterproof with my C2W scheme.
It does seem like an unfair tax break that benefits middle earners. There's a certain amount of hassle sorting out the voucher and your employers scheme might not be accepted at your local/preferred bike shop. There is also the potential problem of being half way through paying for your 4k bike and changing jobs.
The current place insists that you must use the bike 3 days a week to commute to work although how the hell they check this I have no idea. but the limit is £2000 and you can only buy from Halfords so it’s pretty pointless anyway.
@crazylegs the halfords vouchers can be used in a variety of lbs, and also at tredz, and you don't have to buy bikes - so you can buy a new fork/groupset from tredz and use the vouchers for that
C2W - small middle class tax dodge.
Wider issue with all salary sacrifice schemes is they provide more tax saving the more you earn, yet those on low/min wage can be excluded if the sacrifice takes them below the legal min.
I managed to get a scheme implemented year back at a large organization and we developed an in house scheme to solve the low pay issue - shame the couldn't sort the low pay issue but hey...
Can I just point out that if you think that the C2W scheme is unjust & should be targeted at lower income earners… Nobody is forcing you to use it. Just buy a bike & pay your tax as normal, rather than actively choosing to use the scheme & thereby reducing the government’s income.
I believe that this is sometimes known as hypocrisy.
Very simplistic take on the subject.
It is the stated intention of the current chancellor to use any spare money for tax cuts, which obviously only benefit those actually paying tax (as does saving money via pensions, ISAs, CW schemes) etc. So, increasing tax take isn't going to increase the money going to those the least well off, nor increase their access to bikes.
@crazylegs the halfords vouchers can be used in a variety of lbs, and also at tredz, and you don’t have to buy bikes – so you can buy a new fork/groupset from tredz and use the vouchers for that
Not on ours - you have to specify the exact bike you're buying, it's specifically Halfords only and it's an absolute £2000 limit. As I said, it's an external agency who want to do the bare minimum possible. As they're not even internal HR, they have no direct attachment to any of the staff, they couldn't care less about our wellbeing so long as they earn their commission off voucher sales and running the "employee benefits" portal. My workplace pays them to deliver this service and they're getting the same off countless dozens of other employers who've outsourced all this employee perks thing to them.
C2W – small middle class tax dodge.
More than seven in ten participants are basic rate taxpayers, and a third of scheme users are over fifty years old. Six in ten employers offering the scheme are SMEs (and employ less than 250 people).
That's from the Cycle to Work Alliance, made up of Cycle Scheme, Cycle Solutions, Evans Cycles and Halfords. It's also in line with what I found when I worked for a C2W company.
I still think you are meant to ride it to work.
I have never used it because I'm not the person that tax discounts should be applied to. You can't complain about millionaires dodging tax then dodge tax yourself. You might say that it's an allowed tax efficiency, but there are two issues there:
1. It is cycle to work, not buy a nice fancy bike for cheap. It's a great idea for its intended purpose, not so much in my view for what it gets used for by the likes of us.
2. Should middle class people be able to buy expensive sporting equipment tax free? If this were anything else, if the government were handing out tax breaks for golf clubs, you'd be up in arms about it I'm sure.
More than seven in ten participants are basic rate taxpayers, and a third of scheme users are over fifty years old. Six in ten employers offering the scheme are SMEs (and employ less than 250 people).
That’s from the Cycle to Work Alliance, made up of Cycle Scheme, Cycle Solutions, Evans Cycles and Halfords. It’s also in line with what I found when I worked for a C2W company.
Don't come on here with your facts and actual information, the good people of STW were busy sharpening the pitchforks 😉
More than seven in ten participants are basic rate taxpayers
Which means 3 in 10 are high rate tax payers. So, as only 16.2% of the UK workforce are currently high rate tax payers that means high rate tax payers are roughly twice as likely as basic rate tax payers to take advantage of the scheme.
