Bicycle Tax

[[XAP]Bob]

Thanks for all your responses some of which I found mildly amusing. Having read them all and given them careful consideration I remain of the view that a bicycle tax is worthwhile. I think that many cyclists would welcome this initiative as it is much fairer than present arrangements. My comments on some of the points raised is given below.
(a) The Tax would be difficult to implement and raise little money
I disagree. All bicycle shops and other shops selling bicycles and bicycle components would be liable to 25% VAT on such products. This would be very easy to collect and implement. Tigerkitten, yes, you would have to pay it when you bought a bicycle or components as would tandem riders. This would generate quite a lot of money as expenditure on bicycles and bicycle components is high and increasing rapidly. The extra 5% VAT could be called the CCC (Cyclists' Community Contribution).

That's seriously expensive to administer - especially as many lbs aren't VAT registered (my local certainly isn't)
I would actually vote for dropping all sorts of tax in favour of a more efficient tax system*.

[b](b) Little money is spend on cycling and too much on roads[/b]
Money spend on roads is essential to our economic well-being. Connectivity is essential in a developed economy. Cyclists can and do use most roads.The amount of money being spent on cycling facilities is considerable. I went out cycling yesterday and cycled miles on cycle paths as well as roads. I also used traffic lights with pedestrian and bicycle "green" crossing which do not come cheap. I reckon I had the use of millions of pounds of infrastructure. To describe cycling infrastructure provision is terms of "a lick of paint" is inaccurate and misleading IMHO. Of course, more should and could be done.

Trying to think of any local facilities which are more than a lick of paint and/or a sign (I'm including pavement alterations in this category, even if it's adding cobbles or whatever)...
Nope, no that's a footpath anyway. Nope, no, there's an ASL, no that's just a lick of paint...
There are a few sheffield stands (uncovered) outsite ADSA.

The roads are still the best cycle infrastructure the country has - and I already pay for their maintenance via income tax and NI (which should be paying for future pensions)

(c) Cyclist won't be won over as they are inherently anti-cycling
Perhaps not as much as some cyclists are inherently anti-motoring. I suggest that this is an unhelpful generalisation. Many motorists are also cyclists. Some motorists are inconsiderate, but so are some cyclists.

Huh?
Cyclists are anti-cycling. I don't want any of what you are smoking.

[(d)Cyclists are special as they are saving the planet
This holier than thou attitude isn't particularly attractive. Most cyclists cycle because they enjoy it, it keeps them fit and it's cheap, not because they think they're saving the planet. Most bicycles and components are manufactured abroad and imported. Cyclists eat more food because they need more fuel and I'm sure we don't all eat organic. Many cyclists tour abroad and presumably they don't cycle across the English Channel.

The import of cycle components is a non issue - feel free to tax ship diesel at appropriate rates in order to penalise imports if you must.
No, we are special because we are a Zero Point Emissions vehicle - same as the G-Whiz (only better looking), yes in EVERY case a cyclist is better looking - even Robin Cook on a <ugly bike of choice>.
We are special because are not significantly contributing to the danger present on the highway - we simply can't bring much energy to a collision.
We are special because many cyclists are not taxpayers and should not be paying tax.
We are special because we have chosen an economical form of transport - you don't tax something because it's cheap.

Finally, I never suggested that cyclists should not do their own maintenance. I simply pointed out to a new cyclist that using a local bike shop had certain advantages. It would help to keep more bicycle shops in business, it would increase employment in bicycle shops, produce revenue in the form of taxes and assist economic growth. Someone misinterpreted this as meaning that "they should throw away their tools." I would never suggest such a thing. If someone wanted to get rid of their tools it would be much better to donate them to a cycliing charity.
jonty

LBS maintenance is an excellent resource for many cyclists - other than stopping "word corrected to Halfords" from selling bikes there is no need to encourage people in that direction.


Bob

* Bob's patented "lower cost tax system":
1) Scrap all Council tax / NI / tax credits / tax free allowances / benefits etc.
2) All tax payers & citizens register their NI and an account (PO or Bank)
3) All citizens get a payment each month according to their age - this replaces child credits/benefits and tax free allowances as well as the most basic welfare state benefits.
4) All income below £50k (defined as ~ ?75th? centile of earnings.) is taxed at ?20%?
4a) Higher income is taxed above and beyond this (this can be sliding or having multiple bands, this is a group of people who can understand this and/or pay an accountant to explain it)
5) Disability requirements assessed by GP in the first instance (they're presumably seeing the patient anyway)
5a) Guaranteed employment by the government - in various national infrastructure projects
5b) Parenting to be considered as a national infrastructure project - probably financed via (3) for infants and then part time work (via 5a if needed) for nursery/school age.
6) Capital gains tax on non-primary-residence gains over £<some>k, cf+ 4a

The cost of collecting and enforcing such a personal tax system is massively reduced - meaning that the 20% is probably sufficient.
Advantages include the effective elimination of benefit fraud, and the support of families - anyone staying at home to look after kids still gets the (3) payment (i.e. their tax free allowance)


There are also "personally affecting" but company collected taxes...
VAT - As is. The mechanism for collection is fairly simple (even considering the various schemes and fixed rate mechanisms)
Fuel duty - Increased (VED is scrapped, MOT is combined with third party insurance and carries the "disc" requirement) Again, a fairly simple collection mechanism
Other duties (e.g. alcohol, tobacco...) also have fairly simple collection mechanisms.

