A proposed cap on the Cycle to Work scheme, expected to be announced in the UK government’s upcoming Budget, has divided opinion among Cycling Weekly readers.
The scheme allows UK residents to save tax on bike purchases by ‘loaning’ them from their employers. Cyclists can save up to 42% on the cost of their bike, which since the initial £1,000 cap was axed in 2019, counts five-figure road bikes as much as £200 beginner options.
Last week, the Financial Times reported that the government is now set to reintroduce a limit on how much a person can claim on the scheme. What that limit will be remains to be seen, but one source told the FT the scheme should not be about “giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills”.
Responding to the news across our comments sections, some readers agreed. “A guy I know bought a very expensive road bike last year and another nice one this year, both on the scheme apparently. How many ‘cycle to work’ bikes does a person need to be subsidised for?” one reader said. “Why do you need a 10k bike to get to work? And the best bit, he doesn’t even cycle to work. It’s a joke and needs some control.”
Another said the scheme, as it stands, “disproportionately benefits” higher rate taxpayers, who use it to save thousands on expensive bikes. “It is absolutely unjustified in the current economic climate,” they said. “Let the rich buy their own bikes without the taxpayer chipping in.”
One reader said they used the scheme to buy a £12k S-Works bike and an £8k Santa Cruz, “as a means of avoiding the 60% tax trap that kicks in for earnings over £100k – I appreciate the sentiment that this is not in the spirit of the scheme and that no-one will feel sorry for me, but the entire tax system does not operate in the spirit of fairness and if the [government] isn’t going to play fair then neither am I.
“The scheme is flawed, undoubtedly,” they continued. “What [goverment]’ scheme isn’t. Should something be done to improve it for lower earners? Probably. Will a cap fix any of its most significant problems, improve it for those who remain eligible, or bring in more tax revenue overall? Nope, nope and nope. It’s just playing politics.”
So will the government return to the £1,000 cap? One reader believes this would be “progressive not regressive”.
Bikes, however, have grown more expensive since the cap was scrapped in 2019, and e-bikes, which generally cost upwards of £1,000, are more prevalent. As such, one reader suggested a cap should be fixed at “a sensible level that doesn’t stifle the policy intention of encouraging people onto bikes as sustainable travel”. The same reader did not propose a figure, but backed a “differential gap – i.e. one level for non-electric and an extra £1k on top for electric”.
Given the popularity of the Cycle to Work scheme – there were 209,00 claims in 2023-2024, according to the FT, and more than two million have used it since it was launched in 1999 – it has helped inject money into the cycling industry.
Last month, data from the Cycle to Work Alliance showed the scheme brought in £219 million in bike and accessory sales last year. There is now a fear that limiting it could be disastrous for retailers.
“Bad news for an already struggling cycling industry with heaps of bike shops already going bust and closing down recently,” one reader said. “This will definitely close a fair few more.”
Another said: “It’s an economic measure that helps the sector sell bikes. I don’t see why the government shouldn’t support it.”
A different reader, however, disagreed with this sentiment: “It is called ‘The Cycle to Work Scheme’. Not ‘The Support the Bike Industry Scheme’ nor ‘The Replace the Family Car Scheme’,” they said.
Some readers pointed to the health benefits the scheme encourages. As Cycling Weekly’s news editor Adam Becket wrote in his op-ed this week: “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.”
One reader concurred: “The health benefits of the scheme will cost less to the NHS in the long term. It should be improved rather than downgraded.”
Another saw it differently, saying the lost tax revenue from the scheme could go towards the health service, among other things. “Social services, NHS, defence, police, so many things should come before this ineffective and unfair bonus scheme,” they said.
The Chancellor, Rachel Reeves, will announce the government’s 2025 Autumn Budget on 26 November. You’ll be able to read all about the implications for cyclists in the UK on Cycling Weekly – and if you’d like to tell us what you think, don’t hesitate to leave a comment below.
