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

Posted by: James

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

Its unclear (to me anyway) currently who owns the telegraph. Lloyds took control when the Barclays failed to pay what they owed. The (I think) UAE sovereign wealth fund almost took control but were blocked by the tories and then it all got confusing.

I will admit I am conflicted on the cycle to work scheme. It does seem mostly a scheme to allow tax offsets for the people who can afford it. When I worked in the office I got to see the take up reports and since I cycled in I could easily check that against how busy the cycle racks and the showers were. 

I would be looking to fix the infrastructure instead. If more than a handful of people had cycled in it would have been a right pain in the arse queuing for the shower for example.

I work from home now and live near several warehouses. Looking at the bikes the poorly paid warehouse staff pass me on I dont think they are using the scheme.

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)

Is a point you can get away with on a cycling forum......but I wouldn't try it on a running forum. Or Sunday league football, or sailing, or tennis....

If it was meant to be about fitness, it would not be so sport/passtime specific 

It's a stupid flawed concept and always was. And that's before cycling became the new golf and the number of people who would be interested in using it to afford a unnecessarily shiny toy went up exponentially. 

I'd return it to what I think it was initially intended to be and just remove VAT on bikes with a 'utility' classification to make switching to doing day to day tasks like commuting, going to school and grocery shopping on a bike a bit cheaper....with the added benefit of being open to all regardless of employer engagement (or even being employed). 

With a Tern GSD being how much it is I’d imagine the mythical Sarah will be walking or catching the bus. Most folks I’ve seen who gain value from cycling to work are riding on a bike I wouldn’t have bought when I started mountain biking in ‘92, but it gets them there and that’s all that counts.

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

I could explain this to you but doubt you would understand it.

From my perspective the biggest flaw with the cycle to work scheme is that if your employer can't be bothered/won't because "reasons" then I can't use it.

The sums are small compaed to the tax revenue foregone on the reduced benefit in kind tax rates on electric cars that many 40% tax payers have on salary sacrifice company car arangements.   

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

I stand corrected - they haven't owned it since 2023. That's ok then..

Is a point you can get away with on a cycling forum......but I wouldn't try it on a running forum. Or Sunday league football, or sailing, or tennis....

A bike can be transport for anyone? Ride to the gym rather than fill up the car park, etc. Agree that tax breaks could support any activity but encouraging people to use bikes more is a good aim nationally. Poor infrastructure and car culture are major barriers but cost does come up at the top of every survey I've seen on low transport cycling/e-bike take-up.

out of that 3.5k we the tax payers paid for your wife's bike?

I will bite - clearly you don’t understand how CTW taxation works 

Actually in this instance it means Sarah might actually get her  cancer treated, as reducing Mrs FDs income took her under a threshold that meant she could end up going to work and it not costing her money.

A bike can be transport for anyone?

Of course it can. But that's not why anyone (regardless of 6 figure salary or not)  buys a £6k piece of sports equipment/toy. It's people buying that sort of thing (and the E equivalent) to go round and around in circles in the woods at the weekend or the road equivalent on a tax break that is a complete anomaly when you could make just as good a case for buying a racing dinghy on the same scheme if the purpose was to keep fit. Or your running shoes. It only exists as a loophole as a bike is an umbrella term to cover utility vehicles and sports equipment. Yes, there are edge use cases (like me) that use use sports equipment as commute transport because it's 25 rural miles each way but I'd happily forego any fiscal help I might get to keep the scheme relevant. 

But that's not why anyone (regardless of 6 figure salary or not)  buys a £6k piece of sports equipment/toy. It's people buying that sort of thing (and the E equivalent) to go round and around in circles in the woods at the weekend or the road equivalent on a tax break that is a complete anomaly when you could make just as good a case for buying a racing dinghy on the same scheme if the purpose was to keep fit

Agreed on how that aspect of it is open to criticism, always has been. Some may commute on an expensive MTB or road bike - I have done, many don't.

imo if it's all or nothing because there's no way to police the end use or intent of the purchase, or it's difficult to classify bikes easily, the intent to make cycle ownership easier in the wider population ('2 wheels good' kind of thinking) overrides that misuse/wider use/abuse, whatever anyone could call it. Plus it would demand making it less reliant on the employer signing up, and making it open to all on PAYE, perhaps limit the purchases to one every 4-5 years. It's a flawed system for sure. 

