Cycle to Work scheme to remain in place
Bacon buttie tax relief not so lucky
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.