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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.
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.
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!
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.
Hence the ridiculous 60% marginal tax rate and loss of childcare for those MAMILs. The top 1% pay 30% of all income tax.Child benefit "inequality" is a farce, but not because it might appear to be a 60% marginal rate (its not), but because it taxes households with one high earner differently from households with two medium incomes earning even more money. In fact the salary sacrifice schemes exacerbate that - the most comfortably off can afford to salary sacrifice into cars/bikes/pensions to keep their taxable income down and get child benefit but one high earner with a big mortgage may not have the same luxury. It would have been far more sensible to have made child benefit taxable income.
Even if that means bending or breaking the rules by buying bikes they do not intend to mostly use for commuting? Why should such tax evasion be possible for you but not for me, when by being 100% home based I actually have a bigger congestion/carbon benefit for society than someone who rides to work 1 day a week?If they can mitigate some of that loss of childcare and silly tax by salary sacrifice for a bike (or pension) then they should.
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.
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.
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).
The percentage of those 100k earners spending money via C2W (when lots of big companies still cap it at 1k) to get under that threshold compared to putting it into a pension will be minuscule
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies who lean more into suitable bikes here, so I’d be surprised if it went.
(I’ve never used it as I’d rather shop a bargain without the hassle of it)
Errr
Private Eye often has fun with what the right wing rags have on the front page vs what the company does. The current theme is the ranting about "diversity" vs their job adverts/training courses.
Must be quite tricky writing a rant and then going into a training session.
Would rather see that effective rate of 60% apply to everything above £100K.
It's easy to look at people earning £100k and say the government should tax them at huge rates, however there are consequences.
Many people on such pay grades are doing specialist roles and they can't be easily replaced. Increase the tax burden, and how will you feel when you can't see your GP as they won't do any overtime as it isn't worthwhile after tax, or you can't see a consultant as they went part-time as it was tax efficient, or perhaps they took very early retirement as it wasn't worth continuing to work.
Be careful what you wish for!
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies
There is a lot of supposition on this thread. C2W would be a phenomenally expensive way to subsidise a few LBSs (that all moan about how much the providers charge them and how little money they make on the scheme).
In regards to the £100k childcare thing. Yes £100k is a lot of money to earn, but to put it in perspective, when we had kids (twins), my wife went back to work pretty quickly (post natal depression and recommended to go back by my doctors) and I became a full time stay at home dad and just did one paramedic shift a week. This meant that I learnt about £10-12k a year while my wife brought home £105k. This meant we lost our childcare credits (system was a bit different 5 years ago), but our friends with a higher combined income (2 x £60k, and one couple earning £90k each) kept theirs. Was it fair? Not really and did we grumble about it? Yep. Personally I think it should be a combined household income rather than just if 1 parent earns over £100k.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
That will be the legacy of those abusing the current system. This is why we can't have nice things. Except the rich won't care. They'll just find another way to avoid paying tax
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies
There is a lot of supposition on this thread. C2W would be a phenomenally expensive way to subsidise a few LBSs (that all moan about how much the providers charge them and how little money they make on the scheme).
for sure, and I have no interest in this so I’m not a defender of the scheme, which has flaws. But for some shops the last two years they’ve no doubt suffered the charges for the provider, but otherwise not had to discount bikes that have sat with no interest due to the general fall in demand and over stocks
They won’t crack down on cycle schemes for the than rich, they’ll just get rid of it completely and screw everyone over.
That will be the legacy of those abusing the current system. This is why we can't have nice things. Except the rich won't care. They'll just find another way to avoid paying tax
Apart from a few frothers on here though, does anybody really give a shit?
Governments usually screw over the poor, rather the well off, so I can't see them taking it away any time soon....
It's a scheme for those with sharp elbows.
Its wide open to abuse and doesn't seem to have even kept the LBS s from closing.
Scrap it and spend the money on road safety for cyclists and pedestrians.
It might also he worth tackling bike theft?
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
So one other frother then....
When I used the cycle to work scheme I had just started work in a call centre for a large UK company with an entry level wage to match. The scheme allowed me to buy a road bike up to £1,111 which I couldn't have purchased without the scheme as lived pay packet to pay packet, I then used the bike to commute well over 50% of the guidance. I still have the road bike now over 10 years later. Lots of colleagues in the same situation did the same too, I think the C2W scheme like everything is spoilt by a few bad apples but on the hole was good.
This thread has reminded me of the scheme and I might now replace the last road bike I had from it and I WFH so achieving over 50% commute shouldn't be an issue...
C2W seems to be a good thing for some of the local bike shops and presumably for some of the UK companies who lean more into suitable bikes here, so I’d be surprised if it went.
