Cycle to Work- rich people's tax perk?

Stevo_666

Father Jack wrote:

who says I don't pay tax?

Not me.

kajjal

bompington wrote:

Kajjal wrote:

Rich people don't pay tax which is why they have so much money. Imagine if you could pay an a financial advisor to reduce your income tax + NI to under 5% and how much extra money you would have. You could then pay the financial advisor again to invest it for you tax free and the circle continues.

You wouldn't need a cycle to work scheme

More hackneyed left-wing lies. I think perhaps you need to read this.
The top 1% of earners in the UK pay over 25% of all the income tax, a proportion that is going up under the current government.

rolf_f

Father Jack wrote:

who says I don't pay tax?

I'm not sure anyone has or is this a rhetorical question?!!

Look at it this way - low earners pay no tax, middle earners pay some tax, high earners pay more tax. C2W just reduces the 'some' and 'more' but they still aren't getting 100% tax reductions.

Your complaint is like going into a shop and being given a free item and then complaining that you are being discriminated against because there is no BOGOF offer on it.

father_jack

"Your complaint is like going into a shop and being given a free item and then complaining that you are being discriminated against because there is no BOGOF offer on it."

No. It's like someone in a top hat getting BOGOF but when it comes to me they say "you're excluded, now go away peasant"

jamesco

Rolf F wrote:

low earners pay no tax

Except for VAT, excise duties, council tax, various fees etc. "Only the little people pay taxes" wasn't said by someone struggling to pay her food bill...

More on topic, yeah, C2W is a tax perk in my opinion. It seems like a real kludge to achieve a worthy goal - getting more people cycling more often - and does it with a lot of overhead: administrative costs for companies and employees, commissions paid by cycle shops, loss of SoGA protection etc., let alone the foregone tax revenue. It is unfair that the more you earn, the more you benefit from the 'discount'.

Plus £1,000 is far too much for a commuting bike* and really just a reward for cyclists to perform their hobby. £500 would be more than sufficient, but the incentives are such that anyone who could benefit from the scheme would be silly not to take advantage of it.

*clothes, panniers and all the rest don't need to cost much, either. Bromptons are not the only folders.

surrey_commuter

Father Jack wrote:

"Your complaint is like going into a shop and being given a free item and then complaining that you are being discriminated against because there is no BOGOF offer on it."

No. It's like someone in a top hat getting BOGOF but when it comes to me they say "you're excluded, now go away peasant"

no it is like me complaining I don't get an EU grant for setting aside agricultural land despite the fact that i am not a farmer.
I am also pretty narked about not getting paid for feeding electricity back into the grid... despite not having solar panels or a windmill.

surrey_commuter

Father Jack wrote:

wots this mean
http://postimg.org/image/h3mzf0f1n/

It means that you need to use "in private" browsing when looking at porn. From that "they" (and us) know that you are single and have a liking for asian girls

veronese68

Father Jack wrote:

No. It's like someone in a top hat getting BOGOF but when it comes to me they say "you're excluded, now go away peasant"

No it's like being told you can't have the free second item on a BOGOF offer when you haven't paid for the first one. If you don't pay for something you can't have the perk that goes with it.

inbike

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

surrey_commuter

inbike wrote:

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

OK I will bite - in what way is this unfair?

kajjal

Surrey Commuter wrote:

inbike wrote:

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

OK I will bite - in what way is this unfair?

I am guessing they mean the better off you are the larger the tax break, which means the less well off benefit little if at all.

surrey_commuter

Kajjal wrote:

Surrey Commuter wrote:

inbike wrote:

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

OK I will bite - in what way is this unfair?

I am guessing they mean the better off you are the larger the tax break, which means the less well off benefit little if at all.

by running the scheme through the income tax system it makes it relatively easy to administer as you are transferring the costs onto the company.

what alternative scheme would you put in place?

imatfaal

Surrey Commuter wrote:

inbike wrote:

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

OK I will bite - in what way is this unfair?

Well if it was a VAT rebate rather than an Income Tax rebate then there would be a flat 20% saving for the whole spectrum of purchasers rather than a regressive =0 for minimum wage earners, >0 for average earners, and >>0 for higher earners. I like the idea of the scheme but tax rebate schemes are by their nature more often focussed on relieving the burden on those who can afford to carry it. I think the only way in which it is unfair is that more fair options can be dreamt up fairly easily.

kingstongraham

Surrey Commuter wrote:

Kajjal wrote:

Surrey Commuter wrote:

inbike wrote:

It's possible for a scheme to be both:

- A good idea
- Unfair

At the same time. Like this one is.

