BA welcomes cycle lobby win in EU VAT reforms for bikes, e-bikes – UK next?

December 10, 2021

The Bicycle Association warmly welcomes the news that EU industry bodies CONEBI and CIE, plus consumer organisation ECF, have seen persistent lobbying efforts rewarded by the inclusion of both bikes and e-bikes among the goods which EU member states can designate as zero-rated or reduced-rated for VAT:

This move could see some EU countries zero-rate bicycles, e-bikes and cycle repair as early as March 2022.

Since the UK has now left the EU, this legislative move will not have any direct effect on the UK’s VAT arrangements, but it will bolster the arguments which the BA has been making for some years that cycles, as green goods and essential transport, should not be subject to full rates of VAT.

There is an especially strong case for children’s bikes, e-bikes and cycle servicing:

Children’s bikes, like children’s shoes, are essential items for healthy transport and affordable access to cycles is essential for children to develop the transport habits and skills they’ll need in a decarbonised future.
E-bikes have huge potential to address barriers to cycling and to boost mass take-up, again essential for decarbonisation of transport. Yet the cost of a good e-bike is still a barrier to many potential purchasers.
Cycle servicing underpins the growth of cycling as a mode of transport, and it’s also how (especially in current supply-constrained circumstances) the vast fleet of cycles in the UK can be brought into and kept in service as cycle use grows rapidly (as it must to meet decarbonisation goals).

This EU move will add to the pressure on the UK Government to act on VAT. As the BA has been warning since CONEBI first flagged this issue in 2019, the UK risks falling behind our European neighbours in this significant measure to encourage active, low-carbon transport.

As other sectors have also found, convincing the UK Government of the case for VAT reductions is never easy. But the BA will continue to press this case, bolstered by the success of our European colleagues at CONEBI, CIE and ECF.