HMRC is removing the tax exemption for free breakfasts provided as a reward to employees who have cycled to work.
The change to the Income Tax (Exemption of Minor Benefits) Regulations 2002, which will become active on 6 April 2013, follows a statement from HMRC in December suggesting the incentive was under used.
"The take up of this relief is very low," it said.
"The value of the relief is minimal and generally outweighed by the time, effort and cost of providing the benefit - for example, the employer would need to publicise the Cycle to Work day and arrange for the breakfast either at a work canteen or to be bought from outside. The relief is no longer necessary and is being repealed."
Employers who offer the service and wish to continue doing so after this date will face a "small administrative burden" of recording employees who received the benefit and reporting the information to HMRC, the document said.
However, it added that as the benefit is likely to fall within the definition of a minor and irregular benefit, it might also be possible to include it on a PAYE Settlement Agreement.
While cycle to work scheme provider Cycle Solutions agreed the effect would probably be negligible, it criticised the coalition's approach to the growing take-up of cycling to work.
Director Steve Edgell said: "At a time when drivers are being stung by high fuel costs, the coalition government seems to have missed an opportunity to promote cycling as a great alternative for the daily commute.
"However, in reality very few employers, or workers, were aware of the tax break on free breakfasts for cyclists. So the effects of the change will probably be minimal.
"The success of Bradley Wiggins in the Tour de France, coupled with the flood of medals won by Team GB at the Olympics has generated an unprecedented surge of interest in cycling - we have seen a 120% growth in the number of people taking up the cycle to work scheme in the past two months.
"The government should be looking to capitalise on the renewed enthusiasm for cycling by encouraging employers and employees to get on their bikes," he added.
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