Cycle to Work scheme bikes (temporarily) don't have to be used for commuting

In other words, a good old rort.

I used the C2W 3 times, a road bike, CX bike and entry level TT bike. The CX is also my winter bike and has been used for a few comuttes but the other 2 only ever saw the office from the back of my van 

I've looked at the scheme a few times and i've never once seen that requirement for bikes to be used exclusively to and from work. That would be a dealbreaker for me.

Jenova20 wrote:

I've looked at the scheme a few times and i've never once seen that requirement for bikes to be used exclusively to and from work. That would be a dealbreaker for me.

no one has used the term exclusively, and it is not in the guidance.

But many people are not following the mainly for commuting definition and some go as far as never used for commuting.

It doesn't have to be used exclusively for work, only the "majority" of trips are required to be "qualifying journeys" (to/from work, or other business use).

The schemes I've looked at do all mention it somewhere, although it's certainly not prominent.

As the other replies to this story, and various other stories about the C2W schemes have made very clear, it is an open secret that this requirement is routinely ignored. There is no requirement to log or record usage, so no mechanism to enforce the rules. And none of the main parties have an incentive to enforce the rules - employees get cheaper bikes, employers reduce their NI contributions, bike shops get more business, and the scheme providers take a fat cut for doing very little. HMRC seem happy to look the other way too for one reason or another.

One issue with removing the requirement entirely would be that it would open it up to people buying as many bikes as they liked to sell on, hire, etc.. At least the requirement that it be used for commuting provides a mechanism, however imperfect, to come down on anyone who tries to blatantly abuse the intent of the scheme.

I do wonder whether, if they could look at the whole picture, the effect on government expenditure might be revenue poistive if they reduced (or eliminated) VAT on pedal cycles (including but not limited to e-bikes).

The positives are legion. The cycle industry would grow yielding more business taxes, employment etc. It would contribute towards CO2 reduction targets (which also cost money). And crucially (which differentiates it from "so why not just get rid of VAT on everything?") it reduces costs in the NHS.

Massive tax subsidies are thrown at motorised "emission free" vehicles on the grounds of CO2 reduction alone. Pedal cycles should be eligible as such in any case, with benefits to the NHS putting their case well in front of electric cars.

jollygoodvelo wrote:

I think the many faults of the CTW schemes were discussed here very thoroughly the last time they hit the news, but the 'official' stipulation that the purchased bikes (and/or equipment) must be used for work purposes really needs to go permanently.

Cycling is a net good for the economy, supporting manufacturers, shops large and small, independent mechanics, tourism, and reducing NHS healthcare spend.  Proved, many times over. 

The benefits should not be limited to people who work in a traditional employer/employee relationship, or even those who are in work at all; and it should certainly not be a greater benefit to those who pay higher rate tax.  The government has a simple tool available to achieve this - zero-rate or at least 5%-rate all bikes and bike equipment for VAT.

You have hit the nail on the head with your last paragraph. CTW only works under HMRC rules if the item being purchased is to be used for predominantly work purposes, otherwise it would come under the Benefits in Kind rules and actually be taxed, rather than tax-relieved. If the stipulation were just removed, that would make it unworkable as you would be asking HMRC to sanction employers purchasing personal items for staff and saving the tax on those items. They are not going to do that. 

The fairer way of encouraging bike usage would be to remove or reduce VAT which benefits everyone equally. However, how many car journeys are undertaken by people simply driving to and from work every day, I am not totally opposed to a scheme that encourages people to do that by bike instead. 

The self employed can also claim tax relief for transport costs related to carrying out their business, which would include purchasing and servicing a bicycle. 

bobbypuk wrote:

I've just had to go into the office. a 20 mile round trip that I would usually do by public transport (2 buses, a train and a half hour walk - not something I'm comfortable with at the moment). Had to use my good summer bike in foul weather for that as I had no other option. If I get a bike through C2W it will be used every week/month whatever for trips to the office but at the moment that will not be a majority of use so would not be eligible.

Maybe just get a car?

Presumably you're using the summer bike for non-commute trips at the moment anyway, so couldn't you just carry on doing that and reserve the new one for commutes? Or at least say that's what you're doing...?

Quote:

In a statement to the House of Commons on 17 December, Mr Norman said

Quote:

Seriously? Does anyone actually think that anybody's checking up on this stuff?

One of the issues I have with the current CTW scheme is that if you got a bike and used it once a month to cycle to the office and never used it for anything else, that would be within the scheme rules.

On the other hand, you could cycle to the office once a week, but if you also use it to pop to the shops a couple of times and take it out for a bit of fresh air at the weekend, that would be against the rules.

OnYerBike wrote:

One of the issues I have with the current CTW scheme is that if you got a bike and used it once a month to cycle to the office and never used it for anything else, that would be within the scheme rules.

On the other hand, you could cycle to the office once a week, but if you also use it to pop to the shops a couple of times and take it out for a bit of fresh air at the weekend, that would be against the rules.

Is that true though?

