Business and cycling groups have urged the government to reform its cycle-to-work scheme so it can be used by the lowest paid workers and the self-employed, arguing that they are often the people who have the most. Not needed anymore.
Introduced over 20 years ago and used by more than a million people since then, the scheme allows users to pay for a bicycle and its accessories in tax-free installments of their salary, saving them between 25 % and 40%.
But long-standing rules mean it’s not available to people earning minimum wage, or close to it, or who don’t pay tax on a pay-as-you-go basis.
In a letter to Chancellor Rishi Sunak on Monday, groups including the Federation of Small Businesses, the Co-op and British Cycling called for this to change, arguing that amid rising prices people low-income people are most in need of the chance to save money on travel.
“The lowest paid in our communities are feeling the effects of soaring inflation to a greater extent than those with higher salaries, with the rising cost of travel only adding to their concern,” the agency said. letter.
“They often don’t have the opportunity to do their work from home and are forced to go to their place of work. The cycle-to-work program has the potential to open up equitable access to cycling and provide a cost-effective solution for many workers in this group. The program is a proven mechanism for getting more people to cycle, and we believe those on the lowest incomes should also benefit.
The self-employed made up more than 13% of the UK labor market, the letter added, a proportion that was expected to rise, and were also unfairly excluded, it added.
Data collected by the Cycle to Work Alliance, made up of the five biggest bike suppliers under the scheme, including Halfords and Evans Cycles, shows it has become more in demand due to changing travel habits during the Covid crisis, especially for key workers.
At the height of the pandemic, from March to September 2020, alliance members saw a 60% increase in the number of people using the program compared to the same period in 2019, with even greater increases for the London Ambulance Service and Metropolitan Police personnel.
Expanding the scope of the program would help deliver on the government’s commitment to get more people cycling, the letter says, and prevent post-Covid travel habits from becoming more car-dominated.
Currently, the scheme does not allow people to enroll if their salary contributions for cycling would bring them below the minimum wage, although switching to cycling trips could still mean a net saving.
The alliance pledged that if the change was made, retailers would ensure candidates had calculated the cost correctly and would be notified if their take-home pay would now be less than the minimum wage.
The change is backed by Labour. Gill Furniss, the Minister for Ghost Roads, said: “There is no path to net zero without green transport and it is essential that Ministers do more to encourage people to cycle to work, to increase access and adoption of this popular program.”
Paul Caudwell, the Co-op Group’s health and wellbeing manager, said it was wrong that lower paid staff had been denied access to the scheme: ‘I think the legislation needs to change to allow a wage sacrifice arrangement to be able to reduce pay below the national minimum wage. This would make the incentives to use a wage sacrifice program fairer for all of our colleagues and increase adoption of our cycle-to-work program.
The Treasury has been contacted for comments.