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just had a nice 1 hr loop on my lunchbreak on my c2w, my morale compass is refuelled.
in all seriousness is it not better for the government to give Mr Z a small incentive to keep fit.
-the bike shop keeps trading (tax & nicer place to live, ie avoiding boarded up windows, crime from bored jobless youth.), keeps staff employed paying tax and NI and avoiding dole/UC
-government get 20% VAT on sale.
- NHS less demand/cost from a fitter society, how many health issues are a direct result of obesity, lack of fitness etc.
It could be done much more cleverly – No VAT on ‘utility’ bikes, with some qualifying criteria to stop abuse.
I agree it would be better as a universal tax break, but I'd suggest making it as simple as possible.
Something like no VAT up to £1k or £2k for any bikes. With VAT chargeable on any amount above that.
And no VAT on E-bikes up to £3k or 4k - or whatever is deemed appropriate.
As a former company director, my accountant advised against setting up a C2W purchase when I worked from home. Which was fine by me at the time.
Now the wellbeing aspect of cycling is more widely understood, I feel it may be more justifiable to widen the scope of the scheme (or equivalent VAT break).
just had a nice 1 hr loop on my lunchbreak on my c2w, my morale compass is refuelled.
in all seriousness is it not better for the government to give Mr Z a small incentive to keep fit.
-the bike shop keeps trading (tax & nicer place to live, ie avoiding boarded up windows, crime from bored jobless youth.), keeps staff employed paying tax and NI and avoiding dole/UC
-government get 20% VAT on sale.
– NHS less demand/cost from a fitter society, how many health issues are a direct result of obesity, lack of fitness etc.
That would be fine, but bizarre to make it for, and only for, bikes. For that to be justified you need to make it for any 'tool' required for a healthy pursuit. Every single one.
If that sounds like a good thing to you (and it does sound amazeballs) what would you like to see have it's funding cut to balance the loss of government income.
Or would you rather it just stays with your little niche? And if so, how do you justify that apart from selfish needs/wants?
You also appear to be limiting bikes to those with disabilities or special requirements.
Yes, very draft criteria that would need a load of refinement - including all adapted cycles for a start.
Something like no VAT up to £1k or £2k for any bikes. With VAT chargeable on any amount above that. and no VAT on E-bikes up to £3k or 4k – or whatever is deemed appropriate.
I thought of that, but I'm not sure something can be part VATable (cant think of anything else that is.
VAT removed from bikes that are obviously and significantly a mode of transport from A to B. Forget about if A and B are home and work but the purpose of the journey is getting to B rather than the leisure pursuit of the bit in between. The sort of bike you’d expect to ride in the clothes you’d do whatever you are planning to do at B in. Your classic dutch bike or a cargo bike. Electric or conventional.
Thats' exactly what I was trying to get to. Yes, theres a public health argument benefit in more people cycling but why only one form of sport equipment. Why not tennis racquets? or skis? And then where do you stop? No VAT on anything sold by Decathlon?
No VAT on anything sold by Decathlon?
Well, utility transport has a higher social value than - for example - javelin throwing.
But I acknowledge it wouldn't be fair to proceed with a blanket VAT break just for leisure-use bikes.
Perhaps a lower "healthy VAT" rate for sports goods? This principle may be applicable to other areas of desired behaviour change.
but not full length, or a dynamo light as i prefer using something that actually works and doesn’t weigh a ton
and the other objective (again, not sure dynamo is the right thing) is to use policy to encourage more *useful* bikes to be sold in the UK. I commuted for 15 years on mountain bikes with seat post mounted mudguards and it was a revelation finally riding a bike with full length mudguards. Once you start riding in normal clothes you realise just how antisocial all the people who don't have them are. Riding behind someone without you end up covered in road filth.
Also, because so many bikes in the Uk are so unsuitable for the purpose sold - it is genuinely difficult to buy a bike with guards/rack/lights fitted - people are put off. Because (once you've had a dynamo) battery lights are more faff - both to take on and off and to remember to charge. and because when it's wet and they're crappy mudguards dont' stop the spray they decide they can't ride to work in winter.
Give adult in the UK a Brompton with a front bag and dynamo lights and you'll change the world.
Rant over.
Once you start riding in normal clothes you realise just how antisocial all the people who don’t have them are. Riding behind someone without you end up covered in road filth.
