It looks as if the Cycle to Work Scheme is going to be targeted in the up and coming budget, reducing the total spend allowable & trying to bring it back to providing financial assistance for commuters rather than for high-end non-commuter bikes.
It's liable to have an impact on the struggling bike industry as a whole I suspect.
I was just saying last week to a mate that I’m amazed they’ve not mentioned scrapping or capping it yet. I was so sure they were going to change it in the budget that I just placed an order last week for a load of stuff to get in there before the budget, just in case!
It might be the first time in my life I’ve correctly predicted something.
Does that mean the RRP of bikes will reduce by 50% over night ?
trying to bring it back to providing financial assistance for commuters rather than for high-end non-commuter bikes.
The whole way it's set up almost prevents that in the first place.
You can't use it if you're on minimum wage or if you're self employed, it disproportionately benefits higher rate tax payers so it's hardly surprising that many people are bending the rules on it a bit while the people it's supposed to support can't access it in the first place.
It's also been hijacked by half a dozen different firms all providing their version of it and skimming their take off the top. Definitely needs a shake up but capping the amount available is not the way, that just makes it more difficult to buy an e-bike which is what the majority of commuters will want.
From the article above:
One government figure told the newspaper: “Cycle to work should be about helping ordinary commuters switch to greener travel, not giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills. Taxpayers shouldn’t be footing the bill for luxury leisure.”
Basically echoes my opinions on the matter. While I don’t agree with everything that “Rachel from accounts” says or does, I am basically onboard with this despite it’s unpopularity with the N+1 crowd…
[braces for onslaught of opinions]
Quite right to cap, but needs to be open to those on the minimum wage.
Taxpayers shouldn’t be footing the bill for luxury leisure.”
Wait until they hear about Benefit In Kind and salary sacrifice on cars! And no-one asks if you're using that solely for commuting...
Actually it's insane, I could have got a £50000 car on a 4 year finance / salary sacrifice scheme with no questions asked but the hoops I had to jump through to get a £5000 bike on a 1-year term were way more onerous.
Glad I got it through before the budget.
Remember when C2W was a relatively new concept and Boardman made a point of selling several bikes (road, MTB and hybrid IIRC) that came in at or under the £1k cap with pretty reasonable specs? Those things were everywhere in the 2000-2010s…
The industry can cut its cloth to suit the environment, those that can’t fail unfortunately. But also we shouldn’t be propping up an entire sector with a tax break for a quarter of a century.
Wait until they hear about Benefit In Kind and salary sacrifice on cars! And no-one asks if you're using that solely for commuting...
We’ve got one of those schemes at work. You can get life’s essentials on it like Apple Watches and £6k sofas. The bit I can’t quite get my head around is that these items bought on the salary sacrifice scheme cost way more than to just buy them in the shop. There absolutely no financial benefit to using them.
I think that is fair enough, but no reference in the article to what the new limit will be. I could really do with knowing that as I was planning to get a new commuter bike, probably around the £3k price. Not really in a position to order right now but, if I thought limit was going to drop below that, I would try and get something sorted super quick.
I've always found the scheme laughable when someone on £60k or £80k+ (and often moaning about benefits scroungers) gets themselves a nice new £5k bike with a hefty discount that never ever gets ridden to their place of work.
I assume the tax breaks on cars will similarly be cut? oh of course not........
There absolutely no financial benefit to using them.
There is if it's a choice between using that or going to one of the payday lenders charging you 99.9% interest and late payment fees!
Capping C2W is a stupid idea. Back when it was set up, £1000 would buy you a really decent bike. £1000 now barely scratches the surface, certainly doesn't get you a decent e-bike. So you need a scheme with a high limit (£6000 or so) but something that is open to the self-employed, low wage, and even WFH. You could WFH but do client visits for example. Technically C2W doesn't cover that because the "main use" of the bike should be riding to and from your place of work.
I worked for a council for a while, they had C2W (the usual shite, £1000 limit, must use Halfords etc) and they were so terrified of being seen as providing a perk to their employees that they had an extra clause all of their own. Must use it to ride to work a minimum of 3 days per week. This was post-Covid where the office had been downsized so much that no-one did more than 2 days in. Ludicrous.
