Cycle To Work Scheme Being Reduced? - UK

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Fangs2k

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I know a few people have availed themselves of a new EMTB on the UK Cycle To Work scheme, but there’s a rumour that it’s getting some attention in the forthcoming budget.

www.theguardian.com

Rachel Reeves to cut tax benefits for workers using salary sacrifice schemes to buy bikes

Chancellor expected to introduce new limit on how much can be spent on a bicycle through cycle to work scheme
www.theguardian.com www.theguardian.com

Not good news for bike shops if it gets restricted to £1k or something, but I do get the feeling it being used to get up to 42% off a £10k e-bike probably wasn’t what it was intended for.
 
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Hopefully they'll keep it over £3k as that's my employer's limit.
 
Doubt there will be much resistance. Bike retailers hate it & we are a nation of fat car lovers. Meanwhile, enjoy the Telegraph doing a massive stoppie.

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I have a couple of close friends with , Independant Cycle shops, they have both stopped doing the scheme , nightmare for them …
 
Even if bike shops didn’t especially love the scheme it’s got to have a detrimental effect. as would thought it will have impact on quantity of sales
 
#lazy said:
Got to admit it’s was abit of a piss take , the more you earn the more of a discount you got View attachment 171037
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A bit like the more you earn the more you’re taxed right?

It’s one of the only benefits in recent times in a life where for the vast majority I along with many have been paying 40% tax, and no, I’m not ok 6 figures. But yeah let’s keep taking and taking and let the super elites and rich have their tax loopholes.
 
Adyzakydany said:
A bit like the more you earn the more you’re taxed right?

It’s one of the only benefits in recent times in a life where for the vast majority I along with many have been paying 40% tax, and no, I’m not ok 6 figures. But yeah let’s keep taking and taking and let the super elites and rich have their tax loopholes
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You pay 40% tax on earnings between £40k-£125k actually but it would be nice if that went up to £60k .
 
PeeJay1 said:
I have a couple of close friends with , Independant Cycle shops, they have both stopped doing the scheme , nightmare for them …
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They don’t want to sell bikes? There will be a lot of people who stop buying a new bike each year if this goes away
 
#lazy said:
You pay 40% tax on earnings between £40k-£125k actually but it would be nice if that went up to £60k .
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So what did I say that was incorrect? I’m not on 6 figures and pay 40% tax.

I didn’t say people on 6 figures don’t pay 40%.
 
Adyzakydany said:
Jesus, quote me exactly where I said that please, where did I mention £40k?
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I think their point is that you only pay 40% on a portion of your earnings. Some (non UK based) might read the below and take it to mean you get taxed 40% on everything.
Adyzakydany said:
A bit like the more you earn the more you’re taxed right?

It’s one of the only benefits in recent times in a life where for the vast majority I along with many have been paying 40% tax, and no, I’m not ok 6 figures. But yeah let’s keep taking and taking and let the super elites and rich have their tax loopholes.
Click to expand...
 
DylanJM said:
I think their point is that you only pay 40% on a portion of your earnings. Some (non UK based) might read the below and take it to mean you get taxed 40% on everything.
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Well, that’s given lol, my comment above doesn’t need to be stipulated with that at the end of it, had I said I pay 40% on everything then I’d be wrong. I didn’t say that.
 
The scheme is great but it is flawed; the people that would really benefit (those on NMW) are ineligible and this thread (and the one over on STW) demonstrate that a number of people (myself included) abuse the scheme to buy bling toys. No-one needs the latest eGnarpoon to cycle to work (not that many of them are used that way anyway)
 
Planemo said:
???

I thought 20% was up to £50,270 and 40% was £50,271 to £125,140.
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Apologies……yeah it is at £50k !
Ps @adyz post your tax details and we can establish exactly what’s what 🤪
 
Doomanic said:
Gnarpoon
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😂

Dax said:
if this goes away
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I don't think they've said that? Deets are thin but aiui, they're talking more about capping the limit, so kneecapping the Yeti dentists but big upping the Halfords Carrera plebs.

The really generous scheme that goes under the radar is the one for Ltd. company directors. That one allows for 100% capital allowance deduction against corporation tax, full vat reclaim & no BIK liability. In effect by funding from gross income rather than post tax, it amounts to a 20-25% cost saving & full write off of the cost with no restrictions on the bike & also allows for lights, safety gear etc. & maintenance costs thrown in, all with no requirement for HMRC pre approval.

Given the sheer number of eligible businesses in the country, I'm surprised this isn't more widely exploited & *gently* abused for directors to provide what amount to staff bikes for people to use.
 
Will be a shame as scheme rules at the moment don't let you part pay, so if they put a £2k limit it's only for bikes cost that or less

I didn't realise there was an exclusion for below NMW which is a joke, seems to relate to rules on salary sacrifice rather than this scheme but there is no way around it.

I used it recently to buy an amflow, I've not ridden it to work but its been used for exercise which seems like a reasonable thing to subsidies.

