Cycle to Work- rich people's tax perk?

surrey_commuter

Father Jack wrote:

PBlakeney wrote:

I'm confused. (As usual).
So getting people to cycle to work instead of driving is a bad idea?

They're not using it to cycle to work. They're using it to get a tax perk to buy a item they use in their own time, for their own hobby, for the weekend.

No different if I got a £3000 high end gaming computer tax free...oh yeah I use that for "work" because I sent an email to work once... :roll:

You will be pleased to know that the C2W scheme is capped at £1k

The Rookie

You'll be upset to know it's not, that's the maximum without a consumer credit licence, with one there is no limit.

bendertherobot

Indeed. But the majority are capped. I'm sure we'll be told shortly that it should be capped at the level of a basic hybrid.

The Rookie

C2W is fine if you want to buy a stock bike from a normal shop, but you'll get the same spec cheaper from one of the direct model outlets like PanetX anyway.

We just did C2W at work and I would save about £260 on a £1k bike from a shop, or get the same spec from PX for the same price with options being customisable. In the end I bought a London Road frame in the sale and will reframe my current bike into that with a few choice upgrades. Will cost me about £200 for a decent upgrade and I'll have the old parts to sell on.

N0bodyOfTheGoat

The Rookie wrote:

C2W is fine if you want to buy a stock bike from a normal shop, but you'll get the same spec cheaper from one of the direct model outlets like PanetX anyway.

We just did C2W at work and I would save about £260 on a £1k bike from a shop, or get the same spec from PX for the same price with options being customisable. In the end I bought a London Road frame in the sale and will reframe my current bike into that with a few choice upgrades. Will cost me about £200 for a decent upgrade and I'll have the old parts to sell on.

But the big question is, does your purchased LR frame have the correct spec seat tube, or is it one of the apparent many with wider than spec internal diameter? :shock:

The Rookie

I'll find out when I try to fit the seatpost!

The Rookie

Thanks for the heads up, email now sent to Planet X!

kingstongraham

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

You say "give a discount" on the bike then pay for it by deduction in your intended scheme.

Where does the discount come from?

How about the bike shop could claim it from the government.

Right. So, the previous system, which costs X in "lost tax revenue" now costs Y in actual government payments (plus administration).

I don't see the difference.

bendertherobot

KingstonGraham wrote:

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

You say "give a discount" on the bike then pay for it by deduction in your intended scheme.

Where does the discount come from?

How about the bike shop could claim it from the government.

Right. So, the previous system, which costs X in "lost tax revenue" now costs Y in actual government payments (plus administration).

I don't see the difference.

The taxpayer currently "loses" tax receipts per bike sold. In your system there may be a greater or lesser loss as it has to be funded by government. Let's call them equal if take up is the same. All things being equal.

Then you have a government department to run it. An IT system to manage it. Staff to answer to senior managers. People to check it. Forms to fill in. Applications to process. The cost to the taxpayer would be massive.

kingstongraham

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

You say "give a discount" on the bike then pay for it by deduction in your intended scheme.

Where does the discount come from?

How about the bike shop could claim it from the government.

Right. So, the previous system, which costs X in "lost tax revenue" now costs Y in actual government payments (plus administration).

I don't see the difference.

The taxpayer currently "loses" tax receipts per bike sold. In your system there may be a greater or lesser loss as it has to be funded by government. Let's call them equal if take up is the same. All things being equal.

Then you have a government department to run it. An IT system to manage it. Staff to answer to senior managers. People to check it. Forms to fill in. Applications to process. The cost to the taxpayer would be massive.

Like childcare vouchers?

Ben6899

I get the impression that some here think that 40% tax payers should not be entitled to perks.

dhope

Indeed.

I'd feel bad if I didn't pay my butler enough to get into the 40% bracket though...

pblakeney

Ben6899 wrote:

I get the impression that some here think that 40% tax payers should not be entitled to perks.

Funny part is that the rich do not pay 40% tax.

dhope

PBlakeney wrote:

Ben6899 wrote:

I get the impression that some here think that 40% tax payers should not be entitled to perks.

Funny part is that the rich do not pay 40% tax.

And the 1% aren't rich.

Okay, 1% of them are.

kingstongraham

Oh well, I guess everyone's convinced that the best possible system to encourage bike use is for their company to own the bike they've paid for and then to sell it to you a few years down the line at a "fair market price" that you wouldn't accept on ebay... Still seems a bit odd to me.

Ben6899

That is all merely 'on paper', Graham.

Either take the tax break, or don't.

CiB

KingstonGraham wrote:

Oh well, I guess everyone's convinced that the best possible system to encourage bike use is for their company to own the bike they've paid for and then to sell it to you a few years down the line at a "fair market price" that you wouldn't accept on ebay... Still seems a bit odd to me.

What a twist on the facts.

Company stumps up for new bike, poss net of VAT in some cases. Employee 'rents' it for 12 months net of NI & tax, making a big saving on the interest-free loan. Option after 12 mths is to buy it at a 'reasonable value', or continue to hire it to allow its value to plummet to zero or thereabouts, then take ownership for next to or actually nothing.

It's not perfect, but it work well enough.

dhope

KingstonGraham wrote:

Oh well, I guess everyone's convinced that the best possible system to encourage bike use is for their company to own the bike they've paid for and then to sell it to you a few years down the line at a "fair market price" that you wouldn't accept on ebay... Still seems a bit odd to me.