Naturally the car sacrifice scheme had no such conditions.
I wouldn’t be that surprised to see all salary sacrifice schemes abolished (or more technically- subject to tax) over the life of this parliament. It’s a way to increase tax without seeming to break manifesto commitments, is at least superficially “progressive” and might actually buy them some credit from those who don’t look beyond headlines. Except for pensions all of them seem to have created an artificial market which actually dilutes the value the incentive was designed for.
The point of cycle to work was to encourage people to, you know, cycle. To work.
Nobody needs a 6k bike for that. A quick look on Halfords and 1500 quid will get you anything from a carbon framed Tiagra Hydro disc road bike to a Carrera E bike to a Grx alloy gravel bike. If none of those will get you to work work you need to re enter the real world.
The scheme is broken. It should not favour the higher tax bracket earners, it's totally arse about face, they do not need access to it, it should be heavily weighted to lower earners. It needs a total rethink.
Absolutely agree about the minimum wage barrier; it's disgraceful that it's not been addressed to remove an obstacle for a huge number of people who could benefit massively.
There are a few decent points made in this article: https://www.cyclinguk.org/blog/how-fix-cycle-work-scheme
I think the general point is that the scheme is not being used for what it was designed - providing people with discounted bikes for using to ride to work in order to increase general health and cut car usage (or if it is, the people using it for that are a vanishingly small proportion of the overall users). So it's perfectly reasonable that it's cut or scrapped, and I say that as a two-time beneficiary. It's been a lark for a while but the game's up.
As for other salary sacrifice schemes, there seems to be a bit of a misunderstanding here of how they work. For many of them you do pay tax on them as a perk, that's exactly what Benefit In Kind taxation is.
People who think you need to spend over £1K to get a bike that you can ride to work are in an entitled place.
Drop it down to £1,000 and ensure it gets used for actually riding to work. All of these dodgy tax breaks that only higher earners can benefit from need to go as they just promote inequality.
IMO the whole salary sacrifice benefits scheme for all things, not just C2W bikes, needs looking at... Those earning the most making greater savings, on often essential luxury goods/services is dodgy as hell, while those earning near minimum wage are extremely limited to what they can do on the scheme because their take home pay must still be at least minimum wage.
There is currently an MP brave enough to face and admit the real changes that need making to the tax system overall, cutting little bits around the edges (C2W) might keep a few of the RW press happy but overall it makes little difference.
Across the UK how many people use the C2W scheme compared with those that have car allowances and 45p per mile claim backs?
Hands up, I've had both.
More money to be saved via car tax changes but the daily heil and its war on the motorist lobby won't let those things happen because MP's fear a front page.
It's also been hijacked by half a dozen different firms all providing their version of it and skimming their take off the top.
as with so so many govt. schemes. The boss of the govt. funded Motability Scheme earns £750k for selling cars by set rules to captured consumers. At least it’s down from approx. £4m a few years ago, staggering.
Trough
Snout
But I do get some changes to C2W et al are overdue. There will be impacts though as less of the more pricey emtbs get sold, the price, I expect, will go up.
giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills
That's £4k after the tax saving, I assume
People who think you need to spend over £1K to get a bike that you can ride to work are in an entitled place.
I would have agreed with this in the past, but as crazy legs pointed out early on - commuter eebs could be genuinely useful for a lot of people.
Across the UK how many people use the C2W scheme compared with those that have car allowances and 45p per mile claim backs?
Tne car allowance is to cover cost of performing a business related activity in your own car (depreciation, insurance, petrol, diesel, VED and the multitude of taxes within). It’s hardly a tax break is it but you could happily forgo and not claim it back?
C2W on the other hand is not delivering what it intended. It’s a subsidy for the better off to get expensive bikes (£3k for a commuter bike) at a huge discount and save on NI for employers (which is why companies participate).
A better alternative would be a voucher contribution for the low paid towards a bike either new or secondhand.
