Cycle to work scheme users - The Telegraph is after you!

Not like the Telegraph to go after rich people exploiting tax loopholes.....that they didn't close in their 14 years in power....

I think that's the first article in the Telegraph I've read that makes sense. Totally agree.

The irony and hypocrisy of one of the UK's most right wing papers coming up with a socialist takedown of the flaws in the scheme is very amusing.

Gordon Brown's loophole?? After (as MCTD says) the tories did nothing to close it in 14 years. Amazing.

I like the use of the word "shamelessly" too. Like they never maximise their tax breaks themselves.

I'm not sure if i'm a rich cyclist or a taxpayer, i think i'm both, so does that mean i'm a goodie or a baddie ?

Erm...hang on. I might be middle class, but I certainly do not get a 6 figure salary (how the fudge is that middle class BTW???) and my lycra stays firmly ensconced in baggy outerwear thank you very much. So you can stuff your rant elsewhere thanks Ben Wilkinson.

Off to polish my 3 x C2W purchased bicycles* (*not factually correct I've only had 2 (currently only 1) and both used for, checks notes, cycling to work) 

There are some reasonable questions that could be asked about C2W - AIUI the people who are on the lowest incomes (and so are most likely to be reliant on bikes/buses to get to work) aren't eligible, and I also thought it wasn't necessarily the best deal for people on 'six figure salaries'.

However, Telegraph.

"Middle class men" so no women? "lycra clad" so other forms of clothing are OK? "tearing through a red light" actually most don't. "hugely expensive bicycle" unlikely to be on C2W if its hugely expensive.

And that's just the first paragraphs. Haven't read the rest, does it become less stereotypically anti cyclist?

Apparently it is only Middle-class men on six-figure salaries who get the hatred so ladies or those of us on less than 6 figures can crack on.

PS. Imagine if they knew I could get a gym membership, pension and a car on my work salary sacrifice scheme

"I’m convinced that the salary sacrifice scheme is now routinely abused by wealthy cyclists who have no intention of using their expensive gift from the taxpayer on their commute."
"I suspect Whitehall and the City are full of top earners who have exploited this scheme to buy an expensive bike that they would not dare to bring into London for fear of it being stolen."

Sounds like he's imagined the entire thing. Why not get some data on the value of the bikes purchased?

Most people I know who used the scheme in the office, bought a reasonably priced bike intended for commuting (though often unused despite their best intentions). 

As keen cyclists be wary of selection bias when assesing the scheme. 

In an ideal world might the cycle to work scheme be different in terms if how it works? I guess it’s yes

But it’s there, with loads of people getting a bike and getting into cycling. 

So the Telegraph convinces us all it’s a terrible scheme only benefiting the rich

 That opens the door for a chancellor to make a populist decision and axe the scheme saving a few quid. Perhaps replacing it with a small pot of money for bikes for people in extreme hardship

Now Sarah can’t get a discount on a hybrid to get to her minimum wage job. Result?

That reminds me, my last one finished a few months ago. Time to go tax-free bike shopping again

Posted by: ampthill

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Now Sarah can’t get a discount on a hybrid to get to her minimum wage job. Result?

I'm fairly sure Sarah wouldn't be eligible now as the salary sacrifice would take her below minimum wage. This is one of the issues with C2W. From the Cyclescheme website:

"A salary sacrifice arrangement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rates. Employers must put procedures in place to cap salary sacrifice deduction and ensure NMW rates are maintained."

Attack is the best form of defence, for the famously tax shy Telegraph owner(s).

Posted by: ampthill

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Now Sarah can’t get a discount on a hybrid to get to her minimum wage job

unless it has changed , if you are on minimum wage you can't use a cycle to work scheme as it drops your wages below minimum wage 

Erm...hang on. I might be middle class, but I certainly do not get a 6 figure salary (how the fudge is that middle class BTW???) 

It's to perpetuate this myth of the hammered middle classes, you used to be comfortable middle class now you're the new poor - victims of champagne socialists. 

should never have been available to anyone earning in the higher tier tax bracket - but as hooli says, same view needs to be taken on cars, gym membership, childcare, pensions.  got to draw a line somewhere.

