Ask the Trade: What are the flaws of the Cycle to Work scheme?

According to CyclingIndustry.News’ own Retail Channel Study, use of the Cycle to Work scheme as a sales tool has declined with 46% of independent bike shops and increased in 31%. But what are the causes of this steady decline and could it be attributed to well-discussed flaws in the scheme itself? CI.N asks the trade…

What are the flaws in the scheme and how would you like to see them remedied?

John Clarke, Velospeed
Obviously the cycle to work scheme only applies to employees, so other many are left out (retired, self-employed, unemployed etc). The main issue is the commission taken, and we are planning to stop selling via Cyclescheme because of this. It’s just profiteering at the expense of the retailer, in a business which (the last three months aside) is very tough anyway.

Anonymous, London retailer
First of all, people don’t save as much money as they think through the salary sacrifice.

Secondly, the Government should publish a standard hire agreement that companies can use without the need for a third-party provider.

Finally, the company and employee should be allowed joint ownership of the bike so the company can contribute £1,000 and the employee the balance if they want a more expensive bike.

David Stainthorpe, CycleSense
The major flaw is the variance in commission rates and the time taken to be paid. Green Commute Initiative and Cyclescheme are very efficient and good to work with (though I’m still unhappy about the extortion rate of commission).

Halfords can take up to four months to pay; that’s simply an insult to our business. There should be an agreed rate and I think that 6% is an achievable and affordable level.

Matthew Cleathero, Grounds Cycle Centres
There exists a perception that it’s quite a complicated process and/or a lack of understanding about how the savings are made. The retailer is often left explaining the full process, not just their input.

How much business on Cycle to Work did you do five years ago compared to now and to what do you attribute the change?

David Stainthorpe, CycleSense
We do less business than we did previously, mainly due to the sheer number of providers that have jumped on the bandwagon. That, and I’m unhappy at the terms imposed on us.

John Clarke, Velospeed
We sold more five years ago as it was then at a £1k limit, with a lower commission rate. Our financial hit seemed more acceptable then. We try not to sell on the CycleScheme now, but we’re okay with the Green Commute Initiative and its lower rate.

Anonymous, London retailer
Five years ago cycle to work barely registered, the big change has come recently with the Government promoting C2W since lockdown and the removal of the limit for higher priced bikes. Third-party providers will claim it is their hard work, but that is nonsense, it’s simply an HMRC salary sacrifice scheme.

Matthew Cleathero, Grounds Cycle Centres
It’s very early days for us offering the scheme, so quite hard to measure, but people are clearly very often quite well-informed about them and will ask early on if we offer it. So, I guess awareness of the benefits are improving.