If you’re lucky enough to cycle as part of your work, your employer can pay you a tax-free mileage allowance of up to 20p per mile. Unfortunately, the commuting journeys between your home and permanent workplace don’t qualify. However, one of our nearest neighbours permits commuters to claim an allowance for cycling to and from work every day.
Cyclists in the Netherlands can reduce their tax bill by €0.21 per km (or 29p per mile) of cycle commuting. That’s worth €450 a year to a Dutch cyclist travelling 9km to work.
It’s just one of the ways the Dutch promote and support cycling on top of 35,000 km of dedicated cycle infrastructure and 70 per cent of traffic calmed, 20mph urban streets.
However, it was a growing population and associated increase in car use that prompted Dutch Secretary of State for Infrastructure between 2017 – 2019, Stientje Van Veldhoven, to tweak corporate tax law so companies could effectively pay staff to cycle to work.
Speaking at the time, Van Veldhoven said: “The bicycle makes an important contribution to accessibility, liveability and health. It reduces traffic jams. That’s why I want to stimulate cycling with the goal that there will be 200,000 extra commuters from the car and that we will make 3 billion more bicycle kilometres together.”
25% of Dutch people cycle every day
Could the same work here?
In Britain, four million people drive less than four miles to work by car.
If we adopted the Dutch scheme here in the UK, a person who swapped their four mile car commute for cycling could pay £46.40 less tax each month. Such measures are more than paid for by the savings made on the external costs of motoring such as congestion, health and pollution.
This may come as a surprise to those who believe motorists are the government’s cash cow. While everyone accepts cars are a major household expense, there is limited comprehension of their private (internal) and social (external) cost per km, year, or lifetime of use. So says ‘The lifetime cost of driving a car‘ – research that puts the total at £500,000; an eye watering sum of which society shoulders 41 per cent.
The internal costs are particularly burdensome to low-income motorists who must invest a large share of their net income to own and operate a private vehicle. Furthermore, poorer neighbourhoods are more likely to be plagued by motor traffic air pollution and road danger. Just another reason why investment in cycling is so worthwhile.
The ethical choice
The ETA was established in 1990 as an ethical provider of green, reliable travel services. Over 30 years on, we continue to offer cycle insurance , breakdown cover and mobility scooter insurance while putting concern for the environment at the heart of all we do.
The Good Shopping Guide judges us to be the UK’s most ethical provider.
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