(Free bikes for people on minimum wage would be a fantastic scheme. Giving bikes to people who are leaving the benefits system to go back to work would also help a great deal. Campaign for these things if you think the UK should have them!)

OK I will bite - in what way is this unfair?

I am guessing they mean the better off you are the larger the tax break, which means the less well off benefit little if at all.

by running the scheme through the income tax system it makes it relatively easy to administer as you are transferring the costs onto the company.

what alternative scheme would you put in place?

Make complete bikes under £300 zero rated for VAT. Simpler again.

If you are looking at £1000 for a bike to ride to work, you don't need my help.

guy.spartacus

KingstonGraham wrote:

Make complete bikes under £300 zero rated for VAT. Simpler again.

If you are looking at £1000 for a bike to ride to work, you don't need my help.

Surely that will just encourage manufacturers/retailers to bump their prices by 20%?

surrey_commuter

If they want to encourage people to ride to work they should save the money and use it on providing facilities for people when they reach work.

guy.spartacus

By 'they' I think you're referring to the government

Why would 'they' invest taxpayers money in private company's showers and changing rooms?

The Rookie

Someone earning enough to get the full tax break at 40% will be paying somewhere around £560 a month in tax, so they save about £35 a month, or about £17 a month more than a basic rate tax payer, they're still paying a fair amount of tax......you have to be rather paranoid to consider that such a huge issue I think.

All quick rough calcs before anyone gets picky, two many variables.

tkqpr

I wonder if someone can tell me how it works if you are self employed?

Although I mainly work from home I regulary use my bike for work purposes, banking/post/deliveries etc. However my accountant said (a few years back now) that I couldn't use it.

Has the rules changed?
Is there a limit?

Any help or experiences greater appreciated

Cheers in advance

surrey_commuter

guy.spartacus wrote:

By 'they' I think you're referring to the government

Why would 'they' invest taxpayers money in private company's showers and changing rooms?

Sorry was playing devils advocate by trying to demonstrate the administrative ease of the current scheme.

surrey_commuter

The Rookie wrote:

Someone earning enough to get the full tax break at 40% will be paying somewhere around £560 a month in tax, so they save about £35 a month, or about £17 a month more than a basic rate tax payer, they're still paying a fair amount of tax......you have to be rather paranoid to consider that such a huge issue I think.

All quick rough calcs before anyone gets picky, two many variables.

But say they are earning £120,000 a year? Then they would save £50 a month so taking their monthly tax bill down to £3,450. How could anybody allow something so unfair - I blame Thatcher

veronese68

tkqpr wrote:

I wonder if someone can tell me how it works if you are self employed?

You don't have an employer to buy the bike for you so I doubt it works in the normal way. Would it not be better off to put it down as a business expense and deal with it that way?
I'm not self employed so am guessing a little here.

bikes`n`guns

Is it just me or does this all sound like somebody wanting me to give them even more of my wages so they can keep more of theirs ?

The Rookie

Self employed is great, your company buys the bike (vat free and tax write off) and rents it to the employee (you) at any rate they like to specify (there are no rules on the amount) after a few years it's deemed to have no value and the company can then gift it to you with no tax liability. Just read the HMRC guidance and you won't go far wrong, my Brother in law did it that way.

rick_chasey

Fairly sure an old boss did something like that when he purchased all his various Ferraris and watches.

father_jack

so did another for his own home, building materials.

The Rookie

You can do that but it needs to be genuine tax avoidance and not evasion, for example it's common for company's to have a nominated room in the house as an office and you can claim some costs from the house to a company, for a car, if it's very pricey then having it as a company car and just paying the top level company car tax on it makes a lot of sense, for lower end cars it doesn't.

rick_chasey

The Rookie wrote:

You can do that but it needs to be genuine tax avoidance and not evasion, for example it's common for company's to have a nominated room in the house as an office and you can claim some costs from the house to a company, for a car, if it's very pricey then having it as a company car and just paying the top level company car tax on it makes a lot of sense, for lower end cars it doesn't.

That's when a Hong Kong holding company becomes useful

N0bodyOfTheGoat

For basic rate tax payers, if for example they bought a £1k bike on a scheme, how much do they save since new HMRC rules regarding a fair charge for transfer of ownership kicked in?

Before this rule change, employers were typiclly buying ownership of the bike for ~£30, isn't it now ~20% of the trip for bikes over £500?

I think that these days, the scheme is not always the best way of buying a bike, using sales and cash back could be cheaper.

dhope

You just rent it for a few more years at a nominal amount, say £1 a year. Then by the time it's ~5 years old the value is 0