The UK Cycle to Work scheme’s largest facilitator has raised commission charges on Parts and Accessory sales to 12.5% (15% with VAT).
Previously 8.33% plus VAT, the 50% rise has been met with dismay from many dealers, who will now be required to read and sign a new agreement by July 10th.
A retailer who did not wish to be named told CyclingIndustry.News this morning: “I can’t see what we’re getting in return for this cost increase to our bottom line, this doesn’t seem to be the way to go to keep dealers onside.”
Another said: “It’s astonishing, no explanation, no “oh sorry, but business is tough”, just bang the rates up.
“We have a number of developments underway that will add value and increase your sales and we will tell you more about these as we go through the year,” said the email to retailers.
When asked for detail, Commercial Director Stephen Holt said: “We are always looking at ways to improve Cyclescheme – our next initiative will be an online learning tool to enable retailers and their employees to better understand everything about our offer to grow sales with their customers.”
The email sent out to the database of around 2,100 stores says that the 12.5% + VAT rate will also apply to helmet sales, which as it stands are not subject to the tax.
On this Holt added: “In terms of helmets I think retailers are getting confused between the fact that they are zero VAT rated, but that we charge commission, plus VAT on any helmet that an employee chooses through their cycle to work scheme.”
Further to the pricing alteration dealers on Cyclescheme’s books have been notified of contractual changes to notice periods, deemed acceptance and VAT changes.
Back in February Commercial Director Stephen Holt spoke exclusively to CyclingIndustry.News on the value added by Cyclescheme to the UK market.