I'll be absolutely fuming if they put a cap on it. I've recently moved companies and this is the first one I've worked at that have offered C2W with a decent (5k) budget. Was planning to finally get an ebike in January following probation sign off when the scheme is opened up to me as an employee
Have spent the past 4 months getting really excited to finally replace my nearly 11 year old specialized enduro with a new orbea wild eeb and biding my time for it, honestly, as someone who voted for labour 18 months ago, they've done nothing that has directly benefitted me or improved my QoL, all I see is taxes going up, CoL going up, economy getting worse, benefits of being a higher earner worse which lets be honest, 50k salary today is what 30k was 10 years ago, morale slowing down, growth down, everything seems way worse than it was under the tories and even they were corrupt to the core, first and last time they got my vote, honestly.
I only used C2W once, and that was when it had the £1k cap, I got a set of Exposure lights and some Endura trousers from Evans.
It was back when you could buy sale stuff too and use discount codes.
I think my MaxxD and Diablo with the sale price, BC discount and C2W tax & NI breaks ended up costing me about £200...
I do agree that the original purpose of the scheme has been lost - and barriers to lower income should be removed - even if that means imposing a lower limit for minimum wage etc. - you could set limits at £1,000 and £2,000.
The scheme is a bit broken, but I think it would make more sense to taper the saving % in the opposite direction to favour low earners, or maybe cap it at basic rate as suggested above. But also:
I'd prefer to see it badged as a green travel scheme and not tied to work commuting and acknowledge the general benefits of riding more whatever the context. Working patterns are so diverse that it no longer makes sense to tie it to work commuting.
As a budget measure it's going to save a few tens of millions at best, which is peanuts. Weighed against the balance of health and travel benefits (beyond work commuting context), the net benefit of the change will be negligible. It'll certainly please some culture warriors, which is sad.
I think that is fair enough, but no reference in the article to what the new limit will be.
This is the problem with cryptic pre-briefings and bouncing ideas off public by leaking ideas to Journalists. Reinstating a sensible Cap makes sense, more importantly enabling access for lower incomes and maybe even preventing higher rate earners from accessing the scheme all together might not be bad ideas.
As for setting a suitable Cap the old inflation calculator say £1k in 1999 is £1,926.69 in 2025 money so £2k? would seem reasonable today (that would buy a very good commuter bike plus some accessories).
E-bikes might skew things a smidge they weren't really a thing 25 years ago, an E-bike for commuting (i.e. Rigid with load carrying capacity? might justifiably have a Cap of £3k(?)
But the days of people blagging £7-10k E-Dandyhorses on C2W need to end...
Well apparently a Dolan DF5 is available on bike to work! At least the one I saw on Tuesday was bought using the scheme. To be fair, my Brompton T-line is used for more than half its journeys commuting to work and was at the max allowed for our scheme. I’m happy with it too, having had to carry it folded a few times at (c)rush hour on the Elizabeth Line.
A cap of £2k would barely buy an electric Brompton. The sort of bike the scheme is aimed at. I’d restrict the TYPE of bike rather than the cap. Nobody is commuting on a DF5. Here’s one for reference.
I've had it available to me but never used it, the one time I really looked into it was when i wanted a cargo bike to transport small children - the limit at my workplace didn't go high enough as all the available cargo bikes at the time were e-bikes and thus around the £3-4k mark, so I went second hand instead.
As a budget measure it's going to save a few tens of millions at best, which is peanuts. Weighed against the balance of health and travel benefits (being work commuting context), the net benefit of the change will be negligible. It'll certainly please some culture warriors, which is sad.
Fully agree, it's going to play well with the culture war vote that labour seems to have decided is it's core. Perhaps it could be improved so that the purchased bikes are used more for travel than leisure but will the cost of enforcing that actually be worth it? As above you could limit the type of bike purchased, but I guess the question is whether the leisure bikes are getting people out exercising who otherwise would just not purchase a bike at all.
FWIW it could quite strongly effect how I commute - the new trains on the midlands mainline apparently only have 2 bike spaces when regularly we have 5+ people using the current trains. I may be forced to choose between buying an e-folder (**** riding a non-assisted folder up our hill!) or just accepting that it's far cheaper to drive even if the journey sucks.
