Like various other niche mechanisms, there is poor awareness of cycle to work. Otherwise it would cause uproar and be certainly at best modified and certainly not left how it currently stands. Which is probably just as well really for many of the people on here. Support the idea of the thread as it actually lists what people have got out various years.
Cycle to Work Scheme - number of bikes....
- Thread starter GrumpyGregry
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Like various other niche mechanisms, there is poor awareness of cycle to work. Otherwise it would cause uproar and be certainly at best modified and certainly not left how it currently stands. Which is probably just as well really for many of the people on here. Support the idea of the thread as it actually lists what people have got out various years.
OP
OP
GrumpyGregry
Here for rides.
Note; Working for an organisation which, broadly speaking, cannot reclaim VAT I get no relief from the VAT element of the cost of the bike(s) under the scheme which significantly reduces the savings.
Strictly there is no tax benefit to the employer - the tax he previously paid over to HMRC is part of the gross salary that you have now sacrificed under the scheme. Ditto employee's NI contributions. What he saves is employer's NI and (if relevant) pension contributions.
Re the short windows of the scheme - when we set ours up, the provider assumed we wanted to do it as a limited window and we had to be quite firm that it should be all year round (big organisation, 8000+ staff, high turnover) but I don't recall anything in the small print which required that.
I think HMRC have tweaked that - some guidance came out last year (I think) which our lot interpreted to mean the employer had to charge VAT on the bike hire payments (=sacrificed salary). So that now wipes out the VAT savings for those companies who could reclaim the VAT.
In our case it was a double whammy. We had an odd three-way system where the charity paid for the bikes (and couldn't reclaim the VAT) but the scheme contracts were between our linked NHS Trust and their employees (correctly, as they aren't employees of the charity). So we were facing the charity having to pay the VAT inclusive price for the bikes, and the NHS Trust having to charge VAT on top to the employees - totally daft. Thankfully, now it's all set up and doesn't need a big cash outlay (for the first three months, the take-up was so big that we paid out nearly £60k for bikes!) the Trust are running it for themselves.
The tax administrators seem determined to find ways of reducing the attractiveness of the scheme.
You have a scheme which is basically a mechanism that was hastily bodged together on a budget (finance act) and one or two other bits of lesser well known legislation (that are also out of date) to make it work on the 'political cheap'. In other words no new 'proper' primary legislation and for good reason - it would probably not have seen the light of day otherwise. Why on earth wouldn't agents within the state act to minimise what is a very blatent fiddle (and chapeau to the guys that thought it up)
?I would agree with your sentiment if the scheme had been done 'properly' as that would suggest some kind of mean determination to undo what law makers and the executive had clearly made a conscious decision to follow.
I'll put up one more interesting side effect that you may not like. If one believes in the existence of efficient mechanisms (which is a very big assumption, particularly in this case to say the least
) and that as a corollary of that that it should be targeted towards those that 'need it', it is harmful because it encourages behaviours in the system that are undesirable. It encourages a culture of people not only viewing things in terms of personal hypothecation (without the trade off of openness) but that the sort of stuff that DCLane wrote above it not only being acceptable (I disagree very strongly), but that it's completely normal. You could argue that we've seen this in recent budgets where there has been kicking and screaming by lobby groups over what would be regarded as fairly normal changes in the past.I'm doubtful about this existence problem. So it really comes down to values and what you think the scheme is for. I don't literally think the scheme is for cycling to work and that there should be a tax collector staring through your dining room window at breakfast carefully checking that you're in some lycra and then following you to work disguised as a WVM. On the other hand it is as I said in the previous post a lot to do with signals and intent. I'm quite willing to entertain almost any point of view in the political arena on this, why? Because it shows a damn site more clear message than how we did it (even for the right reasons) even if I think their arguments are completely crazy.
Andrew_Culture
Internet Marketing bod
- Location
- The People's Republic Of Suffolk.
