Cycle to Work safe within 2016 Budget

The UK’s Cycle to Work scheme scheme has remained untouched in the 2016 Budget. 039

Though salary sacrifice schemes have been under scrutiny, a statement in the budget reads:

“Salary sacrifice arrangements enable employees to give up salary in return for benefits-in-kind that are often subject to more favourable tax treatment than salary. The government wants to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes: clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010. The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes. However, the government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”

As predicted in an in depth CyclingIndustry.News interview with Cyclescheme’s Steven Holt last month, employees will continue to benefit from tax breaks of between 25 and 42 percent on bike sales.

In other Budget news, the threshold for small business rate relief will rise from £6,000 to £15,000 and from £18,000 to £51,000 for the higher rate. The result, says the chancellor, is that 600,000 small businesses will pay no business rates from next year as a result.