Chancellor urged to open up Cycle to Work Scheme to lower-paid and self-employed workers

Chancellor of the Exchequer Rishi Sunak is being urged to open up the Cycle to Work scheme to lower-paid workers and the self-employed.

The call to widen access to the scheme, which has now been running for two decades and enables people to gain tax breaks on purchases of bikes and accessories through salary sacrifice, has been made by the Cycle to Work Alliance as well as organisations including the Co-op, the Federation of Small Businesses, and British Cycling.

Other signatories to a letter sent to the Chancellor include the Chartered Institute of Payroll Professionals, the Forum of Private Business, and the Association of Independent Professionals and the Self-Employed. Copies were sent to ministers including Trudy Harrison who has responsibility for cycling at the Department for Transport.

The letter says that under current guidance for participation, access to the scheme, whose benefits have been enjoyed by millions of employees, is barred to those whose earnings are at or slightly above the National Minimum Wage, as well as people who are self-employed – groups they identify as having among the most to gain were they allowed to take part in it.

Paul Caudwell, Health Wellbeing Manager at the Co-operative Group, commented: “We’re Co-operating for a fairer world which includes doing what we can to make things fairer for our colleagues.

“The current legislation surrounding Cycle to Work schemes prevents us from giving our lower-paid keyworker colleagues access the same level of financial incentive, using a salary sacrifice arrangement, to use our cycle to work scheme.

“I believe that the legislation must change to allow a salary sacrifice arrangement to be able to reduce pay below the National Minimum Wage.

“This would make the incentives for using a salary sacrifice scheme more equitable for all of our colleagues and increase take-up of our cycle to work scheme.”

> You will now be able to get bikes worth over £1,000 on the Cycle to Work scheme

The letter was co-ordinated by the Cycle to Work Alliance, founded in 2010, and which brings together the five largest providers of the Cycle to Work scheme – Cyclescheme, Cycle Solutions, Evans Cycles, Halfords and Vivup – which collectively account for approximately 80 per cent of the market.

Last year, it published the findings of research which showed that one in three employees who had not previously participated in the scheme said that was due to their income being too low, meaning they could not take part. Meanwhile, one in 10 said that they were unable to participate due to their self-employed status.

The organisation says that “as part of steps to protect workers who opt to take their pay below NMW by joining the scheme, Alliance members will introduce a series of ‘safeguarding mechanisms’ to ensure the process remains clear and transparent.

“Safeguards include integrating cost calculators within the application process and a verification step to the application process, requiring applicants to confirm they have used the cost calculator and are aware that salary sacrifice payments could bring them below NMW.”

Labour has also given its support to the changes being called for, with Shadow Roads Minister Gill Furniss MP, saying: “The Cycle to Work scheme has been shown to make bikes more affordable and accessible to a wide range of people.

“They have a proven track record of encouraging those who have not cycled before to take up active travel.

“This delivers such a wide range of benefits, including improving people’s physical and mental health, improving air quality and easing congestion on our roads.

“There is no path to net-zero without green transport and it is vital Ministers do more to encourage people to cycle to work, increase access and take-up of this popular scheme.”

In the first six months of the coronavirus pandemic, from March to September 2020, members of the Cycle to Work Alliance saw a 60 per cent year-on-year increase in new members, with key workers in particular looking to switch to two wheels for their commute – for example, a 111 per cent increase in new participants among London Ambulance Service staff, 67 per cent in the Metropolitan Police and 47 per cent in Transport for London workers.

> How to save money on a bike with the Cycle to Work scheme