Would redeeming the Cycle To Work scheme benefit while in a nearly fully remote job be a professional faux pas?

Question

My company offers a Cycle to Work scheme as one of the benefits. The scheme is essentially a tax saving tool which let's you buy a bicycle from your pre-tax salary. Technically the government-sanctioned scheme operators claim that at least 50% of the journeys with said bicycle have to be commuting for it to qualify. However, I don't think I've ever heard of this being policed or audited in any way. My impression is that most people and employers really don't take this requirement seriously and play a wink-wink-nudge-nudge game of just taking advantage of tax savings, and fingers crossed promises that yes, there'll be commuting involved with this bike.

Now, I live hundreds of miles away from my employers office and my in-person visits there a limited to taking the train down there once every couple months. I was hoping to buy a folding bike, which could be used for getting to and from train stations and then stowed on the train, but I don't think I could reasonably expect anyone to believe that I'll be ever truly commuting to work by cycling there.

A situation where de facto and de jure rules are different is not an uncommon one. Here, de jure you have to satisfy the 50% commute requirement but de facto it does not seem to be necessary. I suppose my question boils down to where on the spectrum between the two it lays and how much of a faux pas is it to make the difference between them obvious.

Answer 1

While it's probably pretty unlikely to actually get caught for it doing this and failing to meet the "50% of the bikes use must be for commuting" requirement is, nevertheless tax fraud. For yourself, and if the employer is aware of what you're doing for them too.

So what you're actually saying to your employer when you do this is:

Hey! Want to do a bit of defrauding HMRC with me?

Now, who's to say how your employer would see such a request? I suspect that the most likely outcome is that an employer with any degree of self-preservation would have the employee sign some sort of Terms and Conditions as part of the hire agreement stating that the they understand the need for 50% of the bike's use to be qualifying in order to drop the whole responsibility on the employee in the unlikely event of anything coming to light. Other than that they probably wouldn't give it much thought. They might think "We hate HMRC as much as the next man, it's practically a victimless crime!", but then again they might just think "Hmm.. Sanuuu likes to play a bit fast and loose with the law, are they quite the upstanding member of the public we thought? If they're prepared to swindle HMRC when they think they can get away with it - would they do the same to us? Are they already doing the same to us?"

So there's a risk there too - and I'm not convinced that the relatively modest savings achievable using the scheme are worth it.

Answer 2

I don't think I've ever heard of this being policed or audited in any way. My impression is that most people and employers really don't take this requirement seriously

You're probably right on this. However, let's just say that HMRC does decide to audit your employer's tax records, either as a random audit or because they've been up to something else which attracts HMRC's attention... now both you personally and your employer are potentially going to get charged with tax evasion.

Up to you whether the savings you'll make from the scheme are worth the risk.

Answer 3

The question is - would it be a faux pas to request this benefit to be redeemed when my personal situation makes it so blatantly obvious that I'm not going to be using it according to the rules?

Beauty is in the eye of the beholder, but in my opinion: YES this is a faux pas. There is no way for you to reasonably justify a commuter bike and so you are trying to exploit the system. Regardless whether it's likely or not to get caught, it's still cheating. You know it and your employer will know it too. Whether they will take offense or not, is hard to predict, but why risk it ?

WHY you want to do this? Do you want a bike for free? A folding bike isn't much fun to ride for most "normal" purposes. I assume your employer pays your travel expense when you visit the office which presumably includes transportation from the train station to the office, so you don't even save any money.

There seems little benefit to be gained and there is a non-trivial risk is that you come across as someone who plays lose and fast with the rules.

Answer 4

Plenty of answers here telling you not to do this. Strictly speaking of course they are correct - you should comply with the letter of the rules.

But it's not even remotely uncommon to use the scheme to buy a bike that does not do anything close to 50% commuting. Go to any UK based cycling forum and it's full of people doing this. Look at the bikes offered by retailers participating in the scheme and only a small minority are "commuter bikes" - no responsible bike shop would sell a full suspension downhill bike to commute on, yet they aren't excluded from the scheme, for example, and you can have multiple bikes if you want. The wording is woolly because neither your employer nor HMRC really want to know what you do with the bike - your employer wants to offer a perk that costs them very little (maybe even saves them cash because they avoid NICs on the salary sacrifice) and the UK govt wants to subsidise cycling for the health benefits but has to show some conditionality to keep loonies from kicking off about socialism or some such nonsense.

In that sense, I don't believe it's a faux pas.

Answer 5

How do you get from your home to the train station and then from the station to the office? Why not cycle to the station and either lock it up there or take it on the train and cycle from the station to the office. Taking a bike on the train is fairly common so if ever there was an audit and in the unlikely event that they wanted to purse it you could still argue that it has been used for commuting. They have no way of knowing how many times you have used it for leisure and that you have not used it for 50% commuting and 50% for leisure.

Having used the cycle scheme before personally, it is something that is more of a benefit/perk from from employment like health insurance.

Will your employer have an issue? Given that the savings come from a reduction in tax, it doesn't cost them anything so the only burden they have to bear is filling. I'm not 100% sure, but by reducing your payable salary, the employer may be liable for less NI and employer tax so you may be doing them a favour too.

Note. This answer is UK specific.

Answer 6

When signing up for programs like this you need to make sure that doing so doesn't impact you in other ways.

In the United States the government has a program where employees can use either pre-tax funds or funds from the employer to cover the cost of commuting. When they first implemented the programs there was no way to put the funds automatically onto the subway card, they just had to assume that the employee was doing that. The unintended consequences was that once you signed up, the company blocked your ability to use the parking garage. The idea was that you were either a subway commuter or a driver. Other people signed up a group of people for a fake carpool, so they could get closer parking. Eventually the system blocked people who wee supposed to be on the subway, or who had signed up for multiple carpools.

In your case the fact you are remote means that you were never going to be in a carpool, or park in the company garage. You also shouldn't assume that they don't have a requirement for you to prove that you are biking to work.