Cycle to Work scheme to remain in place

Bacon buttie tax relief not so lucky

by Mark Appleton   April 6, 2011  

Commuter cyclist

As a major overhaul of Britain’s taxation system starts to take effect, the Government has made it clear that the tax benefits associated with the Cycle to Work Scheme will remain in place.

The confirmation came in a parliamentary answer to an MP's question about the continuation of the scheme. The response from David Gauke, the Exchequer Secretary at the HM Treasury, said:

“The Cycle to Work scheme provides an exemption from income tax on the benefit in kind created when an employer hires cycles or cycling safety equipment to an employee. The Government have no plans to change this exemption.”

There are, however, some advantages to both employers and employees utilising the Cycle to Work Scheme as a result of changes in the way income tax is applied. The threshold between basic rate and higher rate tax bands is coming down from £37,400 to £35,000 and employees affected by the lower threshold will be able to save as much as 9% extra if they get a bike through the scheme.

Employers’ Secondary Class 1 National Insurance Contributions rise to 13.8% as of today, meaning those participating in the Cycle to Work Schemes can take advantage of even greater savings than before.

Sadly, as reported previously on road.cc, an associated tax break which saw tax relief on breakfasts offered to cyclists on Bike to Work days has not been spared the cut, having been recommended for removal by the Office of Tax Simplification.

For more on the Cycle to Work scheme click here.
 

11 user comments

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My employer doesn't deem it beneficial to offer this fantastic incentive to its drones, despite the subsidiary in Northern Ireland embracing it.

"Not cost effective"

andylul's picture

posted by andylul [406 posts]
6th April 2011 - 10:02

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"Not cost effective" - what is it costing them exactly?

Dave Atkinson's picture

posted by Dave Atkinson [7038 posts]
6th April 2011 - 10:08

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Less than nothing it would seem as they already run/ran salary sacrifice schemes for share purchasing, broadband take up, home computing and private healthcare.

I'm not going to name and shame who I work for, but they are a major supporter of the 2012 Olympics.

It also doesn't directly affect me as I do not have to cycle to work (being a full time 'agile' employee) but the benefits of cycling, a cause they seem happy to champion through their corporate responsibility department, don't appear to extend to assisting with the purchase of a newer/safer vehicle.

andylul's picture

posted by andylul [406 posts]
6th April 2011 - 11:17

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Quote:
"Not cost effective"

Which means "we don't care". Hardly a progressive, enlightened, forward-thinking organisation. And people wonder why businesses don't like competition (especially smart competitors).

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posted by Simon E [1779 posts]
6th April 2011 - 11:19

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andylul wrote:
I'm not going to name and shame who I work for, but they are a major supporter of the 2012 Olympics.

Thinking

Is their stance on Cycle To Work causing you difficulties for the journey?

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posted by Simon_MacMichael [7490 posts]
6th April 2011 - 12:05

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My boss has said no to the cycle to work scheme on the grounds that it could pose risks of injury. This is despite the fact that our firm's MD (my boss's business partner) is a keen cyclist who clocks regular miles on his hybrid, or that our sales director is another keen rider (not to mention myself or my immediate colleague - four senior staff are keen cyclists in other words). It has been pointed out to my boss that the health benefits of cycling outweigh the risks of injury by a factory of around 20:1 but he has a remarkable capacity to ignore what he doesn't want to hear.

Mind you, the keen cyclists at my firm all have at least one bike anyway.

OldRidgeback

posted by OldRidgeback [1941 posts]
6th April 2011 - 12:30

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My firm is also a 2012 sponsor, and is generally quite supportive. It does promote a cycle2work scheme, and provides parking, lockers and showers free, plus a daily towel for a small charge. It also sponsors a major national charity ride and has a thriving sports cycling club.

So what's wrong? Only that, when staff suggested that the firm reimburse staff for the cost of an annual sub to the Boris Bikes, they demurred. 70% of us are based in central London and we travel daily around the centre. We have a huge annual bill with Addison Lee and pay shedloads to black cabbies. Boris Bikes would be an ideal alternative in the right weather - much cheaper, faster, and good for our health.

The problem? Lawyers. Legal advice told them that they could open themselves to injury claims by staff who argued that they had been encouraged to place themselves at risk. Elf & safety gone mad.

The next step is to repond with a proposal for a bank of helmets and high vis tabards which staff can sign out when they plan a BB journey.

posted by Paul M [294 posts]
6th April 2011 - 13:11

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Paul M wrote:
The next step is to repond with a proposal for a bank of helmets and high vis tabards which staff can sign out when they plan a BB journey.

Tabards in green to match the full stop on the logo? This spot the sponsor game is fun Big Grin

(ps - Anything that reduces the number of Addison Lee vehicles on London's streets has to be good, yeah?)

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posted by Simon_MacMichael [7490 posts]
6th April 2011 - 13:30

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My lot have encouraged C2W - and good for them too - it costs them nothing and I am less likely to get run over by a lorry than crushed in the tube.
Unfortunately they just haven't joined up the dots yet and realised that people will actually ride to work so need to increase secure parking provision to match - the space is there (for Directors' cars).

Anyway I bought a bike, and then another, and then another as they each got nicked and I remain on the list for a parking space in our building (and please dont tell me about decent locks, I had them). I just hope the latest one is still there because I rather like it.

Alg

posted by alg [125 posts]
6th April 2011 - 13:51

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Paul M wrote:
My firm is also a 2012 sponsor, and is generally quite supportive. It does promote a cycle2work scheme, and provides parking, lockers and showers free, plus a daily towel for a small charge. It also sponsors a major national charity ride and has a thriving sports cycling club.

So what's wrong? Only that, when staff suggested that the firm reimburse staff for the cost of an annual sub to the Boris Bikes, they demurred. 70% of us are based in central London and we travel daily around the centre. We have a huge annual bill with Addison Lee and pay shedloads to black cabbies. Boris Bikes would be an ideal alternative in the right weather - much cheaper, faster, and good for our health.

The problem? Lawyers. Legal advice told them that they could open themselves to injury claims by staff who argued that they had been encouraged to place themselves at risk. Elf & safety gone mad.

The next step is to repond with a proposal for a bank of helmets and high vis tabards which staff can sign out when they plan a BB journey.

Interesting. I can't see how their liability for you injuring yourself on a bike would be different from you injuring yourself whilst walking around London for work, or getting injured in a cab - you are at risk in all those circumstances. Perhaps you could ask instead for the 20p per mile expenses which HMRC says can be paid tax free for cycling - this way you have chosen the mode of transport without any 'encouragement' (i.e. without them paying your subscription) but would probably get the money back over the course of the year even with very short trips.

posted by step-hent [638 posts]
6th April 2011 - 14:01

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C2W = middle class tax break, those on minimum wage can not take up C2W, when I was made redundant from halfords the guys i left behind selling boardmans etc to C2W customers could themselves not sign up to the scheme, being on min wage, despite the benefits it would have brought to them Food for thought. In my experience most of the bikes bought on the scheme will never be ridden to work I lost count of the number of times I put C2W bikes into the back of upmarket motors, not to mention the dodgy geezers sent packing, trying to buy sat nav for the motor and kid's bikes for xmas with C2W vouchers they did not seem bothered that they were trying to involve me in tax fraud.

onward ever onward

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posted by bikecellar [221 posts]
6th April 2011 - 19:59

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