Tax Free Bicycles for British Employees: Cyclescheme
by Warren McLaren, Sydney on 11.28.07
In an attempt to get more Britons out of their cars and into carbon neutral two wheeling, employees in the UK are able to access a bicycle for work commuting that saves them about 43% against the normal Value Added Tax (VAT).
Managed in a similar way to employees who have a company car on a salary sacrifice , employers can give their staff a voucher to purchase a bicycle, to the value of about £1,000 (~$2,000 USD).
The employer owns the bike, but the staff member gets its use for commuting and after hours recreational use. At the end of the Cyclescheme lease period the employee may buy the bicycle at ‘fair market value.’
Secondhand bikes are not permitted under the scheme but electric assist models are. The website has an exhaustive Question and Answer section that should cover most queries. ::Cyclescheme
Great news but your article made it sound like there's a saving of 43% of the VAT rather than the the purchase price.
I've just looked at the website and it looks like there's a potential saving of 43% of the entire cost of the bike.
Well done government, now, all we need is some more cycle ways and we're off!
You might want to tidy up the wording here - it's a saving against the price including VAT, not against the VAT.
This is a positive thing, of course, but I'd be even happier if the duty on bikes was removed as well - currently every bike imported is 'taxed' at 14%, so in terms of duty paid it's cheaper to play a cycling game on the playstation than to actually cycle. Not a great example to set.
I tried this, but the HR dept don't want to do any work as usual. So I con't do it. And worse still I work for the council. So a government department will not act on government legislation because no one is going to force them. Looks like I'll have to get in touch with the local paper just to make the do their own job.