Rachel Reeves set to clamp down on high-end bike purchases in Cycle to Work scheme
Rachel Reeves is set to remove high-end bikes from her Bike to Work scheme over concerns they are being exploited by wealthier commuters, according to reports.
The Chancellor will seek to restrict workers from buying expensive bikes under a government-backed subsidy scheme that allows workers to buy bikes and accessories interest-free through loans from their employers. Finance Times.
Cyclists are then paid back through their wages before income tax and national insurance are taken into account.
Sounds like what sources say Finance Times Ms Reeves is concerned that “high earners in Surrey Hills” are using the scheme to make significant savings on expensive frames rather than the tax break that benefits daily commuters.
“This should be about helping ordinary commuters switch to greener travel, rather than giving tax breaks to high-income earners who buy £4,000 e-bikes for weekend rides in the Surrey Hills,” a government official said. Financial Times.
Ms Reeves is currently looking at ways to repair the nearly £30bn deficit in the UK’s public finances ahead of the 26 November Budget.
Any changes to the Labor Cycle plan could reportedly come as part of a wider crackdown on government subsidy programmes; The Treasury is also said to be trying to limit how much employees can transfer into their pensions without being taxed from employer and employee national insurance.
Introduced in 1999, Cycle to Work initially had a limit of £1,000; however this was removed in 2019 following complaints that certain bikes were excluded. The subsidy cost the government £130 million in 2024-25.
Will Pearson, co-owner of London-based Pearson Cycles, said: Finance Times He said the new cap on the scheme should be “reasonable” but warned it could undermine progress made on environmentally friendly commuting.
“The government should leave the program alone or ideally improve incentives rather than restrict them,” he said. “Customers are much more likely to use bikes consistently if they are of a certain quality, reliable and efficient. This often comes with a higher price tag.”
A Treasury spokesman said: “We do not comment on speculation regarding tax changes other than financial events.”
