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Cycle To Work Scheme

Cycle to Work Scheme: Promoting Healthier Commutes

The Cycle to Work Scheme is a government initiative in the United Kingdom designed to encourage employees to cycle to work, thereby reducing traffic congestion, improving air quality, and promoting healthier, more sustainable transportation options. This scheme allows employees to acquire a new bicycle and related equipment at a significant discount through a salary sacrifice arrangement. Here's a description of the scheme and the typical process involved:

To take part in the Scheme please use the 'Cycle to Work Scheme' Option at the Check out page.

Description of the Cycle to Work Scheme:

The Cycle to Work Scheme is a tax-efficient employee benefit, primarily facilitated through the cooperation of employers, employees, and participating bike retailers. The scheme aims to make cycling more accessible and affordable, encouraging people to adopt it as a practical and sustainable mode of commuting. Key points to note include:

  1. Eligibility: Most employees in the UK are eligible for the scheme, provided their employer participates. Public sector employees are also eligible. Self-employed individuals and those without an employer are generally not eligible.

  2. Financial Incentives: Through the scheme, employees can save money on the cost of a new bike and accessories (such as helmets, locks, lights, and clothing). These savings are achieved through a salary sacrifice arrangement.

  3. Tax and National Insurance Benefits: By participating in the scheme, employees can reduce their income tax and National Insurance contributions, further enhancing their savings.

  4. Affordability: The scheme allows employees to spread the cost of their chosen bike and equipment over a specified period, typically 12 or 18 months.

Process of the Cycle to Work Scheme:

Participating in the Cycle to Work Scheme typically involves the following steps:

  1. Employer Registration: The first step is for the employer to register with a Cycle to Work Scheme provider. These providers manage the administrative and financial aspects of the scheme. Employers usually choose from a list of providers that best suit their needs.

  2. Employee Enrollment: Employees interested in the scheme should express their intent to their employer. Employers provide eligible employees with the necessary application forms and details.

  3. Choose a Bike and Equipment: Employees visit a participating local bike shop or online retailer to select a bicycle and related accessories within the scheme's cost limit. The employee may need a formal written quote for these items.

  4. Salary Sacrifice Agreement: Once the employee has selected the items, they sign a salary sacrifice agreement with their employer. This agreement specifies the cost of the bike and equipment, the length of the salary sacrifice period, and the reduction in gross salary.

  5. Employer Procurement: The employer then purchases the bike and equipment, either directly from the retailer or through a Cycle to Work Scheme provider.

  6. Transfer of Ownership: At the end of the salary sacrifice period, ownership of the bike and equipment may transfer to the employee. However, this depends on the scheme's terms and the specific arrangement with the employer.

  7. Reaping the Tax and NI Benefits: Employees realize the savings on their income tax and National Insurance contributions throughout the salary sacrifice period.

  8. Using the Bike: The employee can now use the bike for their daily commute, fitness, and recreational purposes.

It's important to note that the Cycle to Work Scheme varies somewhat depending on the scheme provider and employer, so employees should consult their employers for specific details and eligibility requirements. The scheme offers a fantastic way to make cycling more accessible, affordable, and sustainable, contributing to both individual well-being and environmental conservation.

 

Please see link to our Blog on the Cycle to Work Scheme

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