The European Union has voted to change tax rates applied to electric bikes - potentially adding pressure on the UK to follow suit.
The agreement among EU nations earlier this month was reached after member states lobbied to cut taxes on areas that could advance the digital economy and stimulate key priorities, including environmental and health agendas.
As such, rate cuts were agreed on the supply, rental and repair of all bikes, with a further reduction on VAT rates on electric bikes. The decision was justified by the dual environmental benefits of reducing pollution and congestion as well as the promotion of active health among users.
Previously electric bikes were categorised alongside other transport forms powered by fuel, oil and gas and therefore subject to a minimum 15% VAT rate.
Jill Warren, CEO of the European Cyclists’ Federation said: “We very much welcome the result of the Council negotiations on the revision of EU VAT rates, which will make bicycles and e-bikes even more affordable and accessible for consumers in the EU.”
Lobbying to reduce tax rates in the UK is ongoing, with market research suggesting that 55% of bicycle retailers believe a reduction would boost cycling in the country.
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