Suffers from an optics as bikes look flashy, no uproar when someoen puts £10k into their pension. I'm also a bit suspicious people might be evading tax selling second hand emtb's that have barely been ridden.
 
RustyMTB said:
😂


I don't think they've said that? Deets are thin but aiui, they're talking more about capping the limit, so kneecapping the Yeti dentists but big upping the Halfords Carrera plebs.

The really generous scheme that goes under the radar is the one for Ltd. company directors. That one allows for 100% capital allowance deduction against corporation tax, full vat reclaim & no BIK liability. In effect by funding from gross income rather than post tax, it amounts to a 20-25% cost saving & full write off of the cost with no restrictions on the bike & also allows for lights, safety gear etc. & maintenance costs thrown in, all with no requirement for HMRC pre approval.

Given the sheer number of eligible businesses in the country, I'm surprised this isn't more widely exploited & *gently* abused for directors to provide what amount to staff bikes for people to use.
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Surely that's only applicable if the bike is for business use?
 
Yes, business use only, however as you helpfully point out

ZR1 said:
I used it recently to buy an amflow, I've not ridden it to work but its been used for exercise which seems like a reasonable thing to subsidies.
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The c2w scheme is abused & they're probably realising it. What seems reasonable to someone can still easily be a breach of the rules as well as the intention. Not moralising, mine bought under the director's scheme would be hard to justify, given I work from home. All of which should help the taxman with their enquiries.
 
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Guess I better ride it to work then. Didn't even realise there was a 50% condition of the scheme, had some work presentation of benefits they made sure to highlights the ownership rules and lease length etc but stated you can use it recreatinally.

I think the capital allowance thing is different as I'm not sure commutting wouldn't count as business use? Better stick some company branding on your bike and riding gear and call it marketing!
 
Without wishing to sound like a pencil neck, the rules are the rules but in the real world, the odds of the taxman actually checking up on cyclists complying is vanishingly thin, so nothing I would worry about & in any event, no doubt lots of people genuinely do commute on c2w bikes.

On the capital allowance thing, it's two different schemes, c2w for employees & the other one applies only to directors in a business, I brought it up only to highlight the disparity between the schemes. The one for directors is disproportionately generous imo, despite me benefiting directly from it.
 
RustyMTB said:
Yes, business use only, however as you helpfully point out


The c2w scheme is abused & they're probably realising it. What seems reasonable to someone can still easily be a breach of the rules as well as the intention. Not moralising, mine bought under the director's scheme would be hard to justify, given I work from home. All of which should help the taxman with their enquiries.
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The scheme where I work is capped at £1k, it did go up to £4k briefly, but anyway.

I was surprised to find when I read the details that despite the name there is actually only ‘guidance’ around using it for 50% of commuting to and from work and nobody will check anyway.

I expect if it’s a small firm and the company finance manager signed it off, there may well be a ‘why are you not riding that bike we got you through the scheme’ type chat, but I suppose the idea was to encourage cycling and it would be expensive to employ ‘C2W Police’! 😂

People selling them quickly are also falling foul of the rules as the bike doesn’t legally belong to them until they’ve purchased it either via the % disposal value per year route or the £1/nominal sum at the end of 5 or 6 years option.

That said, it seems a fairly small benefit to go after, but then the cost of the scheme to the taxpayer has also increased exponentially. It’s a lot of money to take out of UK bike shops though.
 
It's capped at £3K at my work, and I recently asked our HR if they'd consider uncapping it in line which our provider as there are no ebikes under £3K I want. No reply as yet. As such I'll probably go the V12 Finance route instead.

I've actually had two (analogue) bikes through the scheme already over the last 8 years. Both bikes are still in use today, and one was used to commute to work every day for a few years until Covid and WFH.

FFIW I only get a 20% reduction. Always thought it was odd the more you earn the more you save. Seems backwards.
 
RustyMTB said:
I don't think they've said that? Deets are thin but aiui, they're talking more about capping the limit, so kneecapping the Yeti dentists but big upping the Halfords Carrera plebs.
Click to expand...

By ‘go away’ I mean lowering the limit to ‘stop the yeti dentists spanking 5k on something shiny’. Point was bike shops are going to sell less high end bikes if they make it less tax efficient for rich people to buy bikes, which is why I’m surprised that bike shops don’t like it.

For example my lbs know that I’m going to turn up every autumn and hand them a 5k c2w voucher. I definitely wouldn’t turn up every autumn and hand them £4500cash.
 
Dax said:
By ‘go away’ I mean lowering the limit to ‘stop the yeti dentists spanking 5k on something shiny’. Point was bike shops are going to sell less high end bikes if they make it less tax efficient for rich people to buy bikes, which is why I’m surprised that bike shops don’t like it.

For example my lbs know that I’m going to turn up every autumn and hand them a 5k c2w voucher. I definitely wouldn’t turn up every autumn and hand them £4500cash.
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I think some shops don't like as they have to pay an admin fee on all C2W purchases, which some of them pass onto the customer.
 
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