Partner Article

Cycle To Work Scheme – has the taxman put a spanner in the spokes?

David Cameron has this week announced that £144 million is to be spent over the next two years to ‘cycle-proof’ English roads, and this comes hot on the heels of The Office of Tax Simplification suggesting that HMRC needs to carry out a proper evaluation of the cycle to work scheme and look for ways of streamlining its administration.

So why not abolish the whole thing? Employers can provide interest-free loans to employers of up to £5,000, rising to £10,000 next April, without any tax issues, and that’s enough to buy a pedal cycle for all the Olympic hopefuls in the office. It should even leave enough to fund a season ticket too, for use on those wet days, icy mornings, trips with a laptop and all the other occasions when a bike doesn’t quite provide the ideal way of getting to and from work.

We have said it before, but we don’t believe that anyone who wants to cycle to work is going to be put off by the lack of an employer-owned bike. The current cycle to work schemes don’t even require employees to confirm that they have use their bikes for journeys between home and work or between workplaces, even though that is an essential condition of the tax break. Maybe the schemes are intended to boost the sales of cycles? Increasing the use of public transport and/or providing tax breaks for employer-funded gym membership would reduce car use and boost employee fitness without risking life and limb on the roads and failing to comply with tax rules.

Lesley Fidler

This was posted in Bdaily's Members' News section by Baker Tilly .