Then.....when you factor in the 40% saving instead of the 25% saving that 30% of users make and......(this is a bit of a stretch I admit as back up by supposition rather than statistics) high rate tax payers buy more expensive C2W bikes than basic rate tax payers and the possible tax income stream to government coffers lost will be as much if not more from the high rate participants than the basic rate participants. i.e. the 16.2% of the workforce gain more than the 83.8%.
does any of these thing above being basic rate tax payer, or working for an SME stop someone being middle class? (if there is such a thing anyway) - it was bit of a throwaway comment btw..
Did the CtWA gives any stats on usage of bikes for the purposes of getting to work btw? from my personally experience would seem that quite a few are being used for commuting frequently, but also there are quite a lot of bikes on the scheme where the intention is clearly to never use for getting to work.
for basic rate tax payers, you are often better off buying a bike in the sale, and if not able to pay in once go, to do via a 0% credit card deal etc - especially for lower priced 'normal bikes' - eg someone buy something like a Kona Dew etc.
All those calling it a middle class tax dodge, is it any worse than pension, company car schemes, private medical or anything else? Car Schemes offer a far greater benefit to the employee the C2W.
no it is clearly no worse, but they all has the same thing in common in that they tend to offer more advantage the more you earn and the more you earn the more likely you have to take up as many / all of those options.
If bikes are truly used for get to work then not a dodge, but look at how many MTB only companies offer c2w as a means of buying a bike, pretty sure there is a very limited group of people commuting on full enduro rigs..
quick examples:
Cyclescheme at Privateer – Privateer Bikes
Cycle To Work | Bird MTB // Born in Swinley, Built in the UK.
comparing use of C2W scheme, a legit scheme to save a few hundred ££ (depending on the scenario, as I said it may not save you anything and add a bunch of strings....) for a the majority to a certain person who was in charge of HMRC briefly doing something dodgy to save millions of tax due when already a multi millionaire is a little bit of a stretch.
Much more is 'saved' by individuals pilling money into their pensions to reduce their tax burden. C2W doesn't even come close. I'd love to see some real stats about the average bike bought on the scheme (mine were £1k, back when £1k got you a decent bike) and £800. My expensive bikes were bought direct from LBS at end of season as the discounts were greater, and for a good chunk of time the limit was £1k and coundn't be topped up....
All those calling it a middle class tax dodge, is it any worse than pension, company car schemes, private medical or anything else? Car Schemes offer a far greater benefit to the employee the C2W.
Compared to Pensions and ISAs the sums are minuscule.
comparing use of C2W scheme, a legit scheme to save a few hundred ££ (depending on the scenario, as I said it may not save you anything and add a bunch of strings….) for a the majority to a certain person who was in charge of HMRC briefly doing something dodgy to save millions of tax due when already a multi millionaire is a little bit of a stretch.
They are completely different, one is a legitimate HMRC scheme (who no obligation to ride the bike to work), the other was fined £5m, by HMRC, for failing to declare £30m he happened to have forgotten about. I guess in theory he could have been prosecuted for it, but it's cheaper all round if he just pays the fine.
Anyone got an easy to implement model for salary sacrifice schemes that ensures the benefits are equal across tax bands?
government will squander our tax money regardless. may as well have a shiny new bike..
well... ummm... i used the scheme (the halfords/tredz one). bike was £2600, reduced to £2300. I am £130 a month less off after tax than before the scheme. By my calculations i am paying just under £1600 for it.
I ride it to work as much as possible. If i do 5 days a week, thats about 130 miles. Saves me a bunch on petrol. And is good for my mental and physical health. Plus i love riding bikes.
Well, thats my input... let the squabbling continue.
@blackflag do you mean in the existing system or an idea for how to do it better?
existing system, if you try to "top up" or somehow give those in the lower tax band the same as those in higher you MAY risk them being stung for a BIK. Maybe the chap who posted above can say how his company did it avoiding the risk of BIK
my idea would be just remove VAT from bikes, then everyone gets the same discount. A hell of a lot simplier to implement, no middle men snaffling admin fees for doing very little. spend more, save more irrespective of your income.
I am listening, I’m just not agreeing….