As we've said a few times, fair market value after 5 years is nothing. You just extend the lease for a nominal fee for that long and then the bike is deemed worthless so can be gifted without there being any benefit in kind.
It's very straightforward in practice.

Also, employers can actually save a little bit of money because they're paying lower wages so their NI contributions are less.

twist83

Christ if FatherJack is getting his panties in a twist about this. He would have a heart attack if he saw the amount of Tax & NI I save on my Salary Sacrifice car especially seeing as it pushes me out of the 40% tax bracket

veronese68

So my £1500 bike bought on the ride to work has done about 8,000 commuting miles, does that make me a bad man? I could have done those miles on a cheap and nasty bike, but it would have made me more likely to take the car which defeats the object somewhat.

bendertherobot

KingstonGraham wrote:

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

KingstonGraham wrote:

bendertherobot wrote:

You say "give a discount" on the bike then pay for it by deduction in your intended scheme.

Where does the discount come from?

How about the bike shop could claim it from the government.

Right. So, the previous system, which costs X in "lost tax revenue" now costs Y in actual government payments (plus administration).

I don't see the difference.

The taxpayer currently "loses" tax receipts per bike sold. In your system there may be a greater or lesser loss as it has to be funded by government. Let's call them equal if take up is the same. All things being equal.

Then you have a government department to run it. An IT system to manage it. Staff to answer to senior managers. People to check it. Forms to fill in. Applications to process. The cost to the taxpayer would be massive.

Like childcare vouchers?

The one run by employers?

twist83

Veronese68 wrote:

So my £1500 bike bought on the ride to work has done about 8,000 commuting miles, does that make me a bad man? I could have done those miles on a cheap and nasty bike, but it would have made me more likely to take the car which defeats the object somewhat.

You burn in hell for less than 8200 miles!!!

ANY incentive which gets people on bikes is great. Even if they commute one day a week and the rest is in spare time.

I was always a MTB person. Downhill, XC etc. About 5 years ago my company did the scheme. So I decided to get a road bike. Figured I would commute and it would help with the MTB fitness. 5 years later, I barely ever use the MTB and am a fully subbed up Lycra lout member and would not look back.

May not have been the case had I not gone down the C2W scheme. It has got a couple of chunky's from work into some exercise as well which is a great thing.

veronese68

twist83 wrote:

ANY incentive which gets people on bikes is great. Even if they commute one day a week and the rest is in spare time.
...

It has got a couple of chunky's from work into some exercise as well which is a great thing.

Completely agree, same pretty much applies to me.
There are a couple of people here that now ride that wouldn't have considered it. One guy bought a Brompton so he could get the train and cycle from the station. This worked so well he has now bought a bigger house near the coast because the bicycle combined with train has allowed him a much longer commute. He never would have entertained it had he still been driving.

pblakeney

Veronese68 wrote:

So my £1500 bike bought on the ride to work has done about 8,000 commuting miles, does that make me a bad man? I could have done those miles on a cheap and nasty bike, but it would have made me more likely to take the car which defeats the object somewhat.

Just to add to that. My £2k bike has given me 5 years of pleasurable commuting.
Would it have been better to buy 5 x £600 bikes?

twist83

Nope 6 x £2k bikes is what you ideally need. Assuming a 5 day working week. Leaves one spare.

imatfaal

PBlakeney wrote:

Veronese68 wrote:

So my £1500 bike bought on the ride to work has done about 8,000 commuting miles, does that make me a bad man? I could have done those miles on a cheap and nasty bike, but it would have made me more likely to take the car which defeats the object somewhat.

Just to add to that. My £2k bike has given me 5 years of pleasurable commuting.
Would it have been better to buy 5 x £600 bikes?

Have you just occasioned upon the counter-argument to N+1?

I think the reason PT commuters think it is bizarre to commute on an expensive bike is that they do not enjoy their commute. I love my commute - and I have always presumed most on this forum do - sometime I do it on a knackered on hybrid but come the dry weather I do it on an expensive carbon fibre affair because it just adds to the enjoyment. I have been commuting 4 years - I have a knackered hybrid, a lovely carbon fibre cross bike, and the frame and wheels of an awesome bike mid-build; I am also about 2000 quid to the good on commuting costs.

How can something that is that good - and will get better the more that do it - not be worth supporting? And just because the C2W might target tax-payers does not preclude a different system to provide free bikes / vouchers towards cost to those who do not pay income tax; it is not a zero sum game - multiple systems can coexist to benefit both sectors of society.

mrfpb

C2W suits a lot of people, and proportionally benefits lower tax payers more as a percentage of salary saved. I found it didn't suit me due to the way it affects my average salary pension and tax credits, and this may affect other low to middle earners. Trying to limit it to lower tax earners is likely to create more work and cost to the administration of the scheme than they would save if the higher rate earners bought outside the scheme or at limited benefit within the scheme.

I got my bike at a big discount on an interest free deal, others save more through C2W. Why be jealous of what others are getting if you are getting a good deal.

pblakeney

imatfaal wrote:

Have you just occasioned upon the counter-argument to N+1?

Possibly. I only see the need for 3 bikes. One "good" weekend summer bike, 1 commuter, 1 trail bike.
Why a good commuter? Reliability & enjoyment, 16 miles each way.

The Rookie

Lack of imagination there!

pblakeney

The Rookie wrote:

Lack of imagination there!

Imagine all the holidays you can get instead of bikes.
Mallorca already this year and the Pyrenees to come. And that's just the cycling ones!