Cycle to Work schemes ‘sucking the lifeblood’ out of bike shops, says leading retailer

Cycle to Work schemes - which allow people to save tax on bikes via 'loaning' them from their employers - are "sucking the lifeblood" out of bike shops, according to a Sheffield-based retailer.

JE James’ Mark James made the comments after a meeting between the Association of Cycle Traders and the All Party Cycling and Walking Parliamentary Group in Westminster this week.

The parliamentary group heard that the Cycle to Work scheme in its current form is having a severe impact on bike retailers nationwide and needs urgent reform. 

Three members of the Association of Cycle Traders [ACT] met with MP’s in Westminster to outline the industry’s concerns surrounding the scheme and discuss how the benefits to traders could be increased. It follows a war of words between ACT and one of the UK's biggest Cycle to Work organisations, Cyclescheme, over new rules being introduced by the latter.

Last month, Gavin Hudson of Butternut Bikes, London, told Cycling Weekly that Cycle to Work schemes should be more "transparent" about the "outrageous" fees they charge bike shops.

ACT director Jonathan Harrison, Mike Rice of Balfe’s Bikes and James met with Fabian Hamilton MP and Selaine Saxby MP - the co-chairs of the All Party Cycling and Walking Parliamentary Group - after more than 500 UK bike shops signed up to the ACT’s campaign calling for change. 

James expressed his immense frustrations after the meeting and said that the scheme was “sucking the lifeblood” from shops across the country. 

“I hoped I would have been able to deliver a speech about how cycle to work was detrimental to the industry and most businesses within it," he said. "I was shocked by the lack of understanding of what and how the bike to work providers operate the schemes.

“We need every retailer to find their local MP’s surgery and use the information we have compiled to put our case face to face. No cycle retailer should pay for a scheme, full stop. If anything we should be paid for the extra admin involved. 

“I sadly would not want my two kids to follow in my footsteps, because the cycle to work schemes are sucking the life blood out of cycle shops.”

Following the meeting, Harrison said that a majority view is that the scheme is too complicated and confusing in its current form. He added that many are also now priced out of taking part due to being on low wages or self-employed. 

“The scheme no longer fits the purpose for which it was originally intended - to get people to Cycle to Work,” he said. “Since the pandemic working habits have fundamentally changed, with more people working remotely therefore the ‘to work’ requirement is increasingly difficult to meet for many people.”

“We should be exploring ways to make the scheme more inclusive, ensuring that a broader range of people can benefit from encouraging cycling for everyone,” he continued, explaining that the issues around the salary sacrifice element of the scheme also means that ironically those working within the cycling industry itself are often priced out of taking part. 

The director of ACT said that his group were willing to collaborate with the government in order to adjust the scheme for the good of all involved. 

“With a fully joined up industry support plan we believe that we can significantly increase the volume of transactions that go through a new look cycle to work scheme." he said. 

"We would welcome the opportunity to work with the government to address the current issues with the scheme to ensure that it is accessible to many more and provides a workable, sustainable margin for the many hundreds of small independent businesses operating in the sector.” 

The Cycle to Work program gives employees of enrolled companies tax deductions on bikes and equipment, which are paid through salaries, in a bid to get more people commuting by bike. Customers buy vouchers from Cycle to Work scheme providers, before redeeming them at retailers that sign up to the scheme.