I'm not sure if i'm a rich cyclist or a taxpayer, i think i'm both, so does that mean i'm a goodie or a baddie ?

Depends on how much you're skimming C2W for surely? 

It is a bit weird to find myself aligned with the Torygraph on this, at least I get to say I called C2W out as a tax wheeze for the well off (maybe not just the "rich") before the RW meeja glommed onto it. 

I'm all for keeping C2W, but it needs caps and needs to benefit those further down the pay scales more than those with some income to spare (Which I am very much in the bracket for)... 

I’m not at all bothered about ‘rich’ people taking advantage of a tax benefit. The proportion of rich people doing it must be miniscule, and if they didnt get their bikes, more bike shops would shut, Manufacturers would scale back etc. The people pay their taxes (hopefully!), so using their benefits within the Law. These people in the article pay far more to the UK Government than me, so why cant they get a little bit back?

I thought the same with the £200 pensioners fuel payment, people complained that the ‘rich’ got it, yet the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

hmm, I use salary sacrifice to benefit my pension, to buy spare bike parts and am looking into getting a new car. Yes there is a genuine question about whether tax breaks that give more to higher rate tax payers are correct, but I am sure the Telegraph isn't interested in the whole concept.

I bought a Cotic Cascade (frame and fork) on C2W a couple of years ago. I've definitely used it to ride to work, but I've now moved offices and its too far away to cycle there or I'm on site in the middle of nowhere or working from home.

I recently bought another Frame (Cotic RocketMax) on C2W which will never be ridden to work. I've been cycling to work for probably 15 years though previous to this so I reckon I've got some retrospective benefits to cash in!!....

I'm also not a higher rate tax payer and don't ride through red lights, so I'm a goodey.

the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

Are the "rich" not net beneficiaries of the "system" already? 

Odds are their wealth is built in someway on a workforce whose basic education was provided by the state, who's health is (ideally) maintained by the NHS, who either use public transport of roads (part) funded and maintained by the state, to get to their employment where they help generate wealth (directly or indirectly) for the rich, or contribute to the smooth running of society (emergency services and central or local government), so the rich have a nice stable environment in which to operate, acquiring more assets and screwing money out of the rest of us... The rich are doing just fine, I don't think they'd miss cheap bicycles too much TBH... 

I've clambered far enough up the greasy pole that my family no longer qualifies for full child benefits and TBH I'm sort of OK with that, my income grows therefore my need of benefits and breaks should diminish proportionately, I'm not "rich" but I'm not poor, IMO Johnny stockbroker should pay the full ticket price for his Cervelo S5, we all know he can afford it several times over, I'll take one for the team and cover the cost of my own bike(s) too... 

I'd honestly feel better knowing an NHS Nurse could buy an affordable bike to get to their far more important, yet less well paid job than me and the rest of the middle-classes, or indeed the genuinely rich, who are really just scoring what amounts to a slightly better than 0% finance deal on another overpriced dandy horse for the collection... 

The Scheme simply isn't serving it's original intent and getting people with a genuine Need for a decent bike to get to/from work, people who don't have the means (disposable income) to buy one outright or on commercial credit. 

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?), and I'd maybe even rule out certain types of bike (Very few people need a carbon Enduro bike to get to work), remember in the early days when most companies were capping it at £1k? Boardman managed to rustle up some excellent VFM road and MTBs with an RRP of £999, I'd like to see that sort of thing again, Bike companies making a genuine affordable offering for real C2W punters within the  constraints of a fairer scheme... 

Dentists and Finance ****ers can sort their own funding options or find other way to be "tax efficient" I'm sure... 

Ok i didn’t know about the minimum wage thing. So I’m much more anti it now

Ok i didn’t know about the minimum wage thing. So I’m much more anti it now

The most obvious thing to do is to get rid of that rule and allow people to decide how they spend their own wages?

Posted by: cookeaa

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the rich have paid a lot more into the system than the poor, so why shouldnt they get it?

A

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?), and I'd maybe even rule out certain types of bike (Very few people need a carbon Enduro bike to get to work), remember in the early days when most companies were capping it at £1k? Boardman managed to rustle up some excellent VFM road and MTBs with an RRP of £999, I'd like to see that sort of thing again, Bike companies making a genuine affordable offering for real C2W punters within the  constraints of a fairer scheme... 

