Excessive high-end cycle to work curbs expected in November’s budget

Investigatory work from the Financial Times has uncovered changes ahead for the long-standing cycle to work salary sacrifice scheme – namely axing high-end bike purchases made through C2W.

The long-running scheme assists a sizeable proportion of bike sales in the UK and has been subject to adjustments over the years – notably when the £1,000 bike cost threshold was thrown out to reflect the rising cost of bikes and to accommodate electric bikes.

It’s that change that is now under the spotlight as it also paved the way for “abuse” of the scheme, where “high earners can buy £4,000 eBikes for weekend rides in the Surrey Hills” – as one government insider put it to the FT.

As the Chancellor is looking hard for savings in the under pressure economy, this kind of abuse of tax payer cash is reportedly (and believably) in Rachel Reeves’ crosshairs.

Cycle to work is one salary sacrifice initiative that has endured where others have not. The cycling industry has long seen independent retailers question whether all bikes bought through the scheme are actually being used for commuting, and many within the industry itself have been lobbying for changes – including widening out what type of workers can access the scheme.

But its key role in the UK cycle market for the last quarter century is hard to argue against. According to figures from the Cycle to Work Alliance, C2W helped generate £219m in bicycle and accessory sales in 2023/24, generating £43.8m in VAT whilst supporting a struggling UK cycling sector. The Alliance has also pointed out the broader economic benefits (circa £573m annually to the British economy).

Arguably, ensuring the continuation of C2W has been an easy win for governments of all stripes – it has endured multiple Conservative and Labour (and Coalition) governments – and has been a relatively uncontroversial way to support active and sustainable travel.