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The buying public certainly didn’t feel the benefit, we very rarely do.
Agreed. But tax advantages (eg a VAT cut) would help small UK retailers and manufacturers if targeted correctly... it probably wouldn't help consumers price wise (well, it would for about 6 months while there's the initial fuss). It could be about re-targeting the current tax allowance to favour LBS an UK builders... and remove the need for "schemes" to take a cut administrating the tax break... the current system is much more wide ranging in terms of where sales are stimulated and has a growing overhead cost for the retailer. Oh, and the current system does stimulate sales... so if it did get taken away... small sellers would absolute need something targeted at them to survive its withdrawal.
A VAT reduction would go into the manufacture / distributor pocket.
If the VAT cut (or any other tax break) was targeted at smaller retailers, then for manufactures/distributors to get some of that advantage it would be in their interests to support sales though smaller retailers. It could still mean an advantage for small indy bike shops... that they need. The current tax break is spread across all retailers, with a (seemingly ever increasing) chunk of the money from the sales going to the administrating schemes.
Cyclescheme is both the biggest and since December is requiring shops to sell at ticket price only.
Price fixing is illegal I think. It sounds like a anti competitive practice penalising consumers.
Never commuted on any of the bikes I have bought on C2W. Would never have bought a CX or road bike without it. All have been heavily discounted also before purchase. Wife used the GCI schem to buy me an ebike. Would not have one without the scheme. That is about £6 of sales that probably would never have happened. Somebody must have made profit.
Guilty of trying to take the piss also, had rejected claims for a smart turbo trainer and a kids bike. Fox 38s went through ok though.
But also know quite a few people who have bought their first post childhood bike with the scheme. Does it really matter what it’s called if people are getting about with a car?
@munrobiker and @sharkattack check out http://www.pickwickbc.org.uk/ for some amusement!
My company is very cycle-friendly. I bought two bikes over the past 20 years, none for ten years. Then even rode it to work. Ok a bit high end (Defy Advanced SL), but it’s been into the 500-space bike car park a few times. Next will either be a Brompton - aren’t they all bike to work and no cash discount, or a new track bike. That will be a bike AT work, as I’m moving to an office closer to the velodrome 🤣.
Cyclists where I work have their main bike on C2W, and this bike never comes to work. They commute on old basic bikes, bus/train, or drive.
Pretty much all of them men 45-60 well into higher rate tax bracket getting a nice subsidy for £5k road bikes.
It's not really price fixing - it's just Cyclescheme stopping bike shops from increasing the advertised price to cover the admin cost of taking payment via that payment method.
I would normally say that taking payment via any method is an overhead that businesses should factor into their pricing and business model but C2W schemes are not really comparable to other payment methods like card, PayPal etc.
- Fees are much higher for retailers (5-15% rather than 1-5% for debit, credit, or PayPal etc.)
- C2W usually involves more contact with the customer to sort the voucher, so there's a higher staff cost per sale. Then there's processing the payment which involves redeeming a voucher via a manual process
- Taking card payment and Paypal are far more automated and retailers get the funds very quickly, whereas depending on scheme providers, payment can take weeks/months which isn't good for cashflow and another faff to plan for
For retailers, C2W schemes are much more faff than other payment methods and also far more expensive. But they're obviously good for consumers and do help drive sales.
It's a shame there isn't more competition amongst scheme providers, as most people are at the mercy of their HR departments chosen provider, which is usually Cycle scheme or Halfords. From an employer perspective, both are pretty easy to work with and integrate with payroll quite well to be fair.
I tried to get my employer to switch over to green commute initiative, but the payroll team didn't like how manual their process was compared to Cyclescheme.
If the VAT cut (or any other tax break)
Cycle to work was introduced to get people on their bikes by reducing entry cost, its not a scheme to help small business.
If the end user isn't getting a discount where's the incentive to buy?