Thanks for the explanation RVW.
smutchin
Cat 6 Racer
- Location
- The Red Enclave
I've bought two bikes through our company's scheme. One is a carbon road bike, the other a singlespeed CX bike. I use both for commuting, and considerably more than 50% of my annual mileage is commuting - of the 6400km I've ridden this year, 4700km has been commuting. About 500 of that 6400km has been done on my Brompton, which I didn't buy through the scheme. Which bike I take out of the garage in the morning depends on a range of factors but I'm glad to have a range of different bikes to suit different circumstances and I consider myself lucky to be able to have that choice.
I don't feel the need to morally justify taking advantage of a tax benefit. I'm happy to pay tax on the whole. I strongly believe in the principle of general taxation to pay for public services whether or not I personally benefit from those services. But if there's a tax benefit I can legally take advantage of, I will do so. I have a company pension too. I have a wife and son to support so can't afford to put myself out of pocket on principle.
If we're genuinely worried about people who really need tax benefits suffering through the selfish actions of others, we could be frying some far bigger fish than people who take advantage of cycle to work schemes. I'm not bothered about people who exploit the scheme to bring themselves inside tax thresholds or buy a bike for their wife. In the grand scheme of things, they aren't the problem.
d.
I don't feel the need to morally justify taking advantage of a tax benefit. I'm happy to pay tax on the whole. I strongly believe in the principle of general taxation to pay for public services whether or not I personally benefit from those services. But if there's a tax benefit I can legally take advantage of, I will do so. I have a company pension too. I have a wife and son to support so can't afford to put myself out of pocket on principle.
If we're genuinely worried about people who really need tax benefits suffering through the selfish actions of others, we could be frying some far bigger fish than people who take advantage of cycle to work schemes. I'm not bothered about people who exploit the scheme to bring themselves inside tax thresholds or buy a bike for their wife. In the grand scheme of things, they aren't the problem.
d.
smutchin
Cat 6 Racer
- Location
- The Red Enclave
If one believes in the existence of efficient mechanisms (which is a very big assumption, particularly in this case to say the least
Unfortunately, as with most benefits, targetting the benefit would make it a whole lot less efficient than it already is...
d.
MisterStan
Label Required
- Location
- Out there somewhere
Whatr Norm said!
That's missing my point slightly. Some people do genuinely believe that there exists a genuine mechanism out there - it's just that we haven't thought it up. It does exist though. That would counteract that problem (obviously). And you might view these people as crackers (obviously). I think some of it is a scalability thing.
However in a 'cycle to work landscape' of possible schemes that could exist I would see that as quite unlikely that we'd inhabit a bit near optimum (it's possible), unless you thought that most solutions would perturb very slightly from this (another questionable assumption).
smutchin
Cat 6 Racer
- Location
- The Red Enclave
I disagree.
But I agree that "What is the scheme for?" is a valid question. If it's really about providing bikes for people to commute to work on, perhaps the government should specify a particular model of bike (a sturdy, practical one rather than a high-end road bike masquerading as a commuter), buy them in bulk and give them out free of charge to anyone who wants one as a universal benefit. Such a scheme could potentially cost less to the taxpayer than the current system depending on how it was administered, although I dare say our current government would contrive to make sure it came at a high cost to taxpayers and generously lined the pockets of whichever private contractor got the job of supplying the bikes.
d.
Another view (perhaps as few are involved in travel plans on here and even fewer who are seem to comment on it - hmmm). C2W is often part of a travel plan. Travel plans aren't just for people that work somewhere (yeah I know some of you are laughing on the floor in fits of laughter) ...
OP
OP
GrumpyGregry
Here for rides.
This, I like muchly.
Personally I think the scheme was introduced as a benign form of liberal encouragement to promoting consumer spending without promoting personal debt and with a nod to the green(er) credentials of cycling vs driving. It has been good for cycle retailers, chains and LBSs alike, it has been good for cyclists who can access it, and the "harm" done by those of us who take advantage of the rules would appear trifling to the point of non-existence when the practicalities are considered.
If you want to get me started on dodgy tax-breaks for the common man let's talk about those who benefited hugely from mortgage interest tax relief to buy the very homes their children don't want them to sell to fund their care costs.....
