ACT calls for ... changes in the cycle to work scheme
Discussion
CYCLE TO WORK - ACT calls for cycle sector to unite to demand immediate change to way Cycle to Work scheme is implemented
https://www.cycleassociation.uk/cycle-to-work/
What's going on here then?
Are cycle retailers really '"funding the scheme"?
"Cyclescheme recently imposed an arbitrary change to its partner agreement with retailers to ensure, what it called, “fairer pricing for Cyclescheme customers”. The move means that retailer partners will be unable to charge additional fees or surcharges on cycle to work purchases made through the scheme. The revised retailer agreement comes into effect on 22nd December 2023."
Employers, employees, employee benefit providers (Halfords / cyclescheme?), bike shops not playing fairly? Employees bearing the brunt of profiteering?
https://www.cycleassociation.uk/cycle-to-work/
What's going on here then?
Are cycle retailers really '"funding the scheme"?
"Cyclescheme recently imposed an arbitrary change to its partner agreement with retailers to ensure, what it called, “fairer pricing for Cyclescheme customers”. The move means that retailer partners will be unable to charge additional fees or surcharges on cycle to work purchases made through the scheme. The revised retailer agreement comes into effect on 22nd December 2023."
Employers, employees, employee benefit providers (Halfords / cyclescheme?), bike shops not playing fairly? Employees bearing the brunt of profiteering?
Most shops are happy to put through Cyclescheme (and other providers) orders at full RRP. The shop loses a cut to Cyclescheme, I think around 10% (some like Halfords are more), but the theory is that they get a bit more business via the scheme so lose a bit of their margin.
When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
sjg said:
Most shops are happy to put through Cyclescheme (and other providers) orders at full RRP. The shop loses a cut to Cyclescheme, I think around 10% (some like Halfords are more), but the theory is that they get a bit more business via the scheme so lose a bit of their margin.
When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
Yep and that’s been their business model since back in 2008 when I 1st used them.When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
sjg said:
Most shops are happy to put through Cyclescheme (and other providers) orders at full RRP. The shop loses a cut to Cyclescheme, I think around 10% (some like Halfords are more), but the theory is that they get a bit more business via the scheme so lose a bit of their margin.
When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
Thanks for that clarification.When bikes are put on sale at reduced prices, the shop's margin is tiny but they usually want them out of the way before a new season or more stock coming in. They'd usually be OK with putting it through cyclescheme but can't afford to just lose 10% of the value to the provider. So they'd apply a surcharge - customer gets their cheaper bike on the scheme, bike shop can afford to sell it to them after the cyclescheme cut. Doubtless some have complained over having to pay more.
Cyclescheme are strong-arming retailers who want to accept Cyclescheme orders that they can't apply any surcharge - any offers they make or prices they show have to apply to scheme users too with no surcharges. Which obviously puts shops in a difficult spot if they want to get stock out of the door.
Shops are already a bit put out by Cyclescheme - they get a bunch of paperwork, they lose a bunch of margin, they take weeks to be paid, they have to give a free 6-week service, and Cyclescheme makes tens of millions of pounds out of doing very little. There's no cost to the employee or employer, mostly it's money going straight from the retailer to Cyclescheme.
I found this too...
https://www.globalcyclingnetwork.com/tech/features...
The reform should probably come from cutting out the scheme providers entirely, they add nothing in reality. Maybe the employee claims it directly from the government on an HMRC portal or something? That would also remove the problems of the bike being technically owned by the scheme/employer and having to be paid off or returned when the employee leaves the company.
ian in lancs said:
Kermit power said:
I think one thing that web page makes absolutely clear is that ACT should really employ a half-decent copywriter, as it took a very large number of words to convey absolutely no clear message other than "Complain!"
That's what I thought...Hence the question!
Me too!
I counted 8 paragraphs before anything was actually said.
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I live >250 miles from my office and pretty much wfh.It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I’ve got a pair of nice emtb’s to cycle in on courtesy of the scheme.
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
It's the same with many salary sacrifice schemes. In the cold light of day it doesn't make much sense, but some people benefit from it so keep quiet about it!It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
Maybe it would be better to do away with the scheme and have a different VAT rate on cycling goods?
Or you could claim back a percentage of cycling goods expenditure through your tax return?
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I work from home now, but I bought a road bike, CX bike and full suss MTB through the scheme.It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
Admittedly I never road the latter to work, but I did ride the first two regularly in both nice weather and s
tty. The savings I made on train fares into Central London outweighed the monthly cost of paying for the bikes every month except August when I was on holiday. 
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
Yeah.It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I have never used it, rather have the freedom and reduced paperwork! Mainly buy high spec second hand bikes.
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I had a bit of a bike habit, own a few CTW Bromptons (roughly half price / interest free over a year)It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
At least they dont take up much space!
Put enough into the pension etc etc to minimise 40% tax
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
I did 3 bikes and commuted.It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
The last time though it’s just as cheap to get a bike in the sale and once it effected pensions I stopped.
Scrap VAT on bikes under £1000. The current scheme favours wealthy high rate taxpayers. I'd be suprised if it has been responsible for any increase in bike commuting.
Anyone who actually switches to bike commuting instead of the bus or train would find it is cost neutral or cheaper anyway without tax perks being needed.
My years of regular bike commuting allowed us to be a one car family rather than a two car family. My shifts meant public transport was not an option. Saved us a fortune.
I am not currently bike commuting. My employer does not provide a locker room or showers. There is more than one barrier to bike commuting.
Anyone who actually switches to bike commuting instead of the bus or train would find it is cost neutral or cheaper anyway without tax perks being needed.
My years of regular bike commuting allowed us to be a one car family rather than a two car family. My shifts meant public transport was not an option. Saved us a fortune.
I am not currently bike commuting. My employer does not provide a locker room or showers. There is more than one barrier to bike commuting.
OutInTheShed said:
How many people are actually cycling to work with CTW bikes?
It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
Are you trying to say my 170mm travel MTB won't be primarily used for commuting? It's widely abused as tax free toy money.
Some employers like it, if it makes it slightly harder for workers to move jobs.
As far as I can tell, the whole scheme is a little shady, there are 3 main providers and they each do it differently. Green Cycle Initiative are my favourite, because there's no limit on bikes and you can (as long as you're employer is happy to do it) pay it back over 3, 4 even 5 years. I used them back in 2019 to buy a Direct Sale bike so had to pay them their fee, it was 2.2%. My latest bike costs £5800, I'll pay £3000 for it (rounded figures) interest free over 3 years.
I'll ride it to work less than half a dozen times a year, maybe more as it's my first eMTB, but I've only got to ride it to work once to comply with the rules as GCI are concerned.
I doubt the Government really care, they've bigger problems to worry about, but the next Government won't care either, it promotes cycling, which is good for everyone, even if some of us are just weekend warriors who use it as a tax loophole to fund our hobbies.
Edited by P-Jay on Monday 11th December 10:14
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