Time to remove VAT from Bikes

Back in the days when politicians wanted our votes they were pictured promoting bikes, talking bikes, riding bikes. Now I doubt they can remember where they last left their bike, if they ever truly owned one.

 

I'm interested how many of Pedelec Forum users would support a campaign to remove the VAT from bikes - all bikes, not just electric.

 

Some of us choose to make journeys by bike for environmental reasons, some for health, some out of prudent financial necessity. For all these reasons I don't see how purchasing a bike has granted its new owner value at any cost to society.

 

I see instead a clear benefit to government coffers in terms of better health, less pollution, less traffic stress (public and private) and a more mobile society, as people buy bikes.

 

Cyclists set a great example and in the same way zero emission vehicles are rewarded by zero road tax, electric cars come supplied with massive grants, public school fees are vat exempt, so should bicycles.

 

I'm keen to take this further, but first want to gauge support, and to hear a contra argument. Why is VAT appropriate?

 

So, above is a poll and below, room for comment...

Edited November 9, 201114 yr by JuicyBike

Great idea...The italians have or had a discount incentive for E bikes, from memory I think it was 20% or 30%. Mind you, interest rates there have just hit 8%

 

My kids (both at Uni) had some italian friends staying over the other week. In Italy students pay 100 euro per term...none of your £9000 rubbish:mad:

Great idea...The italians have or had a discount incentive for E bikes, from memory I think it was 20% or 30%. Mind you, interest rates there have just hit 8%

 

My kids (both at Uni) had some italian friends staying over the other week. In Italy students pay 100 euro per term...none of your £9000 rubbish:mad:

 

At some EU countries the education at the uni is still free. Anyway 100 euro is almost free but look at the situation of Italy Eddie, they most likely to follow Greece.

 

£9000 is obviously well too much, I'm glad I still ended up paying only £1800/per term

 

All the best

 

Andrew

and yes I agree VAT could be removed on bikes, it would certainly make them more affordable

Absolutely bang on. We should be lobbying our MP's hard to make this happen. It makes total sense really they have everything to gain from the growth of the industry and the loss of VAT would be relative small in the great scheme of things?

 

It's ridiculous that for anyone importing bikes, the tax is equivalent to like 30% of the bike cost in many cases with duty and VAT charged on shipping too. If they want bikes made in the UK and factories here, there need to be VAT dropped and more incentives, financial assistance etc.

Edited November 9, 201114 yr by morphix

Under EU rules, VAT cannot be removed from any articles that have already been liable. That's why our electricity bills have 5% VAT. They were once liable at a higher rate but the government which wanted to remove it found that they were only permitted to reduce it to 5%.

 

So that's the option, the present full rate or reduction to a minimum of 5%.

No - the majority of bikes are, and will continue to be, used for recreational purposes - even if commuting increased 10 fold.

 

Tax evasions, including VAT avoidance, is one of the great banes currently facing our society. If we all want to benefit from a stable society (yes, I'm an outright socialist) then we need to pay our fair share - not look to exempt certain special interest groups from the burden. VAT is intended to even out the profiting at various levels of the process, ensuring that each organisation/person that adds value to a product, and thus profits from onward selling of said products, pays their share of societies tax burden. VAT redistributes wealth making society more equal and allows the provisioning of services - like the construction of cycle lanes - that would otherwise be unaffrodable. Remember - VAT is only payable when an items value is increased - i.e. processing wood into furniture, oil into petrol, metal pipes into bikes etc and is payable by the next person that profits from this transformation (i.e. bike shop on selling the bike) - this is why VAT is not payable on 2nd hand goods sales - i.e. used cars - because no value is added in this transaction.

 

A better way to encourage bicycle use is to increase dedicated cycle routes and secure storage facilities at major transit hubs (supermarkets, workplaces, train stations etc).

Edited November 9, 201114 yr by amigafan2003

Agreed, they can use some of the VAT raised to improve cycle routes just like they do for all the motorists out there by recycling some of the fuel duty! NOT

Under EU rules... So that's the option, the present full rate or reduction to a minimum of 5%.

Rules are made to be... changed, and the poll question is an abstract "is it fair" not "is it legal".

 

If the rule book were blank then how would you decide the value of bike ownership? Is owning a bike more a necessity or a luxury? I did see a poll on the government e-poll website that asked for VAT to be added to chocolate. At first I thought that's crazy, of course it should. But then, surely everyone is entitled to a little chocolate?

Questioning whether there should be a tax on bikes is more like asking "how does our society regard rights to basic mobility?" or "how seriously does it take environmental concerns?" It's not so black and white as an EU directive or a percentage figure. It's much more about the reasons you personally have for making your transport choice and whether VAT is relevant to that choice.

I just drew attention to the facts, and you were exploring the removal of VAT, not only it's fairness. That government found the rule impossible to change for national electricity bills, so the possibility of changing it for bikes is surely virtually non-existent.

 

Personally I'm in favour of the widest possible application of VAT.

I've just returned from China where the attitude to transport is very different to here. Cars are seen as a luxury. Here we hardly consider helping people with transport costs until they're receiving pensions.

 

But we don't put VAT on food or children's clothes. Perhaps the jet lag has made me rather more philosophical than usual but I have to ask why, as bikes are turned to more and more through necessity rather than for weekend leisure, we shouldn't reconsider the fairness of VAT on bikes.

Until such time as we leave the EU then (which looks increasingly likely) we should be looking to reduce VAT to 5% on ebikes and earmark that revenue to go straight back into supporting the ebike industry, in the form of grants, and infrastructure investment. If the government really is serious about investing in British industries and creating a green economy, its time to put their money where their mouth is.

