Cycle to Work scheme hits new record

Bumper 2013 for sales of tax-free bikes heralds long-term cycling boom, says scheme organisation

by John Stevenson   January 31, 2014  

Cycle To Work Alliance logo.png

The Cycle to Work scheme had a bumper year in 2013, surpassing its 2010 peak with a 16.4 percent increase over 2012 and 164,317 people getting tax-free bikes via members of the Cycle to Work Alliance.

As well as the large overall increase, the fourth quarter of 2013 saw an 11 percent year-on-year increase in scheme participation compared to figures for the final quarter of 2012.

The Cycle To Work Scheme gives a saving of up to 42 percent on the price of a bike by allowing employees to pay for it from their pre-tax income.

The Alliance said: “This growth marks out the past twelve months as the best year for the scheme as employers increasingly recognise the importance of encouraging healthy lifestyle choices among their staff. The unprecedented level of scheme use reflects the high value employers attribute to the scheme in achieving a healthier workforce.”

The organisation believes the increase could be a sign of a long-term boom in cycling, powered by the attention cycling has garnered in recent years from two British Tour de France victories, Team GB’s Olympic cycling medal haul and the imminent return to the UK of the Tour de France Grand Départ.

Steve Edgell, director of Cycle Solutions and chair of the Cycle to Work Alliance said: “The Alliance is, naturally, hugely pleased at the success of the scheme in 2013. Registering our best ever year demonstrates that the scheme remains a proven method of encouraging cycling take-up across the country and remains a critical tool for Government to deliver sustainable transport and public health objectives.

“Of course, no-one should be resting on their laurels. This is merely the start of what we hope will be a longer-term cycling boom. With only 2% of journeys in the UK made by bike, clearly there is scope to encourage more individuals to take up cycling, not least to bring our rates of cycling in line with other European countries. In order to achieve this, Government and the industry will need to work together to increase safety and investment in cycling to make getting on the saddle a simple choice.”

Daniel Gillborn, director of Cyclescheme added: "We are delighted with a record year for the Cycle to Work scheme. With these results, growth is being led by the IBD network which proves that employees favour the personal service, expertise and product choice of local stores that cannot be replicated in large national retailers."

15 user comments

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Would love to see something like this in the States

posted by jarredscycling [436 posts]
31st January 2014 - 16:47

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It's a great scheme, but I think it's time the 1000quid limit was raised.

posted by localsurfer [152 posts]
31st January 2014 - 17:54

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The £1000 'limit' is governed by the consumer credit act. In effect the employer is giving credit to the employee to buy the bike and if they give credit over £1000 they have to be licensed to do so. So it's not a limit on the scheme as such.
If you work for a company that is already licensed to give credit, there is no reason why they can't increase that figure, although I'm sure that would involve more paperwork and you have to bear in mind that the employer has to stump up the cash up front.

posted by numbercruncher [25 posts]
31st January 2014 - 18:03

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Most bike shops will allow you to add your own money towards it. Recently done this with Evans who even allowed me to buy the bike on my credit card and then refunded me the £1000 a couple of weeks later when the voucher came through!

GrooveRidar

posted by GrooveRidar [10 posts]
31st January 2014 - 20:35

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It's great to see this scheme encouraging at least some people to take up cycling but I suspect that, to a large extent, it's being used by people that already cycle.

It's good that there is a scheme, but it can't be right that students, pensioners, unemployed people, sole traders, etc., are all effectively having to either pay more in tax, or receive less in benefits, in order for more than a few higher rate taxpayers, who may not even cycle to work, and perhaps have plenty of bikes to choose from already, to receive a subsidy of up to 42%.

There must be a better targeted a way of distributing this benefit.

"Hey..... Let's be visible out there."

Neil753's picture

posted by Neil753 [430 posts]
31st January 2014 - 21:31

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it is really good to see this scheme being taken up so well.

I do also share the thoughts of Neil753 though.

How many of these bikes will actually be commuted upon?

How many are being taken up by people that already cycle, don't need another bike, have got money and will take up a good tax break when they see one?

I think when one considers bikes like this;

http://www.edinburghbicycle.com/products/revolution-streetfinder-13?bct=...

that many like to commute on, or this;

http://www.edinburghbicycle.com/products/revolution-country-traveller-13...

Which is capable of covering long distances very comfortably and briskly. A thousand pounds seems an ample amount to achieve the intended purpose.

posted by Giles Pargiter [36 posts]
2nd February 2014 - 1:54

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In fairness, out of the 10 or so people I know who bought bikes on thes scheme.....2 actually sometimes commute on them, though most spend the grand or so every year, whilst still commuting on the first one.

On the fairness, they are getting tax paid discounted, if you don't pay tax, how can you get a discount on it?

