Cycle-to-Work perks could shrink while TfL hire bikes remain a little-known option for commuters

"It used to be £1,000, but the cap was removed in 2019 due to growing complaints that it limited the purchase of expensive e-bikes and cargo bikes. However, as the benefit is linked to salary, higher tax payers benefit more than ordinary workers, which has led to suspicion that higher rate taxpayers are buying very expensive bikes for weekend fun while being able to legitimately claim a very big chunk of the cost tax-free through the cycle to work scheme."

"One slight niggle is that, generally, the employer has to buy the bike upfront and then sign a payment plan with the employee. Although there are benefits to encourage employers to do so, many might not have the financial means for the upfront payments. However, for Londoners, there is an alternative to buying a bike. It's not widely known that London's many street hire bikes - from TfL's Santander bikes to Limes and Forests, can also qualify for the cycle to work scheme."

The cycle to work scheme allows an employee to buy or rent a bike with payments taken from wages before tax, enabling about 30–42% savings. A £1,000 cap on qualifying bike value was removed in 2019 to accommodate pricier e-bikes and cargo bikes. The benefit is linked to salary, so higher-rate taxpayers receive larger tax advantages, prompting concern about expensive leisure bikes being bought tax-free. The government may reintroduce a higher cap to allow commuter e-bikes. Employers generally buy the bike upfront and set a payment plan, which can strain smaller employers. London's street-hire bikes can qualify through providers.

Read at ianVisits