Cycle to Work Alliance calls for low income and self-employed access to scheme

A report compiled by the Cycle to Work Alliance is now serving as the basis for a call to Government to widen access to the salary sacrifice scheme.

The report addresses a long-held criticism that around 2 million low-income and no income citizens are unable to access the benefits, which can actually be greater the more money you earn; 11% of the schemes users actually earn above £67,001 a year. Minimum wage rules currently prevent employers from enrolling workers on low incomes on to salary sacrifice schemes.

Likewise, 4.5 million self-employed workers find themselves unable to take advantage, despite in many cases doing similar work and commutes to those who are able to access the scheme.

The final point on the agenda addresses a historical reluctance for SMEs to participate, with the report stating that many perceive a burden associated with enrolling with a scheme.

As a result a trio of recommendations are made:

  • HMRC are called upon to include the cost of a bike as an allowable expense on self-employed workers’ self-assessment forms.
  • An exemption for the cycle to work scheme should allow employers to enter staff into a salary sacrifice agreement, even if their age sits below the National Minimum Wage.
  • Their is a broader call for working together to better understand the motivating factors that may increase scheme participation by Government, scheme facilitators and the business community.

The topic has recently come up in CyclingIndustry.News’ series of interviews with MPs and Peers, with a general consensus that the time to re-write the scheme may have come in order to better serve those who arguably need its benefits the most.

Labour MP Ruth Cadbury told CI.N: “I would like to make bikes cheaper to acquire in order that a broader section of society has this cheap mobility option. Though we do have the cycle to work scheme and while I do welcome the ceiling lift, it is regrettable that it’s delivered via a salary offset scheme. Many non-PAYE workers cannot participate. For an employer the sign up is a bureaucracy for many. In the present climate many are just trying to pay the wages, so the way this functions needs to be simpler.”

The scheme has very often proved a hot potato for the cycle trade, with 2020 punctuated by a very public to and fro between retailers and scheme providers centred on the commission taken as part of a sale referral. In response to outcry to lower commissions Cyclescheme responded to the formation of a new retail group focused on the issue by marginally reducing its take, but many retailers said the cuts did not go far enough. Having been founded with the ambition to drive custom exclusively through independent bike stores, Cyclescheme, among other providers, has now cast the net far wider to also include direct to consumer labels and large chains.

Adrian Warren, Chair, Cycle to Work Alliance says of the report: “As the UK workforce makes a tentative return to the office, cycling will be an even more attractive means of commuting post-pandemic. The benefits of cycling are far-reaching, not just for employees’ mental and physical health, but also for the environment and UK productivity. By making a few small changes to the scheme’s current rules, the millions more people would be able to access it, encouraging a greater culture of active, carbon-free commuting across the UK.”

Research by the Alliance suggests that without the scheme 6 in ten users would otherwise drive to work.