Chancellor expected to introduce new limit on how much can be spent on a bicycle through cycle to work scheme
Rachel Reeves has drawn up a plan to cut tax benefits for workers using salary sacrifice schemes to buy expensive manual and electric bicycles, according to a report.
The chancellor is expected to introduce a new limit on how much people can spend on a bicycle through the cycle to work scheme in this month’s budget, the Financial Times said, citing people familiar with budget preparations, amid concerns that subsidising cycle purchases is not the best use of taxpayers’ money.
One government figure told the newspaper: “Cycle to work should be about helping ordinary commuters switch to greener travel, not giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills. Taxpayers shouldn’t be footing the bill for luxury leisure.”
The cycle to work scheme launched by Tony Blair’s Labour government in 1999, allows employees to buy a bike and accessories with an interest-free loan from their employer. The cost will be deducted from the employee’s gross salary monthly, before income tax and national insurance are applied.
