Work are doing the annual Bike-to-Work scheme promotion and I thought I would check it out.
I have never bothered before as I either work from home or take the train to London but is appears that is fine. As long as I promise that most my journeys are for commuting then I get the bike.
If I sincerely promise to use my new bike to ride to and from the train station and across the hallway to my home office, will anyone ever check?
It does just seem like 'free money' but being a good little boy, I thought I would check I am correctly interpreting the very loose sounding rules.
Don't think there's any real checks throughout by most companies, i use mine to commute into office 2-3 times a week, it's not monitored, remember you can cycle to and from the train station and it's still cycling to work, it doesn't mean door to door.
WCA, surely you need a Decathlon eBrompton-esq bike to get to the station?
Technically, if you don't use the bike on your commute it is tax evasion.
Anecdotally I'm aware of more than a few people who don't even commute by bike who've bought a bike on the cycle to work scheme.
Like with many things HMRC under the Conservatives it does seem to run on an honour system, which is open to abuse.
I've never heard of anyone being checked up on, although this may change if we get a change of government.
I did it all by email and no one has ever once asked me what bike I have or what I intend to do with it. You're dealing with people who do admin for a living, what do you think their level of interest is?
I got a Transition PBJ by the way, so a totally sensible commuter. The next one might be an Airdrop Slacker if they do a mk2 mullet version.
Technically, if you don’t use the bike on your commute it is tax evasion.
Technically, it's avoidance isn't it? Not evasion.
It's not free money. Other tax payers subsidise the perk.
But they may not have access to that benefit themselves if they're self employed or retired, basically if they're not PAYE.
I would have no issues with it if other leisure activities that don't have to reduce traffic either like gym membership were also subsidised by the tax payer and if everyone had access to them. But that's not the case.
It's absurd IMO. I appreciate this is a very unpopular opinion however 😂
My employer has a stipulation in the T&Cs that the bike must be used to commute to work at least 3 days per week. Since the current requirement is 2 days per week in the office, this essentially means they could conceivably say you're not using it properly and refuse to process the application. I raised it with HR in a meeting about carbon emissions and staff commuting - she got very defensive, started saying "it was the rules" and "it's not us, it's HMRC" but I didn't bother pushing further to find out if they would actually refuse an application.
It's a shit system anyway at ours. Very restrictive, very limited.
Here's the actual wording from hmrc (I think from 2003?)
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21664
"the employees must use the cycle or equipment mainly for qualifying journeys. ‘Qualifying journeys’ means the same as for the works bus exemption (see EIM21850). 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.
Employees are not expected to keep detailed records of time spent cycling or miles travelled for the purpose of this ‘main use’ test. Accept that the test is satisfied unless there is clear evidence to suggest that less than half of the use of the cycle or equipment is on qualifying journeys. If it is clear that there is substantial use of the cycle for qualifying journeys, do not make special enquiries about the extent of any other use."
It's not subsided is it? It's just tax free.
I remember when I bought an early version of a gravel bike (being way ahead of the curve, like) the company finance woman phoned me and tried to put me off saying "if you don't use the bike for work you could get fined for fraud.." or some such bollocks. I just laughed... 1) cos there is no way they could check if you use the bike for riding to work and 2) I was intending to use the bike for riding to work (and did). I think she was trying to avoid some paperwork 😀
other leisure activities that don’t have to reduce traffic either like gym membership
Pretty much every other leisure activity increases traffic. Everyone drives to the gym, then seems to get a Starbucks on their way out and a KFC (via the drivethrough) for lunch.
she got very defensive, started saying “it was the rules” and “it’s not us, it’s HMRC”
Wonder if they've misunderstood it as "most of your commuting miles must be by bike" rather than "most of the miles done on the bike should be commuting". If you do your 10 mile commute on it once that's fine as long as you do less than 10 miles of leisure miles on it.
It’s not subsided is it? It’s just tax free.
Correct, just like salary sacrifice lease cars and various other benefits.
I've not run the scheme for a long time, but when I did, HMRC were quite clear there was no expectation on employers to audit or monitor actual use / commuting. Whilst the idea for government is that people commute on them - even if they are used for other active stuff its not a bad investment by government to prop up the bike industry and encourage people to be more active. Nickfrog's objection is partly valid, but the even more absurd thing is like most tax breaks it advantages higher rate tax payers (who can obviously afford a commuting bike anyway) more than the poor.