Unless you are on a club ride this isn't an issue, because if you are getting sprayed by someone's back wheel, you are too close. Especially if it's someone you don't know.
But I acknowledge it wouldn’t be fair to proceed with a blanket VAT break just for leisure-use bikes.
Several people on here seem to be thinking of this from a starting point of bikes = sport/leisure, and not bikes = transport? Surely we should be trying to equate this with other tax breaks for other modes of commuting, and not trying to compare with playing tennis, just because that equipment gets sold in the same shop?
Unless you are on a club ride this isn’t an issue, because if you are getting sprayed by someone’s back wheel, you are too close. Especially if it’s someone you don’t know.
I'm not sure how that works on a busy London cycleway, or when someone overtakes you and pulls back in in front. Road filth easily carries a few bike lengths in any case.
the government squander enough of my income, i am content to accept the c2w and take the taxable BIK on the residual value. my company c2w scheme is max £1k and then income tax on 25% of residual value.
hence a 20% tax payer saves £200 and then has to pay £50 (£1k x 0.25% = £250 * 20% tax) on BIK,
so thats £150 saving. High rate saves £300 on a Grand bike.
I have friends who pay very low rates of tax on company dividends, that's not exactly fair for PAYE employees. how do you feel about that?
how do you feel about that?
That its a very different issue to there being no cycle to work scheme for low paid workers who would benefit most from it.
I'm with @convert on this.
The first clue is in the name of the scheme - so many if these bikes have never been near the workplace, nor are they really suitable for the journey.
Secondly, the imbalance against lower earners is completely counterproductive.
This comes up again and again!
The rules are & have always been pretty clear.
As I understand it...
It’s supposed to be for bikes that are actually used to get you to work on, and things you need to do that on that bike.
You’re supposed to use it for that more than anything else. You don’t own it til the end of the agreed period, work do. And you are supposed to pay them the fair market value if you want it at the end of that period.
You can’t agree that fair value in advance.
If you actually try to work out the numbers on that it’s scarcely worth doing it, especially since you usually miss out on discounts or sales.
Now the big hand wavy bit.
No one does that. They know/read/could-read-but-don’t-bother the rules, and pretend it’s ok. Mostly because no one checks.
The pretend it’s ok, citing the fact that no one checks to make it ok.
You’ve claimed a tax rebate but not complied with the requirements.
It’s far worse when you look at the inequity as discussed above.
Someone with a couple of kids, earning 55k, can get a 4K trail bike practically for free once the tax and child benefit are considered. And never ride it to work. Or pay for it at the end of the period.
Matey who really needs the bike because I it’s a long walk but busses are pricey (for example) to his low paid job gets nothing but could use it everyday.
Lots will squawk at me for saying this and have lots to say to justify the several bikes that the bought, but IMO it’s just not ok.
Bringing other tax inequities in to it (of which there are many) is beside the point, irrelevant and you can have your own thread for those you feel strongly about.
Completely agree with the fact that it is totally unfair that low waged can't use it. Completely stupid.
"We know your salary is so low that you can barely survive. So we're going to enforce rigid rules to supposedly 'protect' that wage, but that actually make you worse off"
It's completely wrong, and unfair, but it's everywhere across the system.
Mmmm 40% tax rebate for pensions, yes please
Ditto childcare vultures
sharesave schemes... If I have fifty quid a month to splash on company shares then the employer will match that. Taken from pre tax pay.... Ooh yes please. £100 of shares for £30. Meanwhile if you don't have fiddy quid free each month you get sod all.
As others say, it's not fair, but that's what employee benefits are about, same with pension top ups, healthcare, company cars, company equipment, etc, etc, they are benefits that require input from the employee, against the set output (tax/NIC/etc), so will always be more beneficial to those at the higher end of the pay scale, it's why i know a lot of high earners push as much as they can into pensions and other benefits, as they offset some of this through money they would never see.
I think a few are trying to turn this one employee benefit into more than what it is, VAT is something the government set and any changes would require justification and approval, same with benefits being open to those at the lower end of the salary scales, i'm not sure why it's in place, but to counter it, if the government wanted to show a push towards healthier modes of transport, you'd expect a bursary or something to assist, they did the 50 quid repair thing, why not a 300/500 scheme for a bike, take tax/vat off and it's not a huge amount in the end for them.