Problem with caps is that it excludes some proper utility bikes like an E-longtail, the Tern GSDs of the world that can be used for the school run. Maybe the bike category thing is a workaround for that. Less easy to exclude certain bike classes and sub genres. 

Imagine all these people using the C2W scheme to buy a bike, exercise, keep healthy and not end up needing the NHS to spend a fortune on them.  It's a disgrace! ;o)

It would be good to reduce or take VAT off cargo and utility bikes… I guess that would lead to problems with definitions and classification of bike types… 

As for the rich, the ones we need to tax and don’t,  the ones that Gary  talks about… I suspect they aren’t worried about saving a few quid on a bike. 

They're going after car schemes too right?....

Right?

Those who cycle to work to their Amazon warehouse jobs aren't on C2W bikes - they're on some £30 special they've picked up from Facebook Marketplace.

I've always thought this was a weird scheme. And if it was aimed at low waged employees there's no need for the limit to be any more than £500. That gets a very decent commuter bike.

Like most [tax] legislation, it's good intentions are offset by loopholes that benefit some that don't need it while unintentionally penalising some who need it most. 

Would be simple to tighten it and make more fit for purpose. 

A higher rate tax payer using it get a bike to rude to work - fair enough. A lower rate tax payer using it to get a nicer bike that will never be used for commuting - not what Parliament intended.

If it wasn't called cycle to work and was called bicycle salary sacrifice nobody would give a monkey's uncle! I know enough tradesmen driving lowered VW vans with tax written off that only earn £12k a year......

My only real gripe is the minimum wage thing! Always thought that is stupid.

Posted by: gowerboy

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As for the rich, the ones we need to tax and don’t,  the ones that Gary  talks about… I suspect they aren’t worried about saving a few quid on a bike. 

The rich stay rich by doing all these things to the maximum extent allowed. Being rich allows you the freedom to play around with tax breaks, investments etc and it also means you (generally) have a good credit rating so you can spread the cost of everything, shift a balance around from one card to another at 0%, get access to special offers and discounts.

All things that "the poor" don't get access to.

When I worked in a bike shop, we offered a 6-month interest-free credit option via some provider; it required all sorts of form filing, phoning through, ID checks etc (this was before widespread use of the internet). Far and away the main people going for it were the ones on salaries we could only dream of. To them, it was a perk, a bit of a wheeze, a way to play the system a bit, improve their credit rating. 

LO-F'in-L at the Torygraph talking about tax evasion. 

The Barclay brothers (or brother, now) who own it know a thing or 2 about tax avoidance. 

Fraud and tax avoidance

In 2024,The Economistreported on strong grounds that the Barclay brothers engaged in fraud and tax avoidance or evasion in relation to a deal in the 1970s that saved the brothers from bankruptcy.The Economistalso found that Frederick Barclay concealed assets from a bankruptcy court, which is a crime.^[34]

Tax exile accusation

The Guardianhas stated that the brothers aretax exiles, and although they reside, at least some of the time, in Monaco (giving Avenue de Grande Bretagne, Monte Carlo as their address) they operate their businesses from an office in the United Kingdom.^[30][35]When asked if he was a tax exile, Frederick stated that he lived abroad for health reasons.^[36]The corporate tax arrangements ofthe Ritz Hotel, purchased and refurbished by the brothers in 1995, were the subject of a December 2012 investigation byBBC'sPanoramacurrent affairs television programme, which found the hotel had paid no corporation tax in the UK for 17 years, after legally claiming reliefs.^[37]

PS thanks HMRC for my C2W-bought Brompton that was used for train commuting for 4 years and is now a very useful car-reduction multi-mode transport tool. Think of the fuel duty I evaded as well as the tax! : ) 

I wonder how many people's new cars are on salary sacrifice?  I wonder if the author might have one?  What about private health care?  Where does the rage end?  

I just bought some Chris King hubs, headset and bb via C2W.  They are however for my commuter.  

Rather than a scheme to help the poor get to work, wasn't the cycle to work scheme orginally, and probably still, an environmental scheme to get people out of cars?