I did hear of one large employer (probably 8 yrs ago) who's new CFO was a cyclist hater and who decided to clamp down on the "abuse" of the system. That backfired because in the resulting discussions with the union they ended up installing extra showers and bike storage facilities etc!
It’s not subsided is it? It’s just tax free.
No, it's not directly subsidised. What's being said is that since government tax revenue is reducing and YOU are seeing a benefit, but services provided by that tax remain the same, that others then shoulder some of the burden when the goverment either increases taxes or decreases services.
The counter argument is that perhaps fitter, healthier people need less of those services. Since no matter what you get via cycle to work, it will be used in someway to stay active, I think this could be justified.
I have never heard of it being checked.
Closest I have seen is last time it got offered the company did add a comment along the lines "if you are a virtual/remote worker you are unlikely to be eligible" but didnt actually block it as far as I am aware.
I appreciate this is a very unpopular opinion however
Manufacturers should be able to apply to have specific models in their range classed as commuter or shopper models. All those bikes should be VAT exempt to anyone walking off the street.
I'd miss out as my commute is a proper road bike territory, but it might actually do good for the intended purpose - getting more 'functional' mile on to bikes instead of cars. Any system where someone on minimum wage cant apply (because the salary sacrifice would put their play below minimum wage) to buy a bike to actually get to work because they can't afford a car or public transport but the company director can easily abuse it to get 40% off their £9K gnarpoon sled for weekends at BPW (and still drive their Range Rover to work every day) is a total arse.
But in your case OP - if you are using it to get to the station, fair play. And even if you aren't, you'll only be abusing it as much as a lot of other people (Bird have a cycle to work FAQ page - Bird don't make bikes many people would consider appropriate for cycling to their work).
Since no matter what you get via cycle to work, it will be used in someway to stay active, I think this could be justified.
Only if you also get a similar benefit buying running shoes, golf clubs or paying for a gym membership imo. And how many people would feel comfortable knowing the well healed are getting 40% off their golf clubs?
the even more absurd thing is like most tax breaks it advantages higher rate tax payers (who can obviously afford a commuting bike anyway) more than the poor.
Yep, you get a bigger benefit if you're a higher rate taxpayer. And if your deductions would take you below minimum wage then you can't use the scheme at all. So a director gets the cost of their Cervelo (carried around on the back of their salary sacrifice Tesla) discounted and then spread over 12 months, while the cleaner has to pay full price AND stump up the cash up front
It’s not subsided is it? It’s just tax free
If it's "tax free", then there is a tax shortfall compared to people who buy a bike without the tax benefit. Who do you think pays for that fiscal shortfall?
That's right, all other tax payers, including those who don't have access to the benefit as not PAYE.
i've used our work scheme twice.
First time was for a Merida commuter bike, which i have ridden to work many times.
The second time was for AXS T-Type Transmission for my Enduro bike. This has never been ridden to work. Although i could ride it in, if i really wanted to.
A friend got 2 x torque wrenches on his.
As far as i am aware, no one ever checks.
Here's a question for you: Is fear of getting caught the only reason to do the right thing?
Pretty much every other leisure activity increases traffic. Everyone drives to the gym, then seems to get a Starbucks on their way out and a KFC (via the drivethrough) for lunch.
On that basis pretty much everyone on C2W doesn't comply and is evading tax. So let's have neither gym membership nor leisure cycling tax free unless both can be checked for compliance (which neither can practically be) or stop discriminating against low wages and non-PAYE.
Shouldn't non PAYE or poor people also take part in the improvement of fitness and reduction in traffic.
When you actually look at C2W, it is absurd. And not to mention the cost of administration and the fees to retailers, which are passed on...to all the customers.
It’s not subsided is it? It’s just tax free.
Firstly it can be - I know of one company who run the scheme totally differently and provide free of charge bikes (low spec but actually sensible commuting bikes) to staff. I think this was partly to do with the complications of minimum wage on salary sacrifice (and a CEO who was a proper tofu-eating, Brompton riding type!). But no the conventional scheme does not involve subsidy it is tax free.
BUT the reality is that "tax free" is in a way saying to everyone who pays tax and doesn't qualify or doesn't take up equivalent offers - you should pay more tax so WCA and dc1988 can have nice new bikes every year. But then the same applies to a much larger extent to everyone who is able to get an EV on salary sacrifice, those who can afford to save more in their pension, etc.
