Sometimes, the most popular article on our site is a bit of a surprise, or out of left field. Last week, there was no surprise; the most read piece was about proposed reforms to the Cycle to Work scheme.
For those new here, or not in the UK, Cycle to Work allows people to save tax on new bikes by ‘loaning’ them from their employers, allowing prospective cyclists to save up to 42% on the cost of a full price bike, with payments automatically deducted from their salary. For example, a £2,000 bike for someone on £26,000 a year would end up as £1580, paid for in monthly instalments. It’s a very nifty way to get a bike cheaper, if you’re lucky enough to have an employer who uses the scheme. It’s also a great way of getting people on bikes, which can only be a good thing.
However, change is coming. The reforms are just reported proposals at this stage, ahead of next week’s Budget, but the short version is that some kind of financial cap appears to be coming for Cycle to Work. This, frankly, would be a mistake.
News editor at Cycling Weekly, Adam brings his weekly thoughts on the goings on at the upper echelons of our sport. This piece is part of The Leadout, a newsletter series from Cycling Weekly and Cyclingnews. To get this in your inbox, subscribe here. As ever, email adam.becket@futurenet.com – should you wish to add anything, or suggest a topic.
The Treasury probably sees the tax it misses out on bikes as a loss that needs to be stopped, but this is the classic short-term thinking that brought you cuts to HS2. The benefits from encouraging people to cycle, and to buy bikes, far outweigh the costs of the tax the exchequer doesn’t get, a drop in the ocean really.
More bikes mean more people cycling, something that creates a net benefit for the economy in the long-term due to having a healthier, more productive population that is less reliant on the NHS. More cyclists also results in fewer cars on the road so less congestion and less air pollution, something necessary if we are to successfully turn back the tide of the climate crisis. None of this is novel, or news to you, I’m sure, but it apparently is news to the people who run our country.
A move to limit the amount spent on Cycle to Work would be regressive. The original £1,000 limit was abolished in 2019, and not before time, given the cost of bikes now. It’s not just top-of-the-range racers that cost thousands, but mid-range models, e-bikes, and cargo machines. We don’t know what the limit will be, but it will leave many ordinary bikes outside of it.
Sure, you might have a friend who bought a Colnago on the scheme, which is not what it was set up for, but anything that gets more people cycling is good. Recent stats showed that over a third of C2W users were first-time bike owners, and that the economy gets £4.40 from every £1 spent on the scheme. The system brought £219 million in bike and accessory sales last year. The analysis also showed that it brings the British economy £573 million in annual economic benefits across retail, productivity, health, and household savings.
It’s easy for the government to swing the axe against cyclists, for some reason a hated community; imagine if anything like this threatened drivers. Fuel duty has been frozen since 2011.
The venom some have for cyclists was clear in the briefing given by a Treasury source last week: “Cycle to Work should be about helping ordinary commuters switch to greener travel, not giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills. Taxpayers shouldn’t be footing the bill for luxury leisure.”
Fine, but £4,000 bikes aren’t, sadly, anything ridiculous in 2025. A bike of that cost could be the machine someone relies on to get to work, or take their children to school, or heaven forbid, have fun in the Surrey Hills. None of these are bad things that need to be cracked down on and if you want to talk about ‘luxury travel’, what about the £3,750 grant you can get for buying a brand new electric car. And maybe drive that around the Surrey Hills.
Remember, too, that the £130 million C2W cost the Treasury in 2024-5 is hardly going to turn the economy around. Radical changes are needed, not tinkering with a successful thing to save peanuts.
The Cycle to Work scheme isn’t perfect: too many people are left out of it, whether they are low earners, unemployed, or remote workers. However, none of these things are being tackled by a new limit. There are also concerns over how much some schemes charge local bike shops in commission. This still needs to be looked at, but even so, the industry in the UK relies on Cycle to Work. Changing it could plunge it even further into doom.
The more cyclists, the better, and that’s not just because we’re CW. U-turn, please.
This piece is part of The Leadout, the offering of newsletters from Cycling Weekly and Cyclingnews. To get this in your inbox, subscribe here.
If you want to get in touch with Adam, email adam.becket@futurenet.com, or comment below.
