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The removal of VAT from all cycle helmets (child cycle helmets were already zero rated) was trumpeted as a measure to encourage cycling yet Ministers will not be urging the EC to make cycles a zero rating option, a move that could make a greater difference to potential cyclists and the cycle industry, believes CTC.
CTC Campaigns Manager Stuart Reid said: The removal of VAT from helmets may be positive in itself but a far better way of encouraging cycling would be to drop the tax from bikes.
The government wants the revenue VAT on bikes brings in and has admitted it will not press for cycle sales to be zero rated.
In a letter to CTC, Dawn Primarolo MP, Paymaster General at the Treasury, said tax reliefs had to be restricted to help fund public expenditure.
She added: Bicycles do not appear on the [ECs] list of goods and services to which a reduced rate may be applied.
For that to change the European Commission would have to make a proposal and it would have to be agreed by all Member States. The United Kingdom would not support such a proposal.
CTC will now contact the EC directly to call for a change in tax relief rules.
Stuart Reid said: Cycle use in the UK is already well below that of other European countries. This measure is one thing that could help us catch up.
Patrick Barker, president elect of the Bicycle Association, said: The
government has made many encouraging statements in favour of increasing cycle usage, presumably because it believes in the economic and social benefits. It is a pity that ministers seem to have rejected this proposal without considering the argument that an increase in cycling usage might well result in a reduction in public expenditure in areas such as health and transport.