(I’ve never used it as I’d rather shop a bargain without the hassle of it)
Its wide open to abuse and doesn't seem to have even kept the LBS s from closing.
Scrap it and spend the money on road safety for cyclists and pedestrians.
It might also he worth tackling bike theft?
Less is currently spent on cycle infrastructure as a whole than the cycle industry generates in VAT.
That C2W has become complex, and of sufficient value for an entire service industry to grow up around it is a strong indicator that it is broken.
Not sure about that. I wouldn't design the scheme the way it is, but any task that many companies might want to perform will result in a service industry being created to help them. Payroll systems. Bin collections. Etc.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
if C2W were simply abolished, it wouldn't screw everyone over. On one hand, everyone would benefit from the money not being drained from general expenditure (c.35% of which is spent on benefits for the poorest anyway) and on the other it's a small group of people who got big benefits from C2W that would lose out.
They won’t crack down on cycle schemes for the rich, they’ll just get rid of it completely and screw everyone over.
Define rich, earing a certain number or just more than you earn?
Either way, I doubt scrapping it will result in any more income tax being collected. I suspect those who use it to bring their tax burden down will just divert the money into pensions or another salary sacrifice. Bike shops would miss out on some* trade and the treasury would miss the bit of VAT on these additional purchases.
*I know some people think CTW kills bike shops but I disagree and think it does drive additional sales.
Apart from a few frothers on here though, does anybody really give a shit?
Well, there was an article about it in the Telegraph recently.
So one other frother then....
Do you want another spade, you appear to have worn that one out...
In the big scheme of things, I just don't see it as a massive deal. I'm not a high rate tax payer but have cycled to work on and off for the past 20 odd years and have benefitted from using the scheme. I don't think its a great system and I don't think its particularly fair for well off people to get more tax cuts, but as I said before I think it was an environmental scheme originally* and if it's getting people out of cars and onto bikes then it's not really harming anyone.
*I may be wrong about that or maybe i've fallen for the hype....
if it's getting people out of cars and onto bikes then it's not really harming anyone.
it depends on how much it costs the state. Losing £10,000 of tax revenue to get one person out of a car on their commute would be terrible value; losing £10 of tax revenue to do the same thing would be a bargain. We can't just say "well, if it cuts traffic/pollution by any amount then it must be worthwhile".
Define rich, earing a certain number or just more than you earn?
I just chucked the question in that there Googles and got this back:
Income and Wealth Thresholds:
Subjective Definition:
The definition of "rich" can be subjective and varies depending on individual circumstances and aspirations.High Income:
Some surveys suggest that earning around £96,000 to £100,000 per year or more could be considered "rich".Wealthy Individuals:
HMRC defines wealthy individuals as those with incomes of £200,000 or more, or assets equal to or above £2 million in any of the last 3 years.Top 1% Earners:
To be in the top 1% of earners in the UK, you need an annual income of at least £182,000 before taxes.High Net Worth Individuals (HNWIs):
HNWIs are generally defined by their net worth and the liquidity of their assets, with some sources suggesting a net worth between £1 million and £5 million in liquid assets.
Which I found a bit surprising in some ways, personally I don't meet the threshold given for 'Rich' but we're not exactly poor either.
The boundary given for "top 1%" is less than I thought TBH.
But anyway if we're saying "Rich" is £100K+ annual income and "wealthy" is about double that, how many people in those brackets are scoring cheap, Tax efficient bicycles?
Which I found a bit surprising in some ways, personally I don't meet the threshold given for 'Rich' but we're not exactly poor either.
The boundary given for "top 1%" is less than I thought TBH.
But anyway if we're saying "Rich" is £100K+ annual income and "wealthy" is about double that, how many people in those brackets are scoring cheap, Tax efficient bicycles?
That's why I asked the question. It is a bit like people complaining about how long it took to get to work because of all the traffic without realising that they are the traffic.
Similar conversation in the office yesterday about the potential change to the cash ISA allowance that may drop from 20 to 4k in the budget. One of my colleagues says thats good because anybody with 20k a year left over can afford to pay more tax. I suggested with that logic they should just scrap it alltogether as people with any money left can afford to pay more tax. His answer was "thats ridiculous, I pay enough tax as it is and I am not paying any more".
Meanwhile:
The Cycle to Work scheme should be rebranded “Cycle for Health” and opened up to low-income employees, freelance workers, and pensioners, as part of a series of reforms urgently required to tackle inequality and lack of access to active travel, the All-Party Parliamentary Group for Cycling and Walking (APPGCW) has said.
https://road.cc/content/news/mps-call-urgent-reform-cycle-work-scheme-313241
To some extent I can't see the point of promoting cycling unless driver behaviour and attitudes are improved.