[broadway]

I think that many cyclists would welcome this initiative as it is much fairer than present arrangements.

The many cyclists welcoming this seem pretty thin on the ground.

[kwackers]

I think that many cyclists would welcome this initiative as it is much fairer than present arrangements.

The many cyclists welcoming this seem pretty thin on the ground.

Ugh oh...
That means it has a chance of happening, things are grimmer than I'd thought possible...

[Jonty]

Bob - you're proposing the complete re-modelling of the fiscal/benefits system. All I was suggesting was that cyclists make a modest additional contribution to the Exchequer, similar to motorists and motor cyclists but smaller.
I don't understand why most posters are against this suggestion which seems reasonable to me.
By the way only about 10% of people earn over £50k a year and only about 20% earn over £40k per year. Those paying a 40% marginal rate of tax (earning over £43800) contribute about 70% of all direct taxes to the Exchequer.
I take your point about some LBSs not having a large enough turnover to be VAT registered. They would be excluded but the larger shops, including the big internet operations would be captured by the extra 5% VAT surcharge.
The extra 5% would dampen turnover but only temporarily as growth of expenditure on bikes and bicycle stuff is increasing rapidly. Perhaps less than a year's growth would be lost.
Consumers would of course have to pay more but that's what a tax is all about. You can't make an extra contribution without paying for it.
jonty

[kwackers]

Don't forget joggers!

An extra 5% on running shoes would soon dig this country out of a hole.

Actually thinking about it, why not tax all shoes? They use pavements and roads don't they?
In fact, why muck about? Why not simply hike up VAT for everything - I mean most of it contributes to extra wear on the roads, even if only because that's how it gets in and out of the shops.

(Scratch that, I've just realised it's already been done.)

[kwackers]

Actually I've just done some back of the envelope maths, Jonty could be on to something.
With a 5% hike in VAT on bicycles and goodies it would only take around 8,000 years for us cyclists to dig the country out of its current hole.

Just 8,000 years ladeez and gents. It does require that nobody rein in their bicycle spending though. Perhaps the LBS could also have a charity box that the better off cyclists could chuck a few bob in too?

[Jonty]

kwackers - some excellent suggestions IMHO. You are really thinking outside the box. The last thing we cyclists want or need is "Group-Think".
As cyclists are disproportionately intelligent and successful (as well as holy) I am sure most, if not all, would be in a position to make a further voluntary contribution over and above the proposed modest VAT surcharge.
Of course the surcharge would not apply to me as I'm a pensioner. That's only fair, after all. But you might persuade me to make a modest voluntary contribution along the lines you have suggested instead.
On reflection as I already support the national economy and the public accounts by having my servicing done by my LHS rather than doing it myself, I'll give your suggestion a miss but please don't let that stop you.
jonty

[MartinC]

I think that many cyclists would welcome this initiative

Why do you think that?

All bicycle shops and other shops selling bicycles and bicycle components would be liable to 25% VAT on such products.

So I'll just buy all not some of my bike purchases in the rest of the EU. Bad news for my LBS and the revenue.

[Flinders]

Vat simple to collect ??? (falls about in hysterics).

Wrong.
the old 'purchase tax' was far simpler, as it was only imposed at one end of the process. It cost a fraction to collect compared to VAT and saved businesses a fortune in unnecessary book-keeping. Many businesses didn't have to be involved with it at all- imagine that- if you didn't sell direct to the public, you didn't have to do any book-keeping apart from ordinary business tax books, which are far simpler than VAT books. VAT was dreamed up by masochists whose kids were accountants and needed work.
It is about as insane as it gets to collect tax at every stage, with people paying Vat and then claiming most of it back at every stage. As a low-turnover business, I have to pay it on all my raw materials and any services I have to use, but can't claim it back on my sales. How fair is that?
VAT is part of the reason that at quiet times of year I sometimes pay more than 100% tax on my income. Try that for size, anyone on PAYE who envies the self-employed

If we had purchase tax it would save a lot of businesses millions in accounting bills and the country would lose nothing in taxes.

