BikeBiz Bicycle and cycling retail news
The Bicycle Association (BA) has set out its interim understanding of the potential impact of the new ‘Consumer Duty‘ on the Government’s Cycle to Work (C2W) tax break scheme.
This new Consumer Duty, overseen by the Financial Conduct Authority (FCA), came into force in July this year, and differing interpretations of its potential impact on the operation of the Cycle to Work tax break scheme (separately overseen by the Department for Transport and ultimately HMRC) have raised industry concerns that, in some cases, fulfilling the scheme may become unsustainable for some in the C2W supply chain.
Since the announcement, the BA has been listening and seeking the interpretations of suppliers, retailers and C2W providers on this complex matter, as well as liaising with colleagues at the Association of Cycle Traders (ACT).
A spokesperson for the BA said: “We recognise the strength of feeling on this issue, which comes at a time when many in the industry are already facing very challenging trading conditions.”
From July 31, 2023, a new Consumer Duty came into force in the UK, intended to set higher and clearer standards of consumer protection across financial services.
Overseen by the FCA it is far-reaching, applying across the supply chain wherever a UK business has a role in delivering “good outcomes for retail customers” in relation to regulated consumer finance. FCA resources for companies who may be affected can be found on the FCA website.
In the cycle sector it will apply across a range of retail finance products including credit facilities, stage payments, hire purchase, and hire and lease services over three months.
A spokesperson for the BA explained its position by saying: “We are aware that across the industry there are different interpretations of the impact of Consumer Duty. Questions have arisen, for example, about whether the Duty may imply a requirement restricting retailers from determining which of their products they offer to the scheme (for example on-sale products), and whether, under the Duty, it is permissible for retailers to add a build or admin fee.
“We believe that regulation of the C2W scheme should be fair, proportionate, clear, unambiguous and transparent.”
With regard to Consumer Duty and its implications, the BA describes it as “a complex issue” and the regulatory aspects are “difficult to disentangle” from the commercial arrangements between providers and their supply chains.
The BA cannot, as a trade association, interfere with commercial or contractual arrangements between companies.
However, as the trade body, it aims to offer guidance to the industry on regulatory matters.
In this case, after consultation and with the complexities becoming clear, the BA believes it is evident that official guidance from the regulator, the FCA, is required to clarify the issues satisfactorily.
The BA has also approached officials at the Department for Transport to seek further clarification.