Sole traders using a bike for business travel can buy it without tax and net of VAT in most cases.

All Campag

posted by Flying Scot [266 posts]
2nd February 2014 - 9:44

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If all 165,000 people went for the full £1,000 and were all higher rate tax payers the lost revenue to the exchequer would be less than £70 million. In practice significantly less than that obviously.

I can see an argument about how that would be better spent on cycle infrastructure for all but in reality if that were distributed across the country it wouldn't add up to one decent scheme per local authority.

In the context of the other nonsense the government spends my/our money on or indeed a trunk road budget in the billions the fact that some of the money goes on n+1 does not keep me awake nights.

Shame I've never managed to time it right to take advantage!

posted by Nixster [47 posts]
2nd February 2014 - 11:24

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Quite agree with you Nixster, I shan't lose any sleep either.

It is just that when one considers the entire situation, of course, any such grant/tax break/loan from the Govt. always does go back to the Govt. 100% - so long as it is not sat upon as savings, but is spent and does not leave the UK. It is our money being spent on us.

Really it is just a question of how much of it is achieving the desired objective this time round. That is what I was wondering. How effective is this at actually directly getting more people to commute by bike? How well is our money being used to build our nation in the way that we would like?

None of this is in any way a criticism of the scheme.

posted by Giles Pargiter [36 posts]
2nd February 2014 - 21:37

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I have to agree with the argument that the benefit accrues most to those who generally need it least....
Basically it is another example of our screwy tax system. Still, I will continue to use it as and when necessary

posted by arfa [368 posts]
2nd February 2014 - 22:30

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My Brommie purchased on BTW in 2012 gets used every working day.

My Langster has been used just the once so far on the commute, but its only January!

I don't see the scheme as unfair - I contribute to tax income, and this is just a little perk back, and the BTW revenue seen by the bike shops help keep their employees in their jobs. It's all good.

posted by allez neg [409 posts]
2nd February 2014 - 23:10

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Neil753 wrote:
It's good that there is a scheme, but it can't be right that students, pensioners, unemployed people, sole traders, etc., are all effectively having to either pay more

The clue is that it's a cycle to *work* scheme, hence why the groups you mention are excluded...

Whilst I know the system is abused by some, to be honest, the savings aren't as great as publicised anyway. Yes, a standard rate taxpayer saves an initial 32%, but then if you buy a £1k bike and take outright ownership after the year, you pay a fee of 25%, taking the overall saving down to about 7%. Pretty much anyone could haggle a comparable deal in a shop.

Even opting for the 3 year extended lease, a fee of 7% is still payable, so the discount is more like 25%. I've seen 2013 sale prices with bigger discounts than that.

Factor in that some retailers charge you a fee for using the scheme (Planet X), and in some cases you can conceivably pay more for a bike in the long term than just paying in cash.

All that said, I have used the scheme before and will likely do so again this year, mainly due to the n+1 rule! I figure that I otherwise take very little out of the tax/benefits system, so why shouldn't I take advantage of something that is directly relevant to me?

posted by parksey [107 posts]
2nd February 2014 - 23:44

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I used the scheme back in 2007 in a previous job and it basically got me into cycling. My second (and current) bike I actually bought on interest-free credit from the shop as - unbelievably, for a government initiative - like many of my fellow civil servants I can't access the scheme (don't ask).

Based purely on my own experience, I think the scheme can get folk off their bum. But I suspect, as others do, that n+1 may well be behind the rise in takeup.

Also, I flatter myself that I'm not a complete thicko but I still don't really understand how the finances of it work, what with leasing, final payments and so on.

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posted by Ghedebrav [822 posts]
3rd February 2014 - 0:03

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Ghedebrav wrote:
Based purely on my own experience, I think the scheme can get folk off their bum.

Same here. Had the scheme not been available then I can't say my enthusiasm for cycling, using a knackered 10 year old MTB, would've lasted quite as long. Since getting the new bike I've started taking the long way home and have been out most weekends on it too.

The n+1 on the scheme for me will definitely be another commuter bike rather than just a plaything, probably a tourer or CX bike for foul weather use. A colleague did admittedly use it to get their child's Christmas present, which I acknowledge isn't exactly in the spirit of the scheme!

Even my LBS was advocating me using the scheme again to get a bike for the other half purely for recreational purposes, so the increase in participation clearly doesn't correlate into an equivalent number of people no longer driving to work.

posted by parksey [107 posts]
3rd February 2014 - 1:18

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Still waiting for my employers to complete signing up and give me the go-ahead.

I've got my eyes on a folding electric bicycle...

Folding because I live in a flat up three flights of stairs, and electric to take the effort out of a couple of hills on my commute so I'm not sweaty on arrival.

posted by Paul_C [116 posts]
3rd February 2014 - 7:27

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