c2w - should you have to actually cycle to work?

[Standoff]

If it is agreed that cycling is a 'good thing' health wise, congestion wise etc etc etc, and the C2W scheme is 'abused' by many - and this abuse is tacitally approved by HMG, presumably because of these positive effects, why not abandon the scheme and encourage everyone to benefit by cutting or even removing VAT on bikes?

Because government prefers to take it off you, use a chunk of that money to create more bureaucracy and give you part of it back!

 

[wiggydiggy]

If it is agreed that cycling is a 'good thing' health wise, congestion wise etc etc etc, and the C2W scheme is 'abused' by many - and this abuse is tacitally approved by HMG, presumably because of these positive effects, why not abandon the scheme and encourage everyone to benefit by cutting or even removing VAT on bikes?

I'd go for that, I'd go as far as suggesting that we apply extra tax to things that are bad for you (smoking for example) and then we should apply less tax to things that are good for you.

 

[Leaway2]

I commute 99% of the time. As my company will not join the scheme this is a "benefit" that is not available to me.

 

[youngoldbloke]

I'd go for that, I'd go as far as suggesting that we apply extra tax to things that are bad for you (smoking for example) and then we should apply less tax to things that are good for you.

I thought we did that already? On booze too, and extra duty on fuel. How about a saturated fat tax as well? And maybe a graduated BMI tax for those exceeding the 'safe' levels ?

 

[wiggydiggy]

I thought we did that already? On booze too, and extra duty on fuel. How about a saturated fat tax as well? And maybe a graduated BMI tax for those exceeding the 'safe' levels ?

Kind of, its an Excise Tax and not charged on 'bad' things exclusively. We dont do less tax on 'good' things though?

 

[srw]

Because government prefers to take it off you, use a chunk of that money to create more bureaucracy and give you part of it back!

I'm sure the Democratic Republic of Congo, or Mali, would be delighted to have you.

 

[PK99]

I'm not an expert on C2W, and its intricacies, but anything that gets more bums on saddles is a winner in my book.

you may have a point if it is the first bike some one buys - but the use of the scheme to build up a stable of bikes only one of which is used for commuting is fraud (and yes i do know people who have done that)

 

[PK99]

I apologise. I assumed there was some sort of tax incentive with c2w? Forgive me but if your bike cost £500 and you are paying that amount for it why on earth is government getting involved in this? Just buy the bike yourself!

don't apologise he is conning you - he get tax relief on the £500. you help pay for that

 

[PK99]

I agree. It's a net subsidy from non-cyclists to cyclists. But it's a good thing.

t.

no, it is a net subsidy from all taxpayers, cyclist and non cyclist alike, to a subset of cyclists

 

[PK99]

Why can the self employed not get it?

they can. i'm not sure of the tax mecanics, but it can be done, just not through paye

 

[wiggydiggy]

you may have a point if it is the first bike some one buys - but the use of the scheme to build up a stable of bikes only one of which is used for commuting is fraud (and yes i do know people who have done that)

Well..... That depends on the scheme and how it is implemented whether it is fraudulent. If you make no additional payment at the end of the loan period to take ownership of the bike, yes potentially fraudulant. If however like me I can buy the bike by paying the value of the tax of the 'fair market value', and then get another bike, no its not fraudulent.

 

[400bhp]

Very roughly, the government loses 30% to 50% of the purchase price (depending on marginal tax rates) in foregone income tax and NI. It wins 20% of the purchase price in VAT, and about 20% of 5% (1%) of the purchase price in corporation tax.

So the government is a pretty substantial net loser. And that assumes the bike wouldn't have been bought anyway - most people seem to be using the scheme to buy a bike they would have bought anyway.

Possibly

It has got people into cycling though.

Short term monetary losses, yes the govt loses out, albeit it is immaterial in the grand scheme of things.

Long term, difficult to say, given the net benefits of cycling.

 

[400bhp]

I love the c2w scheme and will continue to use it.

 

[PK99]

Well..... That depends on the scheme and how it is implemented whether it is fraudulent. If you make no additional payment at the end of the loan period to take ownership of the bike, yes potentially fraudulant. If however like me I can buy the bike by paying the value of the tax of the 'fair market value', and then get another bike, no its not fraudulent.

It is a condition of receiving the tax relief that the bike is used for commuting - if the bike is bought with no intention of ever using it for commuting and the tax relief taken, that is fraud/tax evasion

 

[Standoff]

I'm sure the Democratic Republic of Congo, or Mali, would be delighted to have you.

Why do I keep trying to reason with statist socialists! You keep feeding your government my friend. We'll continue the debate when everyone's money runs out. It always does!