The Dutch government has ended a tax free cycle to work scheme, amid protests from bike shops.

Around 200,000 bicycles are bought in Holland each year under the scheme which allows employees a new tax free ride costing up to 749 Euros every three years.

One in four Dutch workers commutes to work by bike.

There will now be a new scheme in which company bikes will be tax deductible up to 1.2 per cent of gross salary – but the total also includes other work-related perks including Christmas hampers and company outings.

A finance ministry spokesman told the Volkskrant newspaper that the cabinet is continuing to promote the use of company bikes but that the new system will give employers greater flexibility to decide what to buy for their staff.