Although after reading a bit into the halfords scheme, i would dare say the government could take some of the 'commission' out of C2W and put it in a pot to fund some type of cycle bursary or fund for the above, 15% i read for halfords, if someone buys a 4k bike from somewhere, that's 600 quid for issuing a letter!
I work for a large corporate, they have just started enforcing this. People joining the scheme from 1st Jan are having their vouchers cancelled if they are working from home.
WRT an FD being less than enthusiastic about stumping up £3-£5k of credit for your new toy, there's also the possibility that the comapny finances / cashflow situation during covid is a bit tight.....
As a former company director, my accountant advised against setting up a C2W purchase when I worked from home. Which was fine by me at the time.
What they should've advised you to do was get the company to buy the bike (and claim back the VAT).
That's it. Company buys it, owns it, maintains it and then sells/disposes of it. You ride it.
Saves VAT, Corp Tax, Employee NI, Employer NI and PAYE tax.
I work for a large corporate, they have just started enforcing this. People joining the scheme from 1st Jan are having their vouchers cancelled if they are working from home.
Is that wfh as in that's what is now in their contract to be continued after the pandemic or wft as in because of lockdown as an emergency short term measure?
Mine was allowed through but as a teacher I guess I'll be one of the first people commuting again before too long. Strangely they rigidly stuck to their 2 weeks once a year window to use it. With cashflow a potential issue you'd have thought they would have punted it down the road a couple of months until the commuting was possible.
These are people temporarily WFH due to lockdown, not contracted to WFH.
Looks like some HR bod has decided that suspending the scheme is appropriate. Hard to argue against really, but possible sign of things tightening on this in general.
Tax inequalities are rife and yes the little man gets screwed over by UK PLC, and in much bigger ways than bikes.
That aside, how do I get a voucher for stuff rather than a full bike? Does that apply to all cycle schemes or just some? My work uses Caboodle and it only talks about full bikes.
FWIW for those who want to make moral judgements, I ride my bike every single day to work and have never used the scheme.
FWIW for those who want to make moral judgements, I ride my bike every single day to work and have never used the scheme.
Yeah, but you're riding the wrong bike. (If you believe some of the crap above. 😀 )
Yeah, but you’re riding the wrong bike. (If you believe some of the crap above. 😀 )
So... I should buy another one?
I got fed up of riding my nice bike rarely and riding a rubbish bike all the time. So my commuter is pretty posh these days.
I am the sort of person that should benefit from the scheme really. I regularly ride to work but want a nice bike to do that on, 40% tax bracket. I'm just an idiot not to have taken advantage, basically.
That aside, how do I get a voucher for stuff rather than a full bike? Does that apply to all cycle schemes or just some? My work uses Caboodle and it only talks about full bikes.
This would be useful to know. The company I work for has a pitiful 1k limit, but I could get another battery for my kenevo with that. For when I ride it to work, of course.
You must buy a bike, and then you can top it up with accessories, i believe all C2W schemes are for bike purchases, with accessories to assist those brand new to have all safety related equipment.
Well I've just got a voucher sorted today for components as opposed to a bike as I'm repairing my commuter. This all came about as the repair bill was getting a touch large for a 9year old single speed and I joked I should have just gone C2W to the shop. Was then advised to look at the scheme, and bingo I could request a vouch for accessories and not a bike.
I pushed hard for a scheme 10years ago at an old work place, they dragged their feet and I ended up buying my own bike two months before they introduced the scheme... I haven't needed to replace the commuter since but have spent a fortune in maintaining it. Wish I'd looked at this sooner, as I've come to love the old commuter and C2W just seemed to be for new shiny stuff.
Also I've noticed we have a £10k limit.... cor blimey you can tell my directors cycle :-). I may be commuting on a shiny new full suss next year!
Unfortunately most schemes (i think all) have a list of exclusions, which basically includes all the bits to build a bike, accessories is quite a short list including helmets, safety gear, lights, etc.
I dare say some shops might do a deal with the vouchers though, but that's another exclusion, same with 'topping up' vouchers and so on.
You also might want to look at the scheme if you want to use it again in a year, usually you have to wait for the current scheme to end, which is not the end of the 12 month 'rental' period, but the actual period you then extend the rental for, i.e. 4 years or whatever.