or it's difficult to classify bikes easily

I reckon it could be done pretty easily. Manufacturers/distributors would just need to apply for a specific model to be VAT exempt in a one month window every year and someone with a vague idea would need to pronounce yay or nay for VAT exemption. Yes, it could be easy to blur the lines with gravel bikes that can be used for more brisk longer commuting but if I'm brutally honest they are not the sort of people who need thd incentive as they are going to do it anyway. All funds need to be pushed towards people who would not otherwise be biking buying proper utility orientated well made bikes designed for shorter distance a to b rides in comfort.

Imo one of the worst things that happened in the UK was when people were conned into buying mtbs for this sort of riding. Look at countries where they take utility riding seriously and it's just nothing like as prevalent. 

VAT exemption also has the benefit of being a flat discount regardless of tax band your income puts you in so the bloke on the factory floor on minimum wage gets the same discount as the bloke in the boardroom. 

More people buying and riding bikes of any time is good. I donmt really care if you earn more than me and buy an £12.5k Levo SL S Works or if you buy a £250 Halfords bike for riding to work. It’s helping the bike industry, it’s helping the buyer, it’s getting people fitter both physically and mentally.  Does my wife and some of our friends save 45% over my 20%? Yes, does it bother me? No.

The only thing that really bothers me is that there isn’t some way for people on exactly minimum wage to get something cheap and reliable. But then a £500 bike works out at about £33 month (over a year) so the system should make allowances for them. 

Cyclescheme has been running for over 25 years now and over 1.6 million of people of all incomes have benefitted from it. And with GCI as well that’s all good in my opinion. 

I think there's a lot of people here who are slightly bitter and twisted that they can't take advantage of the scheme. Overall, I think in the taxation picture this is a tiny story. Whilst there are people who buy very expensive bikes, this isn't about what you need. It's about what you want. This isn't communism, if you want to commute on a £300 or on a £15,000  bike - so what? There's also the health benefit which goes towards the NHS and reducing costs there that we need to consider. 

Personally speaking, I would be more concerned about the tax issues around the motability schemes. I knew two people who had cars on this and I'm not entirely sure if the person the car was purchased to help even knew that the car existed! The people just treated the car as a massively discounted purchase that was their car. My sample size are small but I suspect this probably happens an awful lot and I think this probably costs us a significantly larger sum than the odd dentist on their pinarello!

Just to muddy the waters even further, what about high earners that do the C2W to still get free childcare hours - the other option means they just dump it in pension and then it doesn't go into the economy....

Posted by: quentyn

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I would be more concerned about the tax issues around the motability schemes.

It would be interesting to know the true picture here but there’s certainly a decent amount of anecdote about Motability being a bit open to abuse.

I will start listening to the telegraph when they start campaigning against the British dependant tax havens like the channel isles, the isle of man ect

https://taxjustice.uk/blog/worlds-top-tax-havens-are-british-territories/

Ideally the scheme would just cover commuter/utility bikes.  And you'd think that would be easy to enforce and could even lead to more useful bikes being sold - maybe regulate it can only be used for bikes with full length mudguards, cargo carrying ability (rack mounts) and fitted with lights. 

But you'd just end up with a load of carbon road bikes being sold with crappy cheap clip on guards that would be thrown away.  

Taking VAT off things doesn't generally work - theres very good research to show that pretty much every time it's done the discount thats supposed to be passed on to the consumer gets sucked up as additional profit by retailers and manufacturers.  

So this is an imperfect solution that subsidises bikes, but more bikes are fundamentally a good thing - healthier population. So rock on. 

Though practical commuter bikes are something I'm quite into, it's surprising that some think the way to get more people on bikes is to dictate their choice of bike if they want it via a tax free benefit. Majority of people in the UK don't buy practical bikes because they're seen as dull, like they don't choose sensible size/power cars to drive to work or anywhere else. Gravel bikes are an ideal commuter and a good percentage of those sold are used as commuters.

Maybe it should just be called Cycle Active Scheme or something like that, to get past this fixation on work commuting and look at increased bike use overall, recreation or transport.

