UK’s Tax Scheme Update Targets Increased E-Bike Use
LONDON, UK – Cycle to Work (C2W) is a UK government scheme designed to help employees buy bicycles, e-bikes and cycling accessories to be used for the purpose of cycling to work. It works by rebating tax paid by the employee against the purchase of the bike. The popular tax ‘salary sacrifice’ scheme that rebates tax against a bike for commuting to work now includes e-bikes that retail over GDP 1,000 (1,125 euro
Employers must join the scheme in order to make it available to their employees. The C2W website states “Cyclescheme enables your employees to save 25-39% of the cost of a new bike and accessories whilst also spreading the cost. It’s completely free to join and easy to administer online.”
Cleared up confusion
Previously it was widely believed (though the belief was not true in all cases) that a GDP 1000 cap on purchases under the scheme existed for each employee. Any confusion has now been cleared up as the UK government has announced refreshed C2W guidance, making it easier for employers to provide bicycles and equipment, including e-bikes, worth over GDP 1,000.
This opens up the scheme to those who may be disabled, disadvantaged or even those who are older.
The recent government press release updating the 20 year old scheme says “The refreshed guidance will make it easier for employers to provide bicycles and equipment including e-bikes worth over GDP 1,000, by making it clear that FCA authorised third party providers are able to run the scheme on their behalf.”
The FCA is the financial industries regulator (the Financial Conduct Authority) and previously only a limited number of accredited suppliers registered with the FCA could offer GDP 1,000 plus bikes and e-bikes.
Push more sustainable means of transport
It is also clear from the press release that the advice is part of a push to encourage more sustainable means of transport specifically by encouraging the uptake of e-bikes, many of which are of course priced at over GDP 1,000, as the press release adds: “As well as boosting air quality and reducing emissions, the refreshed guidance announced today could also make daily commutes cheaper. A recent survey of 2,000 commuters (commissioned by Evans Cycles) estimated that by switching from car, bus, tube or train to e-bikes, commuters could save an average of £7,791 (8,760 euro) over 5 years.”
In September last year, a YouGov poll of employees found that 20% would be interested in buying an e-bike should the ceiling of the cycle to work scheme be raised above GDP 1,000.
The UK government says it plans to invest around £2 billion on active travel over the course of this parliament with the C2W scheme being part of this budget.
‘Welcomed by all’
“The removal of the Cyclescheme cap by Central Government is welcomed by all,” said Lawrence Boon – Cyclescheme director, Hawk Incentive. “Bike prices have significantly increased since the scheme began, almost 20 years ago, meaning that many people cannot afford an adequate bike for their commute. Not only will this news be welcomed by existing cyclists, but it also opens up the scheme to those who may be disabled, disadvantaged or even those who are older – as suitable bikes for many of these groups are more expensive.”
“Research has proven that cycling to work has a positive impact on mental / personal health as well as productivity – but by committing to cycle a few times a week could also mean less guilt free evenings when you’re too tired to go to the gym. If you’ve not cycled since childhood you can still take advantage of this scheme as ‘cycle to work’ does not always mean you have to cycle the entire distance – why not cycle to the station or from the bus stop into work to begin with – or even try an electronic bike, which is also perfect for longer commutes and it still gives you the option to cycle.”