I work from home and use the scheme. Bought myself a cheapo single speed for getting to the local shop for my lunch. So technically I am using it to get to and from my place of work. Also, it saves me polluting the environment if I would otherwise have to drive, so my conscience is clear
i saved 200 quid in tax, which I can also sleep easy over. Although I do agree it’s crap that minimum wage earners can’t be benefit.
i know one company director who has bought a sworks road bike and a tt bike in the last 3 years on bike to work, saving about 7k in tax. That to me is taking the piss a little, although tbf I believe they once cycled the sworks to their office.
Yes but the pension tax relief is open to everyone. Even if you don't pay tax, on up to £2,880/year contribution!
And it also has some tangible benefits by being an incentive to plan for your retirement and not potentially rely on benefits. Plus, you will eventually pay some income tax on it. And someone may pay a lot of IHT on it.
That's my point - the scheme is to encourage cycling to work, but you know you won't get caught, so is it ok to buy bling for your hobby instead?
Technically, it’s avoidance isn’t it? Not evasion.
Nope, as per the links above, if you don't use it primarily to commute to work, then it's illegal and therefore tax evasion.
Here’s a question for you: Is fear of getting caught the only reason to do the right thing?
Lots of studies suggest that is the case. Criminals are deterred more by the chance of getting caught than the penalties. So increasing sentences is not an effective deterrent, whereas more police is.
I've had 6 different bikes whilst with three different employers and no-one ever asked or checked. Riding bikes is good for individuals and society so I'm not going to stress about the ethics of not riding my most recent purchase to work (I do ride to work though on a Dolan Ti gravel bike I got through the scheme a couple of years ago)
I agree that the scheme is daft, as a higher rate tax payer I am much better placed to pay for a bike than minimum wage earners who cannot access the scheme or who can only access it at lower rate. However, I am still going to use it. Cycling makes me healthier and happier, therefore more productive and less likely to need NHS input. The scheme is there and I will use it, but I would rather see parity across the system to ensure it is a genuine incentive for everyone to ride bikes.
Pretty much every other leisure activity increases traffic. Everyone drives to the gym, then seems to get a Starbucks on their way out and a KFC (via the drivethrough) for lunch.
Just ridden to the gym (for lifting) and back, 12 miles round trip, ebike though so maybe that doesn't count? 😉
the scheme is to encourage cycling to work, but you know you won’t get caught, so is it ok to buy bling for your hobby instead?
As I mentioned before, I do ride to work and purchased a bike for that purpose in my last job... but I have a ride-to-work-bike now and as you can use the scheme for accessories, I bought a load of MTB tyres last time I used it - maybe a couple of commuting tyres were in there too.
So, yes.
My employer has a stipulation in the T&Cs that the bike must be used to commute to work at least 3 days per week. Since the current requirement is 2 days per week in the office
...leaving you three days to ride to your "home office". 😉
a firend of a friend used to work from home well before it was cool, converted shed in the bottom of the garden. The only way he could mentally separate his work and home life was to do a walking commute a lap of the village morning and evening.
And other tax payers support or fiscally subsidise the bling or tools.
we all subsidies other peoples life choices via tax, every single day. I subsidies other peoples kids having play parks, medical treatment for folks who live unhealthy lives, child benefits etc etc. just the way it is, don’t give it a second thought. I personally don’t see the problem, even if you aren’t cycling to work it’s still a net benefit to society, more people cycling = a healthier society in general
we all subsidies other peoples life choices via tax, every single day. I subsidies other peoples kids having play parks, medical treatment for folks who live unhealthy lives, child benefits etc etc. just the way it is, don’t give it a second thought. I personally don’t see the problem, even if you aren’t cycling to work it’s still a net benefit to society, more people cycling = a healthier society in general
Sure. So let's go back to square one:
1 - why is it so socially discriminatory? Only PAYE and excluding the lower paid workers effectively while saving higher tax payers so much more when they need it less.
2 - why is evasion tolerated and what health benefits do x2 torque wrenches bring?
3 - why is it that other forms of getting a healthier society in general like gym membership or Kayaking or whatever are not included? No one knows or care if 1% or 99% of C2W bikes are used for even occasional commuting? So who is to say that a fiscal incentive of the same cost won't bring even greater health benefits if focused on gym membership for instance? Plenty of people won't ride a bike sadly, particularly on the public road whereas perhaps plenty more would go to the gym.
It's a great idea on paper but implemented very badly.
why is it so socially discriminatory? Only PAYE and excluding the lower paid workers effectively while saving higher tax payers so much more when they need it less.
