Figures recently released by the
Cycle to Work Alliance
showed that in 2014 record numbers of employees
participated in the scheme, heralding a long-
term cycling boom in the UK.
Employers are increasingly recognising
the importance of a healthier
workforce
and
encouraging
better lifestyle choices among
their staff.
Cycling to work is
clean, healthy and efficient
and
there is documented evidence
that cyclists are physically fitter,
brighter and more productive
than colleagues who arrive at work
by more sedentary means.
In short, participating employers
can buy bikes for employees as a tax
free benefit. The employee must have a
permanent position, pay tax under PAYE, be aged
18 or over and earn more than the national minimum
wage once the repayments on the bike have been
deducted from their gross salary.
The employer can spend up to £1000 on each
employee, which can include the purchase of cycling
safety clothing and accessories. The vast majority of
employers can then reclaim the VAT on the purchase,
before leasing the bike to the employee for a fixed term
(normally 12 months). The monthly repayment on the
lease is then taken from the employee’s pre-tax salary,
resulting in a reduction in income tax and national
insurance contributions paid. It’s also worth pointing
out that the employer will typically save 13.8% of the
total value of sacrifice, due to reductions in Employer’s
National Insurance Contributions.
At the end of the ‘hire’ period the employee has the
option to purchase the bike from the employer with a
final Fair Market Value payment, extend the period of
the loan allowing heavier depreciation to Fair Market
Value, or simply give the bike back to the employer.
You can expect to save between 20% and 40%
dependant on the scheme your employer
uses and the original purchase price and
the great news is you can have the use
of a brand new bike and equipment
right now without spending
anything at all.
The bike doesn’t have to be
used solely for commuting to
work. Officially the deal is that
you should use the bike at least
50% of the time for work related
journeys, but we are yet to hear of
any employer who is upset that his
staff are keeping fit in their own time.
The ceiling on the purchase is £1000
including VAT. The purchase can include
accessories but they must be such that they are safety
orientated and would be used on a commute to work.
The first thing you need to do is to speak to your
company’s Human Resources Department. You will be
told which scheme your company is dealing with and
you can then apply for a voucher to cover the cost of
the purchase. You must then purchase the bike and
equipment from one of the scheme’s partner shops. All
of the schemes charge a commission. That’s how they
make their money, so it will not be possible to avail of
other discounts on retail price.
There aremany agencies that carry out the administration
on behalf of participating employers and presently we
are a partner shop of
Bike2Work, Cyclescheme, Bike To
Work, Salary Exchange and Bikes for Staff
and can even
accept Halfords vouchers
. We are constantly looking to
expand our coverage. If your employer is with another
provider please let us know.
If your employer is not signed up with a cycle scheme
provider then
it’s time you encouraged them to do so
.
Cycle to work schemes
The Cycle to Work Scheme was introduced in 1999 as a government
initiative to encourage cycling to work and promote a healthier lifestyle,
while at the same time reducing traffic congestion and pollution.
2 The Square, Newport, Shropshire TF10 7AG Ask us about our Workplace Demonstrations - Arranged at your employer’s convenience.22
AUGUST 2015