Cycle to work was introduced to get people on their bikes by reducing entry cost, its not a scheme to help small business.
And for a time it did a great job. Now it’s become as much a tax break for cycling enthusiasts as anything else. That’s fine, but now, getting new people on bikes and keeping what’s left of our LBS go hand in hand. I was just suggesting that if C2W was to end, I’d like to see any replacement tax break changed to focus on independents and remove the need for administration schemes. It would be good if it also removed the need for a permanent employer in this age of the gig economy and shorter term contracts.
If the end user isn’t getting a discount where’s the incentive to buy?
There would likely be a discount, but it wouldn’t be the full amount of the tax break. Arguably that’s now the case with the current tax break anyway, due to the increasing cost of using the schemes.
Flipside to it is how much % of sales uplift (in terms of time, manpower, resource, pitch materials etc etc) would it cost LBS's to go round pitching large employers and getting them to see they can set up their own schemes, then administering it? What would the sales cycle look like, how long from initial contact to onboarding, then first order?
I don't work for any cycle scheme but I do wonder if the bike shops have actually thought about the work front loaded in winning new customers for them - and then what are these shops doing to create lifetime customer value once they're introduced by the scheme?
I’ve had various bikes and components over the years on cycle to work and with the tax breaks I’ve had a healthy discount. <br />Some of the bikes have been used for commuting but lots of the stuff hasn’t, I’m still amazed that I managed to get a Thule towbar carrier on the scheme!
If it weren’t for cycle to work, I’d probably not bought half of these things so it’s certainly driving some sales for the bike shops. <br /><br />No matter what the scheme or how it runs, people will never be happy. It’s either going to be high rate taxpayers who get smaller discounts, NMW earners who can’t access the scheme or bike shops who aren’t making as much as the pay want to make. Whichever form it continues in, if it does continue, I’ll happily keep using and abusing the scheme to benefit myself as much as I can. I may as well get some perk out of the tax system!
Interesting to hear from the shop owners / industry folk on here.
Seems that a change is in order. I knew they took a good chunk, but 15% seems excessive. Surely like a pension scheme this would be better to have a cap on fees as a scheme provider?
I also agree that it unfairly benefits higher rate tax payers and those in Scotland.
Flipside to it is how much % of sales uplift (in terms of time, manpower, resource, pitch materials etc etc) would it cost LBS’s to go round pitching large employers and getting them to see they can set up their own schemes, then administering it? What would the sales cycle look like, how long from initial contact to onboarding, then first order?
I don’t work for any cycle scheme but I do wonder if the bike shops have actually thought about the work front loaded in winning new customers for them – and then what are these shops doing to create lifetime customer value once they’re introduced by the scheme?
That is exactly what Edinburgh Bicycle Co-op did back when I worked there as a student in 2006-2010ish - they worked directly with a number of large local employers, focusing on the Public Sector. No middle man involved at all. EBC are not a tiny LBS, but also they are not a huge company either(funnily enough, a very similar kind of setup to JE James I reckon) so its not impossible.
Everyone who worked in a school, hopsital, council office, emergency service etc in the entire city area (so thousands and thousands of people) came to them for a bike-to-work deal, and it was massively, massively popular. Shop was doing well. Customers were getting brilliant deals. Many, many non-cyclists became cyclists and repeat customers.
Has anyone actually read the T&Cs on their cycle to work scheme? Mine said that you don't actually own the bike and you are supposed to pay a final payment based that reduces the longer you have the bike. I always wonder if a company went bump whether their receivers would ever come looking for this money.
I've only used it once before, and Halfords were brilliant in buying in a brand they don't normally stock and then giving me £100 to spend on accessories. Worked out well as I could buy a decent bike for under £1k in 2015, not so much now. My company's limit is still £1k so not really worth using it. I'm well jealous of the folk's companies with £5k limits
How about the government work with some design graduates and bike companies to come up with some commuter bike designs that you can get through a non profit government backed cycle-work scheme.