Posted by: zerocool

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It’s helping the bike industry

mostly the bike industry of Taiwan, true. But let's have every industry subsidise every other industry!

If you really wanted to improve sustainable travel for the low wage, you'd abolish the whole thing and subsidise buses more.

A lot of people claiming that c2W has been very effective and has got a lot of people into cycling. Has it? Someone must have done studies...

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

Anyone got any stats on that. Either in terms of the average value of bike bought or the proportion that go to high rate tax payers. 

In terms of The people i know who’ve used the cycle to scheme most and aren’t what I’d call rich and have been ridden to work. Maybe one was rich but he did ride the bike to work

Headlines aren’t stats and Sarah Butt’s hybrid to ride to Pizza Hut isn’t much of a headline

I think there's a lot of people here who are slightly bitter and twisted that they can't take advantage of the scheme. 

I've been able to access it for the last 12 years, actually commute to work on a bike for part of the week/year and still think negatively about it. Weird huh.

I think there are a lot of people here that are slightly inclined to defend the indefensible because they've (ab)used it themselves and would like to do again or....they just like bikes too much to think about it particularly clearly.

And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Posted by: Convert

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or it's difficult to classify bikes easily

 

Imo one of the worst things that happened in the UK was when people were conned into buying mtbs for this sort of riding. Look at countries where they take utility riding seriously and it's just nothing like as prevalent. 

 

 

 

Imo this is because bike shops in the uk dont really sell utility bikes.  We get road bikes with low drop bars or mtbs.   Mtbs are a much better bet for non cyclists 

Posted by: Convert

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And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Pathetic. Personal insults. I never said they deserve a kick back, I said I cant see the problem with them using the tax advantage available to them, and, they pay far more to the Exchequer than average earners, so why not use the legal tax break to get their bike.

If you want to have a go at tax abusers, maybe get Labour to start taxing the mega corps who pay litle or no tax here, yet have multi billion pound sales in the UK, people on PAYE, even higher payers, are small fry compared to what Apple/Amazon et al get away with with their accounting practices.

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

This has an danger that employers will use this to avoid their responsibility to pay minimum (the) wage. See also umbrella companies and other shady stuff people use to avoid their responsibilities/shift cost to those that can't afford it.

I think it's amusing, yet not surprising (on here) that people get hot under the collar about some people getting a tax break on a bike, yet mention benefits cheats and it's a non issue, 'hardly anyone does it in the grand scheme of things, stop being a nazi'

Posted by: zerocool

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The only thing that really bothers me is that there isn’t some way for people on exactly minimum wage to get something cheap and reliable. But then a £500 bike works out at about £33 month (over a year) so the system should make allowances for them. 

There is sort-of, its called the Cycle To Work scheme, if you believe that the 'benefit' should be an added benefit, then it has exemptions for having pool bikes which would serve exactly the purpose you describe, and while it might cost the company money, would mean that the employee could get a bike without BIK being charged. The problem is that C2W makes money for companies, and so the swing from making profit on 'loaning' staff bikes for money > letting staff use bikes for free, is a really big swing. However there would be nothing preventing companies that say employ lots of people for high wages using that profit to make a pool of free bikes available to their lower paid staff. They just choose not to.

Posted by: alanl

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Posted by: Convert

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And the utter twunt that thinks high rate tax payers deserve a little kickback. There's an orange shitgibbon making himself comfy over the pond where I think you'll fit right in.....

Pathetic. Personal insults. I never said they deserve a kick back, I said I cant see the problem with them using the tax advantage available to them, and, they pay far more to the Exchequer than average earners, so why not use the legal tax break to get their bike.

If you want to have a go at tax abusers, maybe get Labour to start taxing the mega corps who pay litle or no tax here, yet have multi billion pound sales in the UK, people on PAYE, even higher payers, are small fry compared to what Apple/Amazon et al get away with with their accounting practices.

I agree that personal insults is ridiculous and uncalled for, however, how seem to be saying its OK for affluent individuals to exceed the limits of the rules because they pay more tax than others whilst at the same time criticising tech firms for applying the letter of the rules.