To be fair I've never, ever heard of them checking up on anyone ever regarding this. It would cost way too much for zero benefit. At the end of the day people riding bikes are getting exercise which helps the nhs and so on in the long run. And tax rebates/avoidance in the rest of the economy is in the 100's of billions per year anyway. Start there if you wanna claw money back

EddyBerckx wrote:

OnYerBike wrote:

One of the issues I have with the current CTW scheme is that if you got a bike and used it once a month to cycle to the office and never used it for anything else, that would be within the scheme rules.

On the other hand, you could cycle to the office once a week, but if you also use it to pop to the shops a couple of times and take it out for a bit of fresh air at the weekend, that would be against the rules.

Is that true though?

To be fair I've never, ever heard of them checking up on anyone ever regarding this. It would cost way too much for zero benefit. At the end of the day people riding bikes are getting exercise which helps the nhs and so on in the long run. And tax rebates/avoidance in the rest of the economy is in the 100's of billions per year anyway. Start there if you wanna claw money back

certainly that is the implication of the text, the bike must be used mainly for commuting.

Personally I always intepreted that as most trips, not most miles. So If I cycle commuted 4 days, that would be 8 trips, and I wouldn't think twice about using it at the weekend. But If I were only cycle commuting 1 day a week, then multiple trips at the weekend would be strictly against the rules of the scheme. Of course no one is checking. 

I always (when I used to go to an office) idly wondered whether my ~25 mile loops on the way home from work could be counted as commuting. Or could I only count the 6-7 miles that I would have done if I'd gone direct, and the rest would count in the 'other use' column?

EddyBerckx wrote:

Is that true though?

As far as I can tell, yes. I'm not a tax lawyer or anything, but the official guidance (here) states that "At least 50% of the cycle’s use must be for ‘qualifying journeys.’" There's nothing else in there to suggest anything different or to put numbers on a minimum number of qualifying journeys.

To be clear, I'm not saying we need a crack down on people flouting the rules; I'm saying that the rules as they currently stand are stupid.

In fact, I would go one further and say the whole scheme is fundamentally flawed by being linked to employment. The government is quite happy to throw £3,000 at people to buy an electric car with no strings attached, so I see no reason why they couldn't do something similar for bikes.

Well ask any of the shops trying to claim their money back via the voucher scheme to repair bikes how organised some branches of the government are with these things.

Its linked with employment because it's dead simple to setup a scheme via paye tax systems. Remember the scheme gives you tax savings but actually operates as an interest free loan for 12 months,which helps lower wage earners afford a bike they may not otherwise have been able to,or afford credit for, and using payroll guarantees that money is then repaid.

That's why just cutting VAT wouldnt achieve the same aims, plus it's designed to shift people towards cycling to work which helps lower congestion,demands on offices for spaces to park etc. Just giving people vouchers to buy bikes theyd not consider riding to work on at all, at least there is some nudge towards that with this as its setup,even if people chose to not follow the commuting rules, though remember in the T&Cs you sign up to,you agree to that rule, and theres nothing stopping HMRC choosing to investigate it.

Plus you dont then have to have the debate about why cant runners be given vouchers for trainers, body builders vouchers for gym membership, swimmers vouchers for well you get the idea.

There are lots of activities that benefit health,mental well being and save the NHS money, but as GMBasix said the best thing is not to rock the boat that nobody has been trying to capsize for more than 20 years now.

Cycling to work is a good thing... but so is cycling to school, cycling to the shops, cycling to the cinema etc. It looks like only ~15% of all journeys are commutes, plus another 3% which are for business use and therefore would count as qualifying trips (https://www.gov.uk/government/statistical-data-sets/nts04-purpose-of-trips).

I can appreciate that the 0% loan aspect is valuable to some people, but I still think there are other options that could be just as useful. The government also directly hands out 0% loans on things like home energy efficiency improvement, so that I'm sure something could be arranged if there was a will.

I would broadly be supportive of a VAT cut on all sporting goods. That said, I think there's a clear argument that no-one ever bench-pressed themselves to the shops! 

Awavey wrote:

Its linked with employment because it's dead simple to setup a scheme via paye tax systems it forces employers to take on the burden of administering it, rather than the government.

It's not so much that it's inherently easier, cheaper, or more efficient than if government administered it directly. It's more that recent governments have looked for every opportunity to shift cost and effort onto other people's shoulders so that they can cut them out of the civil service and make themselves look more 'efficient'. cf. the push to get to everyone on to self-assessment for Income Tax, the shifting of responsibilities onto local councils, the new arrangements for registering for and declaring VAT on overseas sales, etc., etc.

In Australia, not only is government refusing to give any subsidy to EV purchases, they are looking how to tax people that buy EV's, as the government is missing out on fuel tax revenue.

OnYerBike wrote:

One of the issues I have with the current CTW scheme is that if you got a bike and used it once a month to cycle to the office and never used it for anything else, that would be within the scheme rules.

On the other hand, you could cycle to the office once a week, but if you also use it to pop to the shops a couple of times and take it out for a bit of fresh air at the weekend, that would be against the rules.

I stupid (for the reasons you give) and completely unenforcable - so what exactly is the point.

Also technically, if you are working from home, does that mean that every journey that starts from and/or ends at home is a journey to and/or from work?

jh2727 wrote:

Also technically, if you are working from home, does that mean that every journey that starts from and/or ends at home is a journey to and/or from work?

Only if they occur before work or after work on a week day