We don't want a cycling version of the old NHS glasses, but I think this could be an innovative and interesting way to move the scheme to be more relevant.
How about a hub geared ebike with cargo racks?
Edit: this looks fun.
How about the government work with some design graduates and bike companies to come up with some commuter bike designs that you can get through a non profit government backed cycle-work scheme.
Way too many variables.
Trying for one size fits all (or even a small selection) is not a good way to encourage the uptake of transport cycling.
Whats the point in it?
Why don't employers tell their employees go buy a bike and bring us the reciept.
Then refund the employee as an expense and deduct pay every month?
Could be done before the credit card bill comes.
Whats the point in it?Why don’t employers tell their employees go buy a bike and bring us the reciept.
Then refund the employee as an expense and deduct pay every month?
When I've bought a bike to work bike (which I actually bike to work on), this is just how I've done it.
Whats the point in it?Why don’t employers tell their employees go buy a bike and bring us the reciept.
Then refund the employee as an expense and deduct pay every month?
Because it's not an expense. Also it becomes hard work for HR / payroll to keep track of and it relies on the employee being able to stump up £2000 for a bike up front which C2W does not. There's probably some tax implications in there as well but I don't know enough about that area.
Bought my commuter frame direct, bought all the parts via a C2W voucher. Also bought entire bikes on the past.
TBH I feel like playing a very small violin here. All these middle managers with disposal income that get slagged off are PAYE employees who pay tax on pretty much everything, with very little recourse to any other method of minimising their tax burden.
TBH I feel like playing a very small violin here. All these middle managers with disposal income that get slagged off are PAYE employees who pay tax on pretty much everything, with very little recourse to any other method of minimising their tax burden.
100% this. I've had it myself, and thats why, as per my earlier post, I have absolutely zero guilt about buying a bike ( a frame, in fact) which will never be used to commute on. Particularly ironic when the slagging off comes from the self employed!
As a PAYE employee its just about the only 'trick' I have available to me - why wouldnt I!?
Particularly ironic when the slagging off comes from the self employed!
I'll slag off tax evasion and I'm not self employed. And even when I was, I didn't dodge tax, I paid myself my required actual wage in PAYE then only took the extra as bonus (still taxed). I could get a bike on C2W but I don't, because it's tax evasion, so there 🙂
why wouldnt I!?
Oh, I dunno - integrity?
You might want to educate yourself on the difference between tax evasion and tax avoidance.
As for avoidance get off your high horse if you’ve got a pension or an ISA.
If the idea was to encourage more cycling for the health benefits which help the country as a whole then a scheme which disproportionately benefits higher rate taxpayers and doesn't help huge parts of the population seems like a failure. Zero rate VAT on bikes under £1000. Retailers would compete to offer good spec bikes at that price point.
Financed, if required, over 2 years the cost would be affordable to anyone. Anyone who was using it to replace a commute by bus or train would cover the payments in fewer fares even if they didn't ride to work every day
It’s evasion if the bike isn’t primarily used for cycling to work.
It’s evasion if the bike isn’t primarily used for cycling to work.
Wait until you find out about company cars and perks such as free parking spaces, coffee and refreshments in the office...let alone alcohol on the company expenses...
my wife and bought a bike each on the scheme this year, the place we ended up buying from seemed very happy with the sales. Without the scheme i doubt we would have bought such expensive bikes or if both of us would have bought new bikes
one thing that happened that was weird was that a main dealer for specialised told me that as i was buying using a cycle to work voucher i couldnt have the end of season discount that specialized was offering. This would have meant that instead of getting the 40% off i would have had to pay full RRP...
I tried another ( non specalized dealer) and they were happy to sell me the bike at the manufacturer discounted rate. I appreciate that the schemes take money from the sale but certainly not 40% - i suspect that the dealer was either trying it on or mis understood how the c2w schemes work ?