I have used C2W 3 times,
Fairy nuff. Soz. I was under the impression that you were one of the people that had been put off by the scheme's many contradictions, unclarities and fudges,without realising that they nearly all melt away like a rainbow as you approach them 🙂
and once for a small amount of parts (2020?) which was a massive ball ache, halfords refused to do it and take the voucher and I eventually had to use tredz and buy slightly different stuff which would have been cheaper direct to merlin.
Yep, that's a good point. One of the main stupidities of the scheme is that it varies so immensely between employers and providers. Some just let you spend as much as you want wherever you want, some stick to a £1k max and/or Halfords. Which puts you at a disadvantage.
Anyone got an easy to implement model for salary sacrifice schemes that ensures the benefits are equal across tax bands?
Cap the value at £750 for normal bikes and £3000 for cargo bikes. You can get a perfectly good bike, helmet and lock for £750. Beyond that, it's state-sponsored luxury...
but look at how many MTB only companies offer c2w as a means of buying a bike, pretty sure there is a very limited group of people commuting on full enduro rigs..
quick examples:
Cyclescheme at Privateer – Privateer Bikes
Cycle To Work | Bird MTB // Born in Swinley, Built in the UK.
You've deliberately chosen two companies that only make MTBs. Do you want a list of companies that don't make MTBs but offer C2W as a balance? It will be a lot longer than Bird and Privateer. I could probably put together a long list of companies who only make e-cargo bikes but offer C2W. Who needs an e-cargo bike for riding to work? Not me, so should probably be banned!
Btw, I'll be riding my 150mm FS to work on Friday. I ride in every day and use my gravel bike, but I'm planning on heading home via some local MTB trails. This will happen more frequently as the days get longer and the trails dry up. I could equally bring a jump bike to work because I pass some world class jumps on the way home. That's the thing about cycling isn't it - we don't all do the same thing.
Who needs an e-cargo bike for riding to work? Not me, so should probably be banned!
People who take their kids to school en route to work? Which I do see happening btw inside and outside of London.
I picked Bird and Privateer as examples of where I don't think the scheme should apply given the bikes offered in terms of cost and likely usage.
YT is another example, though at least they have a gravel bike now:
Green Commute Initiative | Support | YT United Kingdom (yt-industries.com)
anyway all this is not too serious, have fun on Friday - one way to beat the train strike!
Cap the value at £750 for normal bikes and £3000 for cargo bikes. You can get a perfectly good bike, helmet and lock for £750. Beyond that, it’s state-sponsored luxury…
Even at Halfords that doesn't give much choice at all, and almost nothing that would last a year of my commute (20 miles per day, almost every working day). It would also take C2W out of pretty much every local bike shop.
if anyone is actually looking for a reasonable all round bike - any a deal better than c2w:
Kona Dew Plus 2022 Bike (winstanleysbikes.co.uk)
and more:
Search results for: 'kona dew' (winstanleysbikes.co.uk)
You can get a perfectly good bike, helmet and lock for £750. Beyond that, it’s state-sponsored luxury…
You clearly have not read the Brompton price sheet. And Bromptons really are very commonly used to ride to work (often as mixed mode transport). It was the residuals on them that prompted the exit fee of 7%.
Much more is ‘saved’ by individuals pilling money into their pensions to reduce their tax burden.
Yes but that's a legitimate tax saving. It's a well used tactic to incentivise things the government wants you to do - and they want you to save for your own retirement so they don't have to cough up.
However, us lot buying luxury bikes is not a legitimate use, IMO, especially as it's a 'cycle to work'. A scheme to encourage people to exercise, with tax breaks on stuff like gym membership and club usage would be great, but that's not what this is.
government will squander our tax money regardless. may as well have a shiny new bike..
It really doesn't work like that.
Even at Halfords that doesn’t give much choice at all, and almost nothing that would last a year of my commute (20 miles per day, almost every working day).
Rubbish. If it's got discs it'll last as long as anything. Probably more so cos it's likely to be 8 speed not 12.
However, us lot buying luxury bikes is not a legitimate use, IMO, especially as it’s a ‘cycle to work’. A scheme to encourage people to exercise, with tax breaks on stuff like gym membership and club usage would be great, but that’s not what this is.
