MPs to Dept for Transport: fix Cycle2Work for the low-paid!

It also needs to be something that is available to all not just those who work in companies that will do it.

I work for the government FFS and my employer won’t do it. I would guess this is more likely if you are low paid too.

Most government depts do seem to offer it – perhaps your union should lobby for it.  There’s probably a bike hater somewhere in senior management – the sort of person who will find 15 reasons why having a shower on site is going to result in the company getting sued!  Actually if they really wanted to incentivise CTW they would make schemes available to companies for adding showers, bike storage etc.

At a previous employer we had a nasty CFO who hated cyclists and begrudgingly lost the battle with HR director to offer it – but with the shittiest possible implementation.  When he left the new CFO happened to be a roady… and the scheme improved a lot, no limit etc!  He could still be a c*n* but when someone raised the issue that the warehouse staff couldn’t use the scheme because of the minimum wage rule*, he just went and bought 4 bikes on his company credit card and told them they could use them FOC, no need to repay at all… they weren’t silly money but not BSO either – it was during covid (the issue arose because people didn’t want to use public transport).

*they weren’t even on minimum wage – but salary sacrifice on pension scheme put them low enough that a bike on top would be an issue.

At a previous employer we had a nasty CFO who hated cyclists and begrudgingly lost the battle with HR director to offer it – but with the shittiest possible implementation.

That’s another issue with it – it’s not just a barrier for the low-paid, it’s a barrier in any employment where one senior figure can kill the whole thing dead cos they hate cyclists. Not dissimilar to how one stick-in-the-mud in a council department can effectively kill off any road safety schemes, cycle lanes etc.

The main overhaul needs to remove all the numerous providers from their position and have it administered by central government as a default. ANYONE can apply, no limit, no restrictions on shop or supplier, primary purpose should be riding to work but what you do with it in your own time is your business. Effectively create an interest-free loan scheme for bikes – it can be tied into repayments via tax / salary sacrifice if you work but other repayment options if you are on minimum wage. Could put in a graduated limit if required for people with low credit scores so someone on minimum wage can’t go out and buy a £10,000 MTB but that’s no different to most areas of life.

And then cross-subsidise for the low-paid, self-employed and even the WFH-ers – recognising that people who WFH may still need to go to meetings, still need to travel around their local area, shops etc.

I like.

But I would go further and say anyone below the average wage gets a £100 voucher to spend at any bike shop annually. This can contribute to a new bike, servicing & parts, helmet or clothing.

Risks reinforcing the whole “I pay more tax than you” anti-cyclist ranting?

That’s another issue with it – it’s not just a barrier for the low-paid, it’s a barrier in any employment where one senior figure can kill the whole thing dead cos they hate cyclists. Not dissimilar to how one stick-in-the-mud in a council department can effectively kill off any road safety schemes, cycle lanes etc.

The main overhaul needs to remove all the numerous providers from their position and have it administered by central government as a default. ANYONE can apply, no limit, no restrictions on shop or supplier, primary purpose should be riding to work but what you do with it in your own time is your business. Effectively create an interest-free loan scheme for bikes – it can be tied into repayments via tax / salary sacrifice if you work but other repayment options if you are on minimum wage. Could put in a graduated limit if required for people with low credit scores so someone on minimum wage can’t go out and buy a £10,000 MTB but that’s no different to most areas of life.

And then cross-subsidise for the low-paid, self-employed and even the WFH-ers – recognising that people who WFH may still need to go to meetings, still need to travel around their local area, shops etc.

That’s why I think just getting rid of VAT on bikes would be a good idea.

Heck you could get rid of VAT on any sports kit if you wanted a more broad justification as it would* all pay back in NHS savings over the longer term.

No VAT on:

Gym memberships (gym must not have a sauna, steam room etc to qualify as a gym rather than “health club”).

Badminton rackets

Football boots (clothing as usually is the odd one out, it’s clearly an essential, but you can’t adequately define between a £125 football shirt and a £5 gym top).

Bikes

etc.

*well spending in general on sport does, the question would be whether people would actually do more sport as a result, or just buy kit that was 20% better / pocket the difference.

But once again offers bigger savings the more you spend, so the wealthier benefit more…

That’s the same logic that has people shopping by ‘biggest discount’. The illusion of savings when you’re actually spending more.

The problem with VAT exemptions is that they generally don’t lead to price reductions for consumers. Some good background here:

https://taxpolicy.org.uk/2023/07/12/vat_cuts/

I think I’d be more in favour of the bike voucher idea as long as it doesn’t juice demand so much as to cause localised inflation on bike stuff and become self defeating.

squirrelking

Free Member

But once again offers bigger savings the more you spend, so the wealthier benefit more…

That’s the same logic that has people shopping by ‘biggest discount’. The illusion of savings when you’re actually spending more.

No, it’s different with tax.

With most discounts it’s “save 20%” leading to “I’ll save more if I spend more” but with tax it’s “these people will save 20% and those people will save 40%”

Yeah I understand that bit, I think we’re at cross purposes. I was referring to “the more you spend the more you save”.

TBH I’d be as happy making it 20% across the board, keep VAT on bikes and a single use code on your tax code notification any retailer can redeem for the 20% rebate.

2. C2W increases your tax free allowance by the amount ‘borrowed’, rather than reducing your salary and so affecting the top rate of tax that you pay. So everyone saves bottom rate tax, even if you’re an STW IT director on £500k.

You may need to finesse that a bit, because as proposed it would actually affect your marginal rate because of the way the 0% band passes through into other bands.

But we can change it after I buy my “vanity chariot”, right?  I’ve been hoping to buy one for, well, forever, but still can’t afford it.