To some extent I can't see the point of promoting cycling unless driver behaviour and attitudes are improved.
It's a fair point but I think it quickly becomes a chicken and egg situation. I know a lot of folk who would ride more if there was less traffic, but don't see that they are the traffic they want less of.
Obviously, proper roads policing*, no exception bans at 12 points etc, better infrastructure and proper public/driver information campaigns would be a great situation to help the process, but not likely to happen in the short term
* and cyclists have to accept their share of the responsibility for that.
if it's getting people out of cars and onto bikes then it's not really harming anyone.
it depends on how much it costs the state. Losing £10,000 of tax revenue to get one person out of a car on their commute would be terrible value; losing £10 of tax revenue to do the same thing would be a bargain. We can't just say "well, if it cuts traffic/pollution by any amount then it must be worthwhile".
The question is, how much tax revenue is actually lost through C2W. Is it really 'costing the taxpayer'? I presume without C2W, the total value of bike sales would be much lower.
Employers operating the schemes for themselves seems increasingly rare, I'm sure this isn't what government/HMRC originally intended.
Possibly not originally but the change to the "1k limit" was the government changing their position.
There never was technically a 1k limit but instead an exemption from being FCA registered for providing credit to consumers if you kept it to 1k or less.
Since that comes with overhead it wasnt worth it for the average company although some of those which did have the registration for their business did offer higher limits to employees.
The change was allowing the c2w schemes to be the official providers of the bikes vs the individual companies. They are therefore the ones who are FCA registered and hence can offer higher limits.
Define rich, earing a certain number or just more than you earn?
Don't start that argument.....
Completely ignoring Chapter 1 of Das Capital*, you'd need to be paying ~£23k of tax just to break even with government spending.
And that's cradle to grave, so more like £45k/year during your working life.
*if you don't want to ignore it and still reading. That's not just income tax and VAT, because your manager, CEO, directors, shareholders etc, their work has no value without yours and therefore collectively you should consider that the person on the shop floor earning minimum wage and paying very little tax is actually contributing to the higher-ups tax contributions. And vice versa, just because you're smugly earning >£100k and think it's unfair to be paying a 60% marginal rate, with rare (to the point it can almost always be argued out) exception you only have that earning potential due to the work of others. And therefore comparing the monetary value of a worker is flawed because capitalism puts a value on that workers output unequal to the actual value of their work. And breathe .........
Many people on such pay grades are doing specialist roles and they can't be easily replaced. Increase the tax burden, and how will you feel when you can't see your GP as they won't do any overtime as it isn't worthwhile after tax, or you can't see a consultant as they went part-time as it was tax efficient, or perhaps they took very early retirement as it wasn't worth continuing to work.
Be careful what you wish for!
And then the populations health declines, output reduces, ability to pay Dr's reduces and their value diminishes. See the above point, Dr's only make a lot of money because there's a lot of other people below them in the economic web also producing value. Be careful what you wish for. This isn't a dig at Dr's, it's just pointing out that left unchecked everyone will just try and get one over on everyone else until the whole system collapses.
Prompted by this thread i read up the rules for the scheme. It clearly states that the bike should be used for 50% commuting. I hadn’t realised quite how clear cut the rules are.
"I hadn’t realised quite how clear cut the rules are."
And how pointless. Totally unenforceable. If they think bikes are a good thing and to be encouraged then zero rate them. Just like at the supermarket you pay VAT on booze but not on food.
Why commuting anyway? Someone riding at the weekend is improving their health and possibly costing the NHS less long term.
Just ordered mine. First B2W in 12 years. And it definitely will be used for at least 50% commuting 😇 .
Curiously the salary sacrifice for an electric vehicle (helloooooo Renault 5!) makes no such requirements, handy as the office is in Central London and there is no parking. Renault have a fabulous new salesroom on Oxford St, but I am doing my best to resist. So I'm with @irc, just getting people on bikes is a good reason for salary sacrifice - as per electric cars.
And for mixed mode commuters, only folding e-bikes will be allowed on the tube from April (mine is not an e-bike though)
It clearly states that the bike should be used for 50% commuting. I hadn’t realised quite how clear cut the rules are.
The rule actually states "must" - not "should" it's an instruction, not a suggestion.
not read all posts, but i just took out my 3rd C2W scheme.
First year was a commuter bike, which i do use often... to ride to work.
Second was a T-Type GX transmission for my Raaw.
This year is a T-Type XX transmission for my Chisel FS.
Its a scheme that is available and i can benefit from. 40odd % off bike stuff... yes please!
One of the very very few benefits my work has to offer, so i will take it.