The cycle to work scheme is a uk government tax exemption initiative. The simple scheme is whereby an employer can provide their staff with a bike (tax-free) at approximately half the retail price at no cost to the company.
The benefits
- The employee obtains the bike of their choice (tax-free & vat free) electric or standard by saving on the PAYE and NI contributions.
- Fitter, healthier staff and motivated workforce.
- Reduced parking and congestion.
- Drop in air pollution.
- Environmental benefits.
- Save money.
How it works? Your boss has to get the company you work for to set up the cycle to work scheme. Then your employer buys the bike’s then loans them to their staff over a fixed period. The company HR will then set up a simple salary control system. The staff member then commits to a small monthly reduction in gross salary thereby mitigating the cost to the employer. At the end of the fixed period the title to the bike can be transferred for 5% (plus vat) of its original r.r.p of the bike.
Cycle to work providers Many bike shops across the uk offer bike’s through a number of different cycle to work scheme. A number of consumers-direct and online retailer’s including:
- Halfords have run almost 10,000 cycle to work schemes to employers ranging from 10 to 220,000 staff. It says it supplies all bike brands available in the uk and sells 41% of all bikes sold in the country. Halfords provides training and also provides a six week safety check.
- Evans Cycles have about 700 clients. It stocks about 1600 models across 65 brands. It provides in store maintenance and repair for cycle to work customers. (every customer benefits from a free first service)
- Wheelies direct–cycle solutions have more than 500 cycle to work customers in the public/private sectors. They provide more than 142 cycle brands, they provide 10% discount to the NHS & emergency services.
There is many providers out there, you can either pop to your local bike retailer or look online.
Who can apply?
- Be 16 or over
- Earn at least minimum wage after the salary sacrifice has been taken from your pay.
- Be paid and taxed via (PAYE) system.
FAQS
- Do i have to ride my bike to work everyday? No one is going to check how much you have rode your bike to work. There is no scrutiny over the type of bike you buy, you can choose one that works for you on your days off to.
- What happens to an early leaver? This will be covered in the agreement, if the employee leaves the company before the fixed period they will simply settle the balance due.
- Who is responsible for the bike? It is recommended that the employee be responsible to ensure that the bike is properly insured and maintained.
- Is the bike covered by warranty? Yes
- Is electric bike’s covered by the scheme? Yes
- Can i buy additional equipment for the bike? Yes you can buy safety equipment eg: helmets, lights, reflective clothing/gear and locks.
- How much can i spend? The maximum spend was capped at £1000. As of june 2019 it does not necessarily have a limit.
- Are there any hidden charges? No