[[XAP]Bob]

Bob - you're proposing the complete re-modelling of the fiscal/benefits system. All I was suggesting was that cyclists make a modest additional contribution to the Exchequer, similar to motorists and motor cyclists but smaller.
I don't understand why most posters are against this suggestion which seems reasonable to me.
By the way only about 10% of people earn over £50k a year and only about 20% earn over £40k per year. Those paying a 40% marginal rate of tax (earning over £43800) contribute about 70% of all direct taxes to the Exchequer.
I take your point about some LBSs not having a large enough turnover to be VAT registered. They would be excluded but the larger shops, including the big internet operations would be captured by the extra 5% VAT surcharge.
The extra 5% would dampen turnover but only temporarily as growth of expenditure on bikes and bicycle stuff is increasing rapidly. Perhaps less than a year's growth would be lost.
Consumers would of course have to pay more but that's what a tax is all about. You can't make an extra contribution without paying for it.
jonty

Because you're micturating into the wind. (that does say ur inating, not micturating)

Cycling is not something to be discouraged (which is purportedly why motoring is taxed)

Cycling tax is not going to change the might is right culture on our roads, it will in fact reduce the uptake of cycling and cost the government money (in terms of increased health care costs)

Cycling tax is not going to generate any meaningful revenue - interestingly cutting VAT on bikes may encourage uptake and therefore cause a reduction in cost of the NHS which could more than outweigh the lost VAT income...

A complete overhaul of the tax system has the potential to make a large change to the tax income/useful work done, farting about on the edges will only fart about on the edges.

[Cunobelin]

Paragraph 1 is the big FAIL

I think that many cyclists would welcome this initiative as it is much fairer than present arrangements

What is fairer than being assessed on the same criteria as otehr road users?

All vehicles are assessed on their fuel emissions and rated accordingly. Any vehicle whether it be a car, van, bicycle or any other is assessed by the same criteria.

Any reaching Band A efficiency pay no VED irrelevant of the vehicle type.

Absolutely fair, above board and equitable.


Now if we are (as appears to be the case) suggesting an additional tax simply for cyclists then we need to apply the same tax across all road users or vehicle types to be fair.

Would the 5 % "JontyTax" be added to cars, and car accessories as well?

[MartinC]

make a modest additional contribution to the Exchequer, similar to motorists and motor cyclists but smaller

Some mistake here surely? The subsidy to motorists when calculated is between £800 to £3000 p.a. per car (ref Cunobelin). Why can't cyclists have the same subsidy?

If you ever find the problem your proposal is a solution to I'd be be interested to see it.

[snibgo]

Jonty's scheme now seems to be merely extra VAT on bikes and components. The arguments for the scheme seems to be merely that when a motorist shouts at me, on the road or in a forum, "You don't pay road tax", I can shout back "But I pay extra VAT."

The sole benefit, Jonty thinks (correct me if I'm wrong), is that this will give us extra voice. When we want a facility, we will be able to say we have paid for it. If the money was ring-fenced, and was sufficient to pay for the facilities, this benefit might hold. But it won't -- see below.

I think that many cyclists would welcome this initiative as it is much fairer than present arrangements.

"Fairer"? In what sense?

This would generate quite a lot of money as expenditure on bicycles and bicycle components is high and increasing rapidly.

Would it? In a town of 10,000 people (I'm thinking of Cambourne, Cambs), being generous, perhaps 1000 bikes are bought per year, at an average of £500 each. 5% of that is £25,000. This is virtually nothing.

The amount of money being spent on cycling facilities is considerable.

Is it? Some towns (eg Stevenage) have spent some money on cycle-only facilities, but still far less than on roads. Most towns haven't. Cambourne has a couple of crossings (at the junction with the A428 dual-carriageway) with crossings and lights for cyclists, which I never use, and some Sheffield stands, which I do use.

I suspect the crossings, lights and stands cost more than £25,000. If Jonty's scheme was in place, the planners could argue, "No more stands because we've spent all your money."

I don't think that most motorists are inherently anti-cycling. For those that are, taxing cycling won't make any difference.

Cycling (instead of driving) isn't enough to save the planet, but is undoubtedly good for it. I cycle (instead of driving) for the usual three reasons: cost, health and environment. But the reasons are less important than the actions. If everyone cycled only because they enjoyed it and didn't give a fig for the environment, it would still be good for the environment.

Adding a tax to cycling (as tax is added to motoring through VED and fuel) would reduce cycling. It would be a "sin" tax, like that on booze, fags and petrol.

But it's important to see the bigger picture rather than the narrow sectional interest. I can see the benefits of cyclists having the moral standing of being able to say that they contribute that little bit extra, like motorists and motor cyclists.

The bigger picture is that, for society as a whole, the disadvantages far outweigh the trivial moral point.

[[XAP]Bob]

Would the 5 % "JontyTax" be added to cars, and car accessories as well?

And pedestrians, equestrians...
And mobility scooters

And lungs

[Jonty]

I'm coming round to the view that perhaps my idea wasn't such a good idea after all. I think I'll reduce my posting and do more cycling.
jonty