See my earlier post. I’ve already said It’s not great that lower earners don’t benefit. Don’t see an issue with paye only however. I think there are enough tax dodges going on with ltd co’s and the like already that it would be a bit rich for them to claim it’s unfair
why is evasion tolerated and what health benefits do x2 torque wrenches bring?
I have no idea why torque wrenches are being brought into it. But I think it should be tolerated as it’s beneficial to health of country. I got into cycling by buying a bike on c2w with no intention of riding to the office. 10 years later I’m fitter and healthier than I’ve ever been
3 – why is it that other forms of getting a healthier society in general like gym membership or Kayaking or whatever are not included
im not arguing that there shouldn’t be tax breaks for those kinds of activity. There probably should be.
I personally don’t see the problem, even if you aren’t cycling to work it’s still a net benefit to society, more people cycling = a healthier society in general
Maybe for your first bike, but let's face it most of us are already cyclists and already have numerous bikes, so buying a tax-free superbike isn't increasing anyone's exercising is it?
This loops nicely back to some on here getting arsey about perceived cheap/tax avoiding private use of commercial vehicles.
Not speaking in any professional capacity, but HMRC has bigger fish to fry.
That said, under the old stricter rules, a lot of bike shops would offer me C2W over the limit or on sale bikes, then retract when they found out who my employer was. Shops seemed more worried than scheme users.
Our own scheme had a "50% of mileage must be commuting" but never checked to my knowledge.
So it's down to Rule 1. If you know you aren't going to use it for any commuting, and you can afford to buy the bike without using the scheme, it's on your conscience whether you use the scheme to make a saving to avoid adding to the already overflowing tax pot that funds the public services you use.
If you think that puts me on a high horse, at least I'm further away from the manure!
There seem to be a lot of high horses around here, lets hope nobody falls off and injures themselves 😉
I also suspect there are a good few that perform some mental gymnastics around the subject on this one specific issue to suit their needs or actions 😉 If it was golf sticks and only golf sticks that got a tax benefit because of some sort of health benefit I'd bet a good few might find their moral compass got a calibration.
Fully understand its a cycling forum, but if I were to post that I’ve been avoiding tax on a multi thousand pound vehicle that wasn’t a bicycle, I’d get lynched and probably reported to HMRC on here.
For the record fair play and enjoy your cheap bikes people who can enjoy the perk.
I used my last C2W voucher to buy an enduro frame, not even a full bike.
How dare I use a legal tax framework to buy something from an independent UK bike company. Something I probably wouldn't have bought without the tax incentive. I must be an evil tax dodger.
“How dare I use a legal tax framework to buy something from an independent UK bike company. Something I probably wouldn’t have bought without the tax incentive. I must be an evil tax dodger”
Well I’d start by keeping quiet about it, so as not to make envious people push for tighter rules. 😀
How dare I use a legal tax framework to buy something from an independent UK bike company.
Except it isn't is it? See the HMRC rules above.
Seeing as the cycle to work companies are in it for the money and the bike shops are in it for the (paultry amount) of money and the hope of repeat custom/servicing no one checks.
a legal tax framework
It's not legal. It's a requirement for the scheme that you ride to work on the bike, and you're not.
How dare I use a legal tax framework to buy something from an independent UK bike company. Something I probably wouldn’t have bought without the tax incentive. I must be an evil tax dodger.
I mean you're no Amazon or Starbucks, but as the legislation/guidance does state that "at least 50% of the cycles use must be "qualifying journeys" ie commuting to work purposes" - yes, I just looked it up - you appear to have misused a legal tax framework.
Technically speaking, as I'm now aware of a potential tax issue, I have 72 hours to report it, or I'm the one on a disciplinary charge. And we do have the powers (if we need to use them) to get your details from ST Towers to pursue you.
But if you come off your bike and the NHS hasn't got the funding to fix you, just remember that little bit of tax you've saved might have made a difference (winking emoji)
"That said, under the old stricter rules, a lot of bike shops would offer me C2W over the limit or on sale bikes"
There never was a limit in the tax legislation (nor restriction on sale bikes that I recall) the former was a consumer credit issue so employers with them were quite happy to have no restriction on cost.