Lets remind ourselves what HMRC say:

• the employees must use the cycle or equipment mainly for qualifying journeys. ‘Qualifying journeys’ means the same as for the works bus exemption (seeEIM21850). Other use of the cycle, for instance pleasure use or use by members of the employee’s family will not disqualify the exemption provided that the other use is not the main use of the bicycle.

(my bold).  Whilst some people here are probably arguing the tax exemption shouldn't apply to high earners, I don't think many object if the bike is actually used primarily for commuting.  There are undoubtedly people buying bikes they have no intention on using for commuting.

Your argument that they should have more flexibility because they pay more tax, is actually basically the Amazon/Apple argument - Apple and Amazon argue their activities contribute an awful lot of PAYE/NI/VAT so the state should not look to be too strict on the corporation tax rules.  You seem to be saying, that as I pay more tax (as a Scottish tax payer) than someone south of the border on similar earnings - really HMRC should cut me some extra slack?

Yeah, it's a loophole, but if you don't take opportunities where you find them, you're just robbing yourself. 

I bought my first Salary Sacrifice bike 20 years ago, my last, about a year ago. It's a long travel E-MTB. I'm a working class 40% tax payer so it saved me a fortune. I ride it to work, 2 or 3 times a year. The rest of the time I drive my EV, another tax break. I've had childcare vouchers, gym memberships etc. 

**** the Torygraph. 

It's only a loophole if it's used legally. HMRC say:

4.6 The following conditions must also be met:
• An employee must not, at any point during the hire period, own the cycle;
• At least 50% of the cycle’s use must be for ‘qualifying journeys’, i.e. commuting to
work purposes;

Surely if you're knowingly using the scheme to buy a bike that's never/hardly ever going to be used to ride to work, then it's just fraud.

I'd have thought the scheme could be made more general to encourage all sorts of folk to cycle on health grounds - our obesity/poor health crisis. I suppose some sort of graduated means testing might work. It would be good to support younger people getting into cycling.

It's only a loophole if it's used legally.HMRCsay:

4.6 The following conditions must also be met:
• An employee must not, at any point during the hire period, own the cycle;
• At least 50% of the cycle’s use must be for ‘qualifying journeys’, i.e. commuting to
work purposes;

The whole guide is badly worded and flimsy. I'd take that to mean that everyone involved has zero interest in pursuing any abuses of the scheme.

You don't even have to buy a 'cycle', you could buy some accessories, or parts, or spares.  I've got a winter jacket as part of mine.  Do I have to remember to take it off when I get home before walking the dog?  What about the lip balm I used to get the total up to match the voucher value? Should I wash my face as soon as I get into the office?

I'd rather they just removed / tapered VAT on all bikes.  It'd be easy enough to say any bike <£1k is VAT free and anything over that is a 20% marginal rate unless it's demonstrably a cargo / utility bike, you might end up with Colnago putting guards and clip on panniers to a C60, but it would be an expensive risk for them if HMRC pursued it so I can't see many brands trying it.

Posted by: pjay

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It's only a loophole if it's used legally. HMRC say:

4.6 The following conditions must also be met:
• An employee must not, at any point during the hire period, own the cycle;
• At least 50% of the cycle’s use must be for ‘qualifying journeys’, i.e. commuting to
work purposes;

Surely if you're knowingly using the scheme to buy a bike that's never/hardly ever going to be used to ride to work, then it's just fraud.

The rules are, by design (imho), vague. Yes, at the point of ordering you should intend to use it for at least 50% of qualifying journeys. At the same time there is no requirement to log journeys so you can't be compelled to have anything other than the intent to do so. Circumstances change, and let's be honest, if everyone who ever bought a bit of sports equipment intending to use it 'every other day' got in trouble when they didn't, our courts would be even more over-subscribed than they are now. 

If anyone wants to take the moral high ground, then they're welcome to enjoy the view. My opinion is the hate the game, not the player, if you want a new bike and you can use a C2W scheme, then grab the opportunity with both hands before someone changes their mind and stops it. 

As for the Tories, the scheme got a lot better "on their watch" limits were raised, requirements loosened. 

It's hard to resist when it's a massive break for you. I recently bought a Trek Fuel ex8 Gen6. 

