Removing VAT from bikes petition

Discussion in 'Advocacy and Cycling Safety' started by Mister Paul, 30 Aug 2007.

  1. Mister Paul

    Mister Paul Legendary Member

    The petition-

    "For reasons of health and in order to reduce carbon emissions from transport, the Government should take a bold and tangible step to support the view that cycling is good for those who do it and good for everyone else as well. Cyclists should be rewarded for their contribution to reducing carbon emissions by not having to pay VAT for their bicycles, tricycles and human powered vehicles, nor for the spares and parts required to keep them running."

    The response-

    VAT is a broad-based tax on consumer expenditure generally and reliefs from it have always been strictly limited. When the UK joined the European Community in 1973, it meant signing up to the general agreements which covered the application of VAT throughout the EC. Under these and subsequent agreements, signed by successive governments, we are allowed to keep our existing VAT zero rates but not to introduce new ones. This means that we cannot remove VAT from bicycles and other human powered vehicles or their parts and spares.

    The Government is taking practical steps to increase levels of cycling, as a means of contributing to many of our key priorities including improving the health of the nation, improving the environment and helping to reduce urban congestion. In 2005, the Department for Transport launched Cycling England, an independent expert body to co-ordinate cycling across the country with a budget of £5m a year for a three-year period to allocate to cycling programmes. This was increased to £10m a year in June 2006 with the additional funding being targeted on funding safe links to school and additional cycle training in schools. Cycling England has a free expert advisory service to support local authorities to help them get the best value out of their expenditure (around £60m in 2006/07) on cycling. £17m (with match funding) is also being invested in six Cycling Demonstration Towns over 3 years, to showcase best practice, and test whether by investing at levels seen in successful European cycling cities we can start to see similar levels of cycling in England.

    Further Information
  2. Cab

    Cab New Member

    The whole 'we can't drop VAT' thing is a cop out. Take it to the other EU leaders next time you have a jolly/summit or whatever you call it, tell them that its a great new environmental initiative, and you'll be away. It'll work. They'll accept it.

    They're not dropping VAT in bikes for the same reason as they're spending trivial amounts of public money on bikes (relative to expenditure on infrastructure designed and maintained for cars). They don't take cycling serilously. And they don't take cycling seriously because they're cretins.
  3. OP
    Mister Paul

    Mister Paul Legendary Member

    Does anyone know whether bikes are VAT exempt anywhere else?
  4. barq

    barq Senior Member

    Birmingham, UK
    I honestly think any government who wishes to be taken seriously on environmental issues (never mind the transport and health issues) should set up a body which can fast track ideas like this and brush aside needless red tape.

    Like Cab sensibly points out they could talk to other European leaders. Frankly it sounds like just the sort of project the EU would be right up for.
  5. orbiter

    orbiter Well-Known Member

    Nice idea but... as the average cost of a bike in the UK is only £150 (so I hear), VAT is unlikely to make a great difference to whether Joe public buys a bike. Removing VAT would be great for people round here who buy bikes for considerably more than that - but we're not the people who need an incentive to cycle.

  6. jonesy

    jonesy Legendary Member

    I agree. This would not be a well-targeted or cost-effective intervention. As with any price subsidy the greatest beneficiaries would be those who spend the most. If our objective is to get more people cycling then we need to look at the things that are putting them off in the first place. Is there any evidence that the price of new bikes is a major barrier to taking up cycling? As there are vast numbers of unused bikes rusting quietly in sheds then I think I'd look elsewhere for the problem.

    A good place to start is to look at those places where there is lots of cycling, or where cycling has increased, and find out what are the factors that make cycling popular in those areas. And those factors boil down to cycling being advantageous over other forms of transport because of congestion and limited parking availability, in combination with a culture that accepts cycling as a normal mode of transport. Spending lots of taxpayers' money cutting VAT isn't suddenly going to get lots more people cycling, any more than spending lots of money on gravelly paths in the middle of nowhere is going to... :blush:
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