Hi Interesting green energy products like solar heating and heat pumps are only 5% VAT so E bikes should be in that category

 

 

Frank

> No - the majority of bikes are, and will continue to be, used for

> recreational purposes - even if commuting increased 10 fold.

 

 

No one asked a couple of years back whether that new car bought under "scrapage" was to be used for commuting or pleasure. What a huge waste of money that was.

 

Getting people on two wheels is a win-win however you use it. For commuting you cut down on carbon emissions for recreation you get healthier and reduce the load on the health service. BUT, if we've signed away the right to reduce (or remove) VAT then that was a good idea still born.

 

- Brian.

 

Kudos Tourer (and loving it!)

I certainly think a drop to 5% would encourage uptake. A tiny loss to the government but a big saving to an individual. When you think that there is a subsidy of £5,000 on each electric car a drop in VAT on e-bikes would be very logical.

 

Too imaginative and frightening for any British government, I fear, so I won't be holding my breath

>

 

 

No one asked a couple of years back whether that new car bought under "scrapage" was to be used for commuting or pleasure. What a huge waste of money that was.

 

 

Disagree with that, at least it was an attempt to inject capitol into the working environment, not white elephants. It got rid of 'old bangers' helped car franchises, service workers, transport, etc.

 

VAT on bikes is only a concern to the likes of people on this forum (inc me), people who pay a lot for a bike, you can get a bike for under 100 quid at any number of places, not such a big problem then.

Put 20% vat on everything,then put all taxes-income tax,capital gains tax,inheritance tax etc etc down to 20% then we will develop a risk/reward entrepreneurship culture which has been completely destroyed by Labour. Scrap National Insurance which is a tax on jobs.

If you earn the money,you have the right to decide whether you want to spend it and pay the vat or save it-put the choice back into the workings guys hands rather than the state. The benefit's parasites will be hit hard because the benefits v working pendulum will swing towards working. If only David Cameron had won the election outright !!!

Dave

KudosCycles

I believe that if VAT was reduced or on ebikes or scrapped altogether, the manufacturers and retailers would steal the tax break from us. Just like the banks steal the tax break on ISA accounts and oil companies / petrol station owners stole the tax break on fuel in the last budget.

 

Greed is in the DNA of society and any such initiative as reducing VAT will prove to be an irresistible temptation to increase profit margins.

I believe that if VAT was reduced or on ebikes or scrapped altogether, the manufacturers and retailers would steal the tax break from us. Just like the banks steal the tax break on ISA accounts and oil companies / petrol station owners stole the tax break on fuel in the last budget.

 

Greed is in the DNA of society and any such initiative as reducing VAT will prove to be an irresistible temptation to increase profit margins.

Admire your anti-greed stance but have to disagree that greed is universal. I believe humans demonstrate their best when given the opportunity to look out for the weak and the chance to divide up a pie fairly.

Tillson>Not so,the capitalist society would balance out, I suspect we would all be competing at 20% less...but it won't happen-our government is trying to overcome the Labour years-VAT is a very efficient means of governments collecting taxes-we businesses are effectively unpaid tax collectors.

Dave

KudosCycles

Disagree with that, at least it was an attempt to inject capitol into the working environment, not white elephants. It got rid of 'old bangers' helped car franchises, service workers, transport, etc.

 

 

My rebuttal to that argument Biged, is that a great deal of that injected capital went right out of the country given that most new cars part exchanged for bangers were made elsewhere (and consequently, into their economy). On the environmental side, yes I agree that some old bangers were removed from the road but at the environmental cost (and balance of trade costs) of manufacturing cars that didn't otherwise need to be made. The big winners out of this tax payer subsidised bonanza were small car manufacturers like Hyundai and a lot of overseas car producers.

 

There were many years of useful life left in some of those older cars and the environmental impact of making them had already happened. The only environmental impact left was the running of them and not all of them covered high mileage.

 

Like the temporary drop of 2.5% VAT (which didn't make me run out and splurge on a big plasma TV), it was a dopey idea by the last lot in power - only to be equalled by some of the ideas of the current dopey lot.

 

I fear that in my dotage I am becoming Victor Meldrew.

 

- Brian

Edited November 9, 201114 yr by BrianSmithers

I fear that in my dotage I am becoming Victor Meldrew.

 

- Brian

 

Do not fear Brian; many of us, having achieved a certain age, resemble V Meldrew, increasingly so for me as I get older! It doesn't make us bad people though. Indeed, many of the younger generations find us quite amusing......ok, maybe it's just me they laugh at!

 

Never forget though; you don't stop laughing because you grow old; you grow old because you stop laughing!

 

Indalo

 

VAT on bikes is only a concern to the likes of people on this forum (inc me), people who pay a lot for a bike, you can get a bike for under 100 quid at any number of places, not such a big problem then.

 

Indeed, the only people who might otherwise be put off by VAT are those who buy bikes at such low cost that VAT isn't significant enough to influence the purchase decision.

 

As for getting the EU to change the rules on VAT levels, they will merely point to the huge popularity of bikes in such places as the Netherlands, Germany and Denmark where VAT doesn't stop them buying.

I think that liability to pay a tax should be directly linked to the ability to pay a tax. So, to an old Marxist like me: VAT = Bad Tax, Income Tax + Good Tax.

But what do I know?

Happy ebiking!

Tom.

The car scrappage scheme would only have made sense on environmental grounds if the new car bought under it had to be in the minimum emission class.

 

This was not done as it would have adversly affected imports ~ the main uk producers (landrover et al) tend to only produce large, relatively high emission vehicles.