RRP was £4200 but it was 48% off at Balfes. They then allowed me to buy on C2W which took it down to something less than £1400 new... How can you resist a deal like that.

siscott85 - so you bought a long travel eMTB intending to commute on it more than other use but it just didn’t work out that way?  Lots of stuff gets bought and not used - but then 1 ride to work would tick the box.  The issue is when someone buys a very expensive tax free asset which they ride most weekends and then use once a year to get to work when their car is in the garage and claim it’s legit C2W purchase.   Then that person preaches that it’s not their fault, they are just a working class 40% tax payer who is playing the game.  You are not, you are a (minor) tax evader.  The fact HMRC hasn’t worked out a viable way to police it is irrelevant - you are choosing to ignore the rules, under the justification that failing to do so would be stupid.  Hopefully someone does close the loophole, preferably without punishing those it really does make the difference for how they commute.  

thisisnotaspoon - the flexibility for accessories is meant to do exactly what you descibe - make it no concern if you ride your bike home in a c2w funded jacket then take the dog for a walk in the same.  It’s not designed for you to buy a full face helmet and armour for your weekend downhilling.  

Posted by: weeksy

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It's hard to resist when it's a massive break for you.

Is that not the defence of everyone who exploits tax “loopholes” whether it’s paying cash for a no VAT job, the “company van” which is used more for bikes than tools, IHT avoiding trusts, companies offshoring profits (or licensing their “own” trademarks from sister co in Caymens) etc.  

As with everything in tax we tend to look at those who earn more and think “greedy bastards should pay more and stop trying to be clever”.  Perhaps they would if they didn’t think everyone was playing some part of the system one way or the other.  

thisisnotaspoon - the flexibility for accessories is meant to do exactly what you descibe - make it no concern if you ride your bike home in a c2w funded jacket then take the dog for a walk in the same.  It’s not designed for you to buy a full face helmet and armour for your weekend downhilling.  

My point was rather that HMRC really don't seem to care, if they cared then the guidance would have been written competently.

Is that not the defence of everyone who exploits tax “loopholes” whether it’s paying cash for a no VAT job, the “company van” which is used more for bikes than tools, IHT avoiding trusts, companies offshoring profits (or licensing their “own” trademarks from sister co in Caymens) etc.  

No, because ones tax avoidance, the other is tax evasion.

Pensioners make full use of a tax avoidance scheme by having deferred their income to a stage of their life when they'll be need less income and therefore in a lower tax bracket. The rules say that's fine. 

Paying cash for something to avoid VAT is evasion because the rules say it should have been paid.

The morality of those taking the piss out of it somewhat is a sliding scale though.  From those buying a  bike to ride to work, those riding to work on a different bike but buying a weekend toy, to those buying a bike with no intention of ever riding it or any other bike to work.

I can't see the scheme getting canned though, the salary sacrifice car schemes are a far bigger gravy train, and more likely to be deemed to have outlived their usefulness in the next parliament once EV's are the de-facto for cars.

Posted by: ishouldknowbetter

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siscott85 - so you bought a long travel eMTB intending to commute on it more than other use but it just didn’t work out that way?  

 

Lots of stuff gets bought and not used - but then 1 ride to work would tick the box.  The issue is when someone buys a very expensive tax free asset which they ride most weekends and then use once a year to get to work when their car is in the garage and claim it’s legit C2W purchase.   Then that person preaches that it’s not their fault, they are just a working class 40% tax payer who is playing the game.  You are not, you are a (minor) tax evader.  The fact HMRC hasn’t worked out a viable way to police it is irrelevant - you are choosing to ignore the rules, under the justification that failing to do so would be stupid.  Hopefully someone does close the loophole, preferably without punishing those it really does make the difference for how they commute.  

 

Oh god no, I took advantage of a scheme to save a bunch of tax. I will (anonymously) admit to that. I'm not much of a preacher, but at least I'm not a hypocrite. Let's be frank, I'm not alone, especially amongst STW posters. 

As for HMRC's intent, they removed the upper limit of £1k in 2019, maybe policing it isn't their main concern? 

Like I said, if people don't like it, then they don't need to use the scheme. If they close it, I won't complain, nice whilst it lasted. They may do; the current Chancellor is trying to increase revenue by any means possible. 