A ‘cycle to work’ scheme without any actual requirement to cycle to work....
If all tax breaks are this easy to exploit and effectively unenforceable it's no wonder we've ended up with Zahawi thinking he did nothing wrong. It starts with a grand off a shiny bike and the next minute you're setting up offshore accounts.
For those discussing the ethics of spending a couple of thousand on a bike and that it is a middle class luxury. Take a look at BEVs and benefits in kind (or lack of).
We ought to sort out the tax-free BEVs costing £40,000 upwards before we start tackling the injustice of £2000 on a bike.
The fairer approach would be to make all cycling purchases VAT free. THis would take away the C2W scheme margin, the residual value charge (kick in the teeth), the differential tax approach, and include non working / low earning people and children equally.
Even at Halfords that doesn’t give much choice at all, and almost nothing that would last a year of my commute (20 miles per day, almost every working day).
Rubbish. If it’s got discs it’ll last as long as anything. Probably more so cos it’s likely to be 8 speed not 12.
Yes, you're possibly right but doing 4000+ miles a year you don't want a bike with cheap components that regularly wear out. Also, you want it to be suitable for your commute. Under hybrid bikes at Halfords, there's a choice of 5 - count 'em! - different hybrid bikes under £750 that aren't Falcon or Carrera. One that might be ok for my ride, a £600 Boardman hybrid, still comes with nasty Tektro brakes and cheap tyres.
Tell me why I should accept cheap brakes and tyres when I do more miles on my bike than most people do in their expensive cars?
The fairer approach would be to make all cycling purchases VAT free.
Absolutely. Or reduced VAT.
See Portugal.
A ‘cycle to work’ scheme without any actual requirement to cycle to work….
I suppose you 'could' try to view it like that if you wanted to.....the government's guidance to employers for eligibility.....it's guidance rather than law but uses 'must' not should. And I suppose if the bike was put in the shed and never touched again you could say you don't have to cycle to work. But if used one for leisure I'd saying it would be fair to assume it must be used once for cycling to work. If course it's be left undetermined if it means 50% of frequency, distance or time so not very mandatory sounding. But I think most would read than and infer riding to work should form a good chunk of its purpose.
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 offer of the use of hired cycles must be made available across the whole
workforce, with no groups of employees being excluded. This does not
necessarily have to be through a salary sacrifice arrangement in each case.
You could of course say, why does it matter - exercise is exercise. If that's your line of thinking would you be comfortable with golf sticks, gym membership and sailing boats having the same access to tax breaks? And what aspects of public life would you like to see paired back to compensate? There's a broader conversation of course about if we'd all get healthier if we went this way and save more money than we lost but singling out bike shaped exercise toys from others was never the intention.
but singling out bike shaped exercise toys from others was never the intention.
You do realise that commuting to work by bike has massively increased in the time that C2W has existed? As pointed out much earlier in the thread, the responses on a MTB forum may be rather different than the ones you'd get if you stood by the side of a cycle path in a major city this morning and asked about C2W.
Tell me why I should accept cheap brakes and tyres when I do more miles on my bike than most people do in their expensive cars?
Umm, that's nothing to do with the discussion. The point is that tektro brakes and cheap tyres are just fine for commuting to work for most people, and that means that a £750 bike is fine. You can buy what you like, of course, as can I, but you shouldn't expect a tax break for indulging your hobby. Nor should I.
If that’s your line of thinking would you be comfortable with golf sticks, gym membership and sailing boats having the same access to tax breaks?
If it were up to me I'd have publicly funded sports facilities free at the point of delivery, with capacity increased to match demand - across ALL sports.
You do realise that commuting to work by bike has massively increased in the time that C2W has existed? As pointed out much earlier in the thread, the responses on a MTB forum may be rather different than the ones you’d get if you stood by the side of a cycle path in a major city this morning and asked about C2W.
That's why it's a good scheme for its intended purpose - but people like us should not be taking the piss.
It's strange reading these respones.