Not saying it’s hugely serious, but people were talking about evasion vs avoidance and if it’s not for commuting it’s the former
This very much feels like punching down. It's not as if the PAYE employee on basic tax is running a pick up with half tonne payload, or a PHEV in name only as a tax avoidance vehicle. A little perspective would be welcome
This very much feels like punching down. It’s not as if the PAYE employee on basic tax is running a pick up with half tonne payload, or a PHEV in name only as a tax avoidance vehicle. A little perspective would be welcome
I remember feeling a bit Annoyed when I did cycle to work, without access to a cycle to work scheme whilst my much better paid friend was explaining how cheap he could buy another MTB to barely use, let alone commute on.
Then I thought Meh it’s just jealousy. My commute costs are zero as I went back to keeping the work van at home and the office isn’t a sensible cycle away anymore.
I agree about perspective and which evaders to get excited about, but personally I struggle to be selective about what tax evasion is acceptable. ISAs and pensions are tax breaks to encourage people to save, which I do. C2W is not a tax break for the middle classes to buy toys, so I don't. Maybe I should just minimise the tax I pay using whatever means I can get away with.
I get the essence of the punching down point. The higher rate threshold is £50k, remember there's plenty of people earning much less than that who can punch up at people in the same tax bracket as themselves. Those are the people they see and can relate to as playing the same game as themselves. Punching a long way up at millionaires and corporations is a bit abstract.
I know of people who are self employed who set up a company to buy their e-bikes for them on a cycle to work scheme.
Needless to say, they don’t even cycle to work.
I remember seeing an article a few years ago saying cyclescheme had reduced their admin fee to 10% of sale value capped at £300.
I can’t comment on margins and whether it’s appropriate to do this for full price bikes but for anything on sale why not just offer the sale price plus the admin fee cost so it works out the same as if the customer hadn’t used c2w?
C2W is not a tax break for the middle classes to buy toys
But perhaps it is a tax break to encourage people to invest in their health and sustainable transport. Even if the bike they buy is wildly unsuitable for commuting, it's still motivating people to cycle.
This is all very strange to me. Why is the customer being blamed for taking the cheapest procurement option in a competitive market?
Maybe I have missed the thread complaining about people buying Gregg's sausage rolls versus alternatives that are kept warm?
The last bike I bought, the shop insisted I paid an additional £300 to cover the Cyclesheme fees. I can't remember details but I believe this was their policy for all Cyclescheme purchases above a certain value. They were the only shop with the bike I wanted in stock and it was heavily reduced so I didn't question.
I was very much taking advantage of a "tax break for the middle classes to buy toys" as it was a £5k MTB that I'd have not bought otherwise.
The last bike I bought, the shop insisted I paid an additional £300 to cover the Cyclesheme fees. I can’t remember details but I believe this was their policy for all Cyclescheme purchases above a certain value. They were the only shop with the bike I wanted in stock and it was heavily reduced so I didn’t question.
Cyclescheme has recently imposed a new contract on its shop network (by means of a default termination of your relationship with them if you don't agree to the new contract) which means they are no longer allowed to charge anything for your cert, nor refuse to sell you something on sale.
That’s very interesting to hear. I’m surprised details of this weren’t published in OP’s article as that seems very unreasonable and a valid reason for bike shops to be complaining to parliament.
That’s very interesting to hear. I’m surprised details of this weren’t published in OP’s article as that seems very unreasonable and a valid reason for bike shops to be complaining to parliament.
Agreed, this little fact changes everything and should have been in the article. I wasn't aware when I commented above.
I don't get why that isn't just "we won't accept cyclescheme. Use one of the others."
I mean, either it's wildly unprofitable for them, and so losing it makes no odds, or they derive some benefit from the additional business it generates.
I don't think the fees that cyclescheme charges are justified, but it seems a bit of a stretch to say "sucking the lifeblood out of bike shops".