Just to say I don't like the fact all these schemes benifit the well off more than the less well of, but have taken advantage as a fitness and environmental benefit.

Personally I'd cap the Scheme at ~£1500 for the bike and £250 for accessories (bit tight?),

Yeah I think that's a bit tight. A good e-bike is more than that and why shouldn't a Tern GSD be in reach of C2W? 

I'd agree that the tax reduction could be 20% lower rate for all rather than off the top rate but them's the rules so far - like every argument about tax (imo) it comes down to the rules - don't hate the player, hate the game and those who write the rules of the game. But also, I have a lot of respect to anyone choosing to play a fairer game and not take all the advantages wealth can create. As some have said, it's possible to pay your taxes at a fair % of wealth and feel good about not being a leeching ****. 

Problem with caps is that it excludes some proper utility bikes like an E-longtail, the Tern GSDs of the world that can be used for the school run. Maybe the bike category thing is a workaround for that. Less easy to exclude certain bike classes and sub genres. 

Maybe there's just a different/variation on the scheme to implement then.

Perhaps you apply for the "environmentally-conscious School & Waitrose run C2W funding extension" to top that C2W cap up to the cost of a Tern, just supply Hermione and Isaac's birth certificates, your home and school addresses, and some google map screenshots of the other errands and commutes this cargo bike will be replacing a car for (Note: you will be disqualified if you have two cars, and the DVLA will be asked to monitor your home address for more than one car being registered while your still paying for the bike) 

I see no reason C2W can't serve its actual purpose and have some bolt-ons for the perfectly credible edge cases, currently its morphed into another funding option for middle managers to acquire weekend toys with, that needs to be bounded out. 

Perhaps you apply for the "environmentally-conscious School & Waitrose run C2W funding extension" to top that C2W cap up to the cost of a Tern, just supply Hermione and Isaac's birth certificates,

Being funny or doing the same class BS the Torygraph are up to? : )

Posted by: oggy

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If it wasn't called cycle to work and was called bicycle salary sacrifice nobody would give a monkey's uncle! I know enough tradesmen driving lowered VW vans with tax written off that only earn £12k a year......

My only real gripe is the minimum wage thing! Always thought that is stupid.

Posted by: gowerboy

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It would be good to reduce or take VAT off cargo and utility bikes… I guess that would lead to problems with definitions and classification of bike types… 

there's probably an argument for removing VAT from (road legal) bikes in general (and perhaps other sports/activity equipment) given the societal benefits and NHS long term savings.    The problem is that just like C2W (and EV salary sacrifice) the schemes would soon emerge which gravitate back to the same consumer price point.

Posted by: alanl

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I’m not at all bothered about ‘rich’ people taking advantage of a tax benefit. The proportion of rich people doing it must be miniscule, and if they didnt get their bikes, more bike shops would shut, Manufacturers would scale back etc. The people pay their taxes (hopefully!), so using their benefits within the Law. These people in the article pay far more to the UK Government than me, so why cant they get a little bit back?

The statistics would be interesting - but I don't think its as rare as you think.  It can't be both excellent for the bicycle industry supply chain and almost miniscule.  I know a couple of people who will be on or around six figure salaries who buy 4K bikes every year.  Thats roughly £1600 a year in tax they avoid.  The highest earners can afford to take bit hits on salary sacrifice because they are cash rich.  A director in my former company took home just enough to make sure he was in the 20% tax bracket.  He did that by pumping more into his pension than some of his direct reports earned, an EV salary sacrifice, C2W, etc.  He could afford to do that because he was mortgage free, had no kids an his wife was also a high earner.  So he paid less in tax than his deputy who had a mortgage, 2 kids, etc.  He wasn't doing anything wrong, the system was set up to make it very easy to do this.  

Imagine all these people using the C2W scheme to buy a bike, exercise, keep healthy and not end up needing the NHS to spend a fortune on them.  It's a disgrace! ;o)

Let's be brutally honest, this is pleb fodder! Give the plebs something to get enraged about to distract from bigger problems, no? The amount of fraud, waste abuse in public sector; the amount of CEO and millionaires who miraculously don't take home a big paycheck; the amount of conflict of interest in government etc etc etc the list goes on. I mean close one loop hole another opens. Change the rules and there will be someone else who should qualify who now cant. I've used cycle to work recently but in all honesty by the time you find a shop who accepts your provider, doesn't charge an admin fee and with the bike you want then the difference in price between that and the one that is on a good offer somewhere else isn't massive anyway. 