Some people only seem to be able to view cycling as a "sport", not a useful form of transport.
@TiRed I got a Brompton on C2W. After it was paid for the hire period was extended to a total of 6 years and I avoided having to pay for the residual, despite the bike probably being worth what I paid for it. In fact it wasn't fully 'mine' until last year, by which time I'd worked for 2 companies other than the one I got the bike through, and been retired for 18 months.
This is an extract from the email I got at the end of the first year, once I'd finished paying for it
OPTION ONE (recommended) - Continue to use the equipment free of charge
Complete the Hire Agreement below and you can continue to use the equipment free of charge for a further 60 months. This new extended Hire Agreement is between you and Evans Cycles, which means if you leave your employer you can still continue to use the equipment at no further cost. At the end of the term we are permitted to transfer ownership to you free of charge.
Some people only seem to be able to view cycling as a “sport”, not a useful form of transport.
Three grand road bikes or full bouncers are pretty much for sport, yes.
Umm, that’s nothing to do with the discussion. The point is that tektro brakes and cheap tyres are just fine for commuting to work for most people, and that means that a £750 bike is fine. You can buy what you like, of course, as can I, but you shouldn’t expect a tax break for indulging your hobby. Nor should I.
At what point does you car scheme car move from utility to luxury? Should the car scheme be capped at £20k? That's probably about the equivalent £1000 in bike terms. This would have a far greater effect on public finances than the cyclescheme.
If that’s your line of thinking would you be comfortable with golf sticks, gym membership and sailing boats having the same access to tax breaks?
I think encouraging exercise could be a net gain to the exchequer long term as the cost of dealing with inactive lifestyles is in the £10bns per annum via the NHS and lost work (and tax revenue) / incapacity benefits etc.
what aspects of public life would you like to see paired back to compensate?
It should be able to pay for itself long term...
Should you be able to spend £20m tax free on a yacht, No. Should you get a yearly allowance for sports related activity - why not. Will some people abuse it and never exercise - yes, and it was ever thus and will ever be so.
NB I've not actually used C2W as my employers have never offered it, and even if they did, I wouldn't be that interested in using it.
Should you be able to spend £20m tax free on a yacht,
OT and I agree with the sentiment, but wonder how many expensive assets, like yachts, are actually owned by companies, with the MDs as the only user?
I've worked in SME's where lots of assets 'owned' by the MD are actually company property, from cars, mobile phones, fuel for the vehicles...
OT and I agree with the sentiment, but wonder how many expensive assets, like yachts, are actually owned by companies, with the MDs as the only user?
If you worry about all the corner cases, and all the ways it could possibly be abused, you'd never manage to pass any legislation. Leave it up to HMRC to chase then up down the line and if it becomes a big issue, amend the legislation.
Does it really matter that a small % of C2W bikes never ride to work? Is it worth scrapping the whole scheme just to stop that?
Someone will always getting away with scamming the system - that's just a given.
Does it really matter that a small % of C2W bikes never ride to work? Is it worth scrapping the whole scheme just to stop that?
Someone will always getting away with scamming the system – that’s just a given.
If that was the only issue, I'd be there with you. But it's not. It's the haves benefitting more than the have nots. Further compounded by the haves being more likely to take the piss and spend it on a toy of now unlimited value than an actual cycling to work tool.
So yes, I too would scrap and make bikes VAT free instead. Only If it was about commuting I'd ask manufacturers to apply for certain models to be exempt based on thier fitness for commuting on. As someone who commutes 150miles+ a week average on a 27mile each way route I'd probably be shafted myself as I don't commute on a very atypical commuter bike, but thems the breaks.
I suppose the other way to do it would be the first £1k of a bikes value being VAT free - so no one, no matter how wealthy got to save more than £200.
Does it really matter that a small % of C2W bikes never ride to work? Is it worth scrapping the whole scheme just to stop that?
My guess is that % isnt exactly small. The money would be better invested in ensuring workplaces have decent facilities for cyclists. I know several people despite their c2w bike who didnt cycle because the facilities were crap.