According to a recent article in the Times, People in the UK spent £1.56 billion on bicycles in 2012. That seems a staggering figure, but it is a figure released by the Office for National Statistics, so I expect it must be fairly reliable.
It is not clear form the Times article whether this is a gross figure or net of VAT, but if we take the most conservative of those two possibilities, that it is a gross figure, then this means that, at a 20% rate for VAT, the government has received £260 million from the sale of bicycles. (If the figure is net, then the VAT received would be £312 million.)
It just seems very ironic to me that it is against this backdrop that the government (DfT and Norman Baker) crows about headlines like: “Government to announce £62m boost for cycling infrastructure”
It’s true that virtually no taxes are hypothecated in the UK (least of all Vehicle Excise Duty), but it still provides a backdrop that reveals how pathetic the UK Government’s funding for cycling related developments really is. They are happy to stand up and claim that they are all in favour of increasing active travel, including cycling, and they are certainly happy to take the money, but when it really comes down to putting their (our) money where their mouth is, it is rather a different story.