I've just had another 5k E Bike through work. Don't intend to cycle to work on it. The bike I do cycle to work on was just bought online. As someone who has always paid all taxes though full direct employment I have zero qualms about using the system available to me when I know how much tax has been and still is *offset* by the self employed and 'company directors'. I'll start with massive shiny pick up trucks, which by some very clever government detective work have only been established as a tax fiddle, as well as being driven by total winkers.
How much revenue will it actually bring in?
Or is it a case of every little helps ?
I've used it to buy a few cheapo commuters before for about 500 quid. The only time I felt I was taking the piss was when I bought myself a time trial frameset..that definitely never got cycled to work
I personally don't have an issue with it being capped (even if I had seen an bike in my near future) as the scheme clearly benefits the richer folks in society which makes zero sense
That said, I don't see why it's getting targeted, and not the guy that is getting massive saving on a brand new luxury 60k EV
It's interesting that any conversation about tax is mainly people going "someone needs to pay more tax, but not me"
I used CTW once when it was £1k for my fixed gear commuter (when the scheme first started). £1k didn't cover it so I threw in a few hundred extra - and that wasn't a flashy spec and it had no gears. That's without rack/panniers etc. Just the bike from my LBS. That bike was sold a few years ago. I'm commuting on a 90's MTB.
Was looking at an All road, but what I want will come out above £2k
So what's happening with everyone with luxury EV's then - this is a piddle take as loads of colleagues 'leasing' new EV's on the scheme. Bit unfair when you want to spend £2500 on a bike commuter, and colleagues have £50k cars on lease.
But also we shouldn’t be propping up an entire sector with a tax break for a quarter of a century.
Yeah, we should be handing those tax breaks to foreign companies to allow them to build cars here for three or four years before relocating to the Far East! Or servers for their AI. Or nuclear power plants. Let the bike industry, what's left of it, fail - there's always Halfords.
8 years ago, a reasonably basic gravel bike for commuting, aluminium frame, hydraulic discs, cost me £1700.
For something that you’re going to use every day and for it to be reliable, you do need to spend a bit of money.
However I do also know people who’ve bought their e-mountain bikes through the cycle to work scheme, who work at a car dealership…
People who think you need to spend over £1K to get a bike that you can ride to work are in an entitled place.
A lot of people could genuinely benefit from having an e-cargo bike or a folding e-bike.
I think that's realistic rather than entitled.
I would have agreed with this in the past, but as crazy legs pointed out early on - commuter eebs could be genuinely useful for a lot of people.
So in the past people commuted on a sub £1k bike but now have to have an expensive e-bike to be able to commute.
As for cars, get rid of that too as that is another tax break for the better off only, as are most tax breaks.
Also, as far as I’m aware, the cycle to work scheme was a net saving to the country. What it costs in tax, is more than made up for in health benefits and reduced costs.
I’m not sure it matters much anyway. I suspect that Rachel Reeves is toast, and Keir Starmer is not far behind her.
Also, as far as I’m aware, the cycle to work scheme was a net saving to the country. What it costs in tax, is more than made up for in health benefits and reduced costs.
May well have been at £1,000 with people actually starting to ride a bike. People buying £6k bikes on it will most likely already be cycling so no health benefit at all. That's what happens when you move massively from the original criteria.
So in the past people commuted on a sub £1k bike but now have to have an expensive e-bike to be able to commute.
Most public hire schemes now are electric. Most people do not give the slightest flying **** about "cycling", they don't care about how many gears it's got or how much suspension travel. They just want a cheap reliable way of getting to and from work that doesn't involve car parking fees, train fares or a crowded bus.
And they don't want to arrive in a sweaty mess. E-bikes are incredible for enabling utility cycling.
So in the past people commuted on a sub £1k bike but now have to have an expensive e-bike to be able to commute.
No, there are very likely to be people who wouldn't have wanted to commute on any kind of normal bike, but who might be tempted by an eeb.