If I fall off anything, it will be a bike I’ve paid for myself
But im also paying for the bike on c2w, the full value of the bike comes off my pay check. Yes you can argue that there will be a short fall in tax, but in my case I cover the cost through an hr of overtime a week that realistically I wouldn’t have done otherwise (wife asked me to justify spending more money on a new bike, so I appeased her by saying I’d work harder). So the tax man isn’t any worse off really
also, if I couldn’t get the bike on c2w I wouldn’t have paid full price for it. So not only would I be using the car instead. But a lbs would have missed on a sale!
but then again I saved 200 quid. I’m not so comfortable with folks saving multiple thousands each year, however I expect they are the exception rather than the rule
Isn't B2W, just the same as Salary Sacrifice cars...a means of getting cars/bikes into the market, supporting jobs and triggering the economy? I don't mean this to sound like trickle down economics, but genuinely, the only reason I can afford a second had EV is because someone took the depreciation hit first. I'm not sure I care that it was done via salary sacrifice. Same with many of my second hand bike bits.
It's one of those irregular verbs.
I plan my tax affairs carefully.
You avoid tax.
He evades tax.
I struggle to get very excited about potential tax evasion with c2w. I mean, sure, that's not what the rules say, but it's a pretty small amount really, and if it wasn't used for c2w, people would just avoid tax by putting it in a pension instead. Doubt it really makes any difference to the taxman in the grand scheme of things - if anything, it might help through VAT.
I used it once, on a bike I mostly use to cycle to work, bonkers me!
I enjoyed this comment above:
if they’re self employed
then they are often 'optimising their ability to minimise their taxable pay' anyway and can claim back VAT on 'business' expenses blah blah blah. I have been paye for 20+ years and there's been this one actual benefit to it, aside from lining the duck houses of MPs with silk of course.
*Much of this is said tongue in cheek, aside from the actually commuting to work by bike, when I commute it's usually by bike.
I've had three bikes through the scheme and no one has every questioned anything.
I also have a salary sacrifice car. Am I the baddies?
I also have a salary sacrifice car. Am I the baddies?
You have single handedly sent British public services back to the dark ages.
I also have a salary sacrifice car. Am I the baddies?
No because the rules are set up for this. It used to be a tax dodge then they introduced BIK tax to compensate.
It’s not legal. It’s a requirement for the scheme that you ride to work on the bike, and you’re not.
@molgrips - I didn't say anything about not riding the bike to work. How do you know whether I am or not?
I didn’t say anything about not riding the bike to work.
So do you ride the enduro bike your built up from the frame you bought on C2W to work?
There's a new fraud bill being released soon to cut down on benefits fraud, so feel less guilty about C2W, as the government are offsetting it against the money they'll make back from the regulars at wetherspoons 🥸
So I think we’ve established, whilst it isn’t checked, it’s best not to advertise your small tax wheeze, so as not to annoy the rest of us who don’t have access to such a scheme.
Also moaning about restrictions of these schemes will attract tiny violins, when talking about a bike that will never be used as the scheme intended, or as some I know, literally never get used at all.
But ultimately not something to get aggravated by.
Didn't someone here buy a canoe on it?
Not a fan of the scheme.
Penalises those at the bottom and disproportionately benefits those at the top.
Germany had something very similar now and I wasn't able to take part as I was self employed.
"No because the rules are set up for this. It used to be a tax dodge then they introduced BIK tax to compensate."
BIK on EV's obviously going from 0 to just above 0 has meant it's forced a load of EV's into the market. So like C2W it's flawed but is overall resulting in the desired behaviours. I had a one on the scheme early on and advocated it to a few at work who are still regular commuters.
technically i don't ride to work on my cycle scheme bike but i do take it to
a) ride the two miles from where i park if there's no parking space, even though I pay for one (thank you NHS)
b) i play the how far can i ride in my lunch hour game
c) i drive to work, get there early and go and do a 12-25 mile "fake commute"
does that count?
I don't see any high horses in this thread, just tiny Shetland style ponies.
““I don’t support it because I don’t get to use it” is honest, but not a particularly compelling argument.”
I do find myself slightly envious at times, but I’m over it, I commute for free. So money saved can go towards shiny things.
Although said shiny things will be a bit more expensive from some shops as the shops have to pay for the admin of the schemes that others use for their cheap bikes, as I understand it.
But would those shops still exist without the scheme(s)?
Shetland ponies are almost singularly inappropriate for the commute and should never have been eligible for the Horse to Work scheme.
Wow, this turned out strange. A simple "No, no-one checks and everyone accepts it was a good idea which has just become a nice tax perk for the rich" would have sufficed.
Anyway, I haven't bothered in all the years it has been running so probably won't bother now although some new tools might be handy...