Being funny or doing the same class BS the Torygraph are up to? : )

Bit from column 'A' bit from Column 'B'  

Let's be brutally honest, this is pleb fodder! Give the plebs something to get enraged about to distract from bigger problems, no? 

Realistically yeah, there's no appetite to change it and it's probably down in the weeds in terms of missing out on HMRC take... Of course the concept of a 2% wealth tax levied on those with £10m+ in assets has been in the press recently, I'd happily leave people's C2W scamming alone if that could be implemented

Page 1: Stop cyclists exploiting tax loopholes!

Page 2: Keep landowners exploiting tax loopholes!

If the aim is to genuinely help employers get bikes to commuters - divert the benefit to employers for having loan bikes, secure storage, showers, etc. 

This.

Or, how about we leave the benefit exactly as it is and just accept that it is merely an exercise focused tax benefit rather than anything to get you to cycle to work.... The only change I would make would be to enable lower paid people to get a bike - rest leave as is. And I say this as somebody who pays an obscene amount of tax and this is pretty much the only tax break I benefit from

How else do people afford to buy e-bikes ?

Ive said it before bikes now appear to be priced in a way that their true value is probably what a top end tax payer ends up paying for these overpriced bikes 

Mrs FD bought ‘her’ Orbea emtb trail (commuter bike) on salary sacrifice. It’s made a stupidly expensive bike of £8k vaguely more affordable at about £4.5k

Posted by: FunkyDunc

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How else do people afford to buy e-bikes ?

 

Ive said it before bikes now appear to be priced in a way that their true value is probably what a top end tax payer ends up paying for these overpriced bikes 

 

Mrs FD bought ‘her’ Orbea emtb trail (commuter bike) on salary sacrifice. It’s made a stupidly expensive bike of £8k vaguely more affordable at about £4.5k

I'll bite - what is her commute like that she requires a trail emtb?

And how far up the spec list did she go to hit £8k? A quick Google, not knowing the model, suggests Orbea emtbs up to about £6k?

Not that I'm bitter that HMRC are daft enough to one day check what staff do with C2W bikes...

And how many minimum wage Sarah's could have had a completely free Boardman hybrid out of that 3.5k we the tax payers paid for your wife's bike?

I know its not that simple, there are many factors at play here - not least that if you give something to someone for nothing they don't tend to value it as much. Then there is the massive issue that there are probably very few minimum wage Sarah's that give a f*** about a hybrid to cycle to work as most people on low wages don't have the luxury of time rather than money to cycle into work as they have to shop, pick up kids and live in a modern estate which has a dual lane bypass to get to town.

Which is kind of my point here - there is a zero sum game here (as always) and I just think the 650 million could probably be better spent (on infrastructure perhaps) than getting the mostly comfortably well off a nice ebike.

If you actually read the article in the OP then its pretty much saying that its a laudable scheme but badly targeted.

Ideally it would be inverted, but that’s neither pragmatic nor simplistic.

fairly it would be a blanket rate, but that’s complicated,

So, it’s tax reduction as that’s by far the easiest to implement and thus the most pragmatic.  

It’s neither fair, nor accounts for the complexities - it’s simply, well, simple and this pragmatic.  Anything else would add significant complexity and costs.  It’s this or nothing.  

My view is that it equates to more mid-top end gear being available SH than would otherwise be the case.  

I'm racking my brains trying to think if they ran any critical articles on wealthy people tax dodging when the Barclay brothers owned them...

Then there is the massive issue that there are probably very few minimum wage Sarah's that give a f*** about a hybrid to cycle to work as most people on low wages don't have the luxury of time rather than money to cycle into work as they have to shop, pick up kids and live in a modern estate which has a dual lane bypass to get to town.

With due respect, this is motornormativity in action. Remember that 1:4 households in the UK, usually the most deprived, don’t have access to a car and minimum wage Sarah is likely to be in this group.

It’ll be the bus or Shanks’ pony.