I don't know why posters on STW would be so angry about it, an excess of moral superiority or bitterness of not having a scheme open to them? It puts more bums on saddles, never a bad thing.  

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

Wouldn't get you an E-Brompton. About to buy my first Bike to Work bike for over 10 years, and it will be titanium (see username), almost 100% used for work, British built and foldable for my mixed mode commute to the new office. Sadly I'll need more locks as it's a bit more desirable than my £125 Mezzo (and four kilos lighter).

As for bling carbon road bikes for six-figure salaried MAMILs, would those would be the same MAMIL's that don't get a personal allowance? So perhaps things even out a bit. I imagine the Telegraph has its own salary sacrifice perks they (ahem) failed to mention. Oh look! they do...

The firm's existing pension scheme, childcare vouchers, bikes to work and computers at work are also available via salary sacrifice.

Errr https://www.hrmagazine.co.uk/content/news/telegraph-group-sets-up-online-benefits-portal-for-staff/

I’m with Weeksy. 

Posted by: ishouldknowbetter

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You seem to be saying, that as I pay more tax (as a Scottish tax payer) than someone south of the border on similar earnings - really HMRC should cut me some extra slack?

Not at all. It is a benefit available to many employed people, so I really cannot see why a higher rate tax payer cannot use the scheme to get their bike. It is well known that many people do not use their bike for commuting/work use, if that was cracked down on, it would be many users, not just the higher paid who have to give back their tax benefit. 

A problem with capping the limit is that you'd put e-cargo bikes out of range. Yes, they're expensive - but they're also the kinds of bikes that could get many cars off the roads in town for kids and commuting purposes, and the finance aspect is important there than for a perfectly decent basic hybrid.

How many cars it could take off the road and whether it would be worthwhile - obviously I don't have the numbers there.

Posted by: ishouldknowbetter

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Is that not the defence

Sorry, I wasn't defending myself, I would have to feel guilty in order for that.

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?

Pathetic. Personal insults.

Sorry if I offended your sensibilities, but I struggle with people with your approach to life. People who have a fundamental misunderstanding that we pay tax on the basis of what we can afford. That paying more than someone else does not entitle us to a little extra. In fact - it doesn't automatically entitle us to the same....just because we 'paid' for it. 

Take your logic to its logical conclusion - does a high rate tax payer get to jump to the front of the queue at A&E? They paid for it after all. Should the doctor look a bit more favourably on someone who's paid in a ton of tax in the past when applying for disability allowance? After all, it's only 'a little bit back'.

My objections to this whole scenario come in two parts - one is in the scheme itself and the other is the approach some have to it - including you seemingly. I think a scheme that allows very high value bikes to be bought as a salary sacrifice and where those who earn more save a higher percentage is fundamentally incompatible and wasteful with encouraging large numbers of people to cycle for utility. Then for people to buy very high value bikes (or if being blunt, toys) they have zero intent on using for the purpose the scheme is intended to save a significant amount of tax and then to say......well, I pay more than most so it's only fair.

Yes, the money involved is barely peanuts, yes the system is ripe for abuse, yes it's all bikes and fitness is good. And yes high rate tax players might well plough their salary into others scheme to avoid tax anyway. But.....a world view and an air of entitlement that those who pay more should expect more or 'get a little bit back' is reprehensible.

Posted by: Convert

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Take your logic to its logical conclusion - does a high rate tax payer get to jump to the front of the queue at A&E? They paid for it after all. Should the doctor look a bit more favourably on someone who's paid in a ton of tax in the past when applying for disability allowance? After all, it's only 'a little bit back'.

No, they should be treated equally. 

Argument done....

Another aspect to salary sacrifice bikes (and cars) is that it can lead to a bigger market for second hand bikes (and cars) for people who can't, or don't want to buy new

I bought a new bike on c2w last year ( I do ride to work when possible) and I sold my old bike to a young lad, who now mountain bikes regularly on my old bike. I sold it at a knock down price, since I was getting a 'bargain' myself, and young John now has a decent bike (that wouldn't have been available to him if I didn't get a new bike through c2w)

Same with cars. I'd never leased a car before but got one on lease through salary sacrifice last year. Before this I had owned my previous electric car for 4 years and was planning to keep it for many more years. I sold that car when the lease one arrived, so someone now has a new (to them) electric car that wouldn't have been for sale of it wasn't for my tax 'avoidance'.

Both c2w and salary sacrifice car schemes can also benefit people looking for a second hand bargain (although I appreciate some cyclists seem to stockpile bikes in their garage, so won't sell their old bike)

that we pay tax on the basis of what we can afford

Nonsense. We pay tax based on what politicians think the electorate can bear whilst retaining reelection prospects. Hence the ridiculous 60% marginal tax rate and loss of childcare for those MAMILs. The top 1% pay 30% of all income tax. If they can mitigate some of that loss of childcare and silly tax by salary sacrifice for a bike (or pension) then they should. The marginal rates for those Telegraph MAMILs are counter productive and reduce productivity overall. Riding a nice bike might up that productivity. And if they ride it to work that extra shift, better still!

Posted by: guest1

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Another aspect to salary sacrifice bikes (and cars) is that it can lead to a bigger market for second hand bikes (and cars) for people who can't, or don't want to buy new

That's a nice idea although I'm not entirely sure its true.  My gut feel is it keeps new prices high (who needs competition when you can get a 40% discount!), which consequently probably bumps up second hand prices.

Posted by: TiRed

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Hence the ridiculous 60% marginal tax rate and loss of childcare for those MAMILs. The top 1% pay 30% of all income tax.

If they can mitigate some of that loss of childcare and silly tax by salary sacrifice for a bike (or pension) then they should.

Posted by: TiRed

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reduce productivity overall.

intuitively that makes sense - but I don't think that has actually been proven - especially in a world where pensions can offset it.

Posted by: ishouldknowbetter

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Child benefit "inequality" is a farce, but not because it might appear to be a 60% marginal rate

That's not the 60% Tired was talking about. That comes from the graduated loss of your personal tax free allowance when you hit £100k meaning the next 12.5k is taxed at an effective rate of 60%

Anyone taking up the scheme in this situation would get an even bigger discount.

It’s not tax evasion. Earn 105k and you will lose 2.5k of personal allowance. Put that 5k in a bike to work scheme, or pension, then you will AVOID the loss of personal allowance. And you will still qualify for child care credits. There is evidence that this is hitting productivity at this marginal rate  a new bike might make it a bit easier!

https://www.ft.com/content/40f3b683-9853-4d86-91b5-19b23fdcf554 Might be behind a paywall, but basically almost a million people will be hit soon.

when you hit £100k meaning the next 12.5k is taxed at an effective rate of 60%

Would rather see that effective rate of 60% apply to everything above £100K.

Anyway, as regards this thread in general... people should be careful with any applause for an "unfair tax break for cyclists" agenda... because if Cycletowork is removed, it won't be replaced by a new fairer tax incentive to get people cycling... and it'll be another loss for cycling in the UK in general.

Posted by: TiRed

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It’s not tax evasion. Earn 105k and you will lose 2.5k of personal allowance. Put that 5k in a bike to work scheme, or pension, then you will AVOID the loss of personal allowance. And you will still qualify for child care credits. There is evidence that this is hitting productivity at this marginal rate  a new bike might make it a bit easier!

https://www.ft.com/content/40f3b683-9853-4d86-91b5-19b23fdcf554 Might be behind a paywall, but basically almost a million people will be hit soon.

ah I wasn’t aware that >100k you couldn’t get childcare vouchers.  Looks like it’s a similar craziness to child benefit though?  Two parents each earning £60k - get child benefit and can get child care vouchers.  One parent earning £100k gets neither?  Now don’t get me wrong I don’t think the children of £100k earners are off to a bad start in life but there is a weird anomaly probably because it’s just too hard.

I can’t read the article - but are there really 1M people affected by this?  That would require about 2% of all UK adults - even if there were that many £100K earners surely a lot of them don’t have children of the relevant age.  

634k pay the 60% now and it will be over 1mn by 2028 due to fiscal drag fixing allowances, and wage inflation. Thats a lot of people looking for a new tax-free bike (or pension, or childcare, or holiday). These cliff edges make perverse tax decisions, including the option of working less (and hence rising more).