Cycle to Work Schemes

If you were thinking about starting to get to work by bike, and with rapidly rising petrol costs there has never been a better time to consider it, then you should qualify for a tax incentive introduced by Government a few years ago, aimed specifically at getting more people to Cycle to Work. Government intentions are to reduce pollution and improve health at the same time :-)

How it works...

• Your employer signs up for the scheme
• You then choose a bike from an approved supplier
• The bike is then bought by your employer who reclaims the VAT* (some employers, particularly NHS, Education and Charities are not registered for VAT and therefore there is no VAT saving.)
• You then take delivery of the bike for your exclusive use - provided you use it for qualifying journeys, i.e. commuting to work
• The VAT free price is then deducted from your salary by equal instalments over a period of time (typically 12 or 18 months), but as you don't pay tax or NI on the income you forego, this will give you further savings.
• After the period of salary sacrifice, the employer may give you the option to purchase the bike at a 'fair market price', though this price depends on the period you have had the cycle hired to you and its condition.

The above is taken loosely from official Department for Transport info.

"Fair Market Price" has not yet been tested but many facilitators of schemes are suggesting to employers that the fair market value is around 5%.
Cyclescheme's recommended Fair Market Value is 5% + VAT which, when you consider they experience around 12.5% accessory content in the hire agreements, equates to just under 8% (inc. VAT) FMV of the original bike price.

Do I own the bike?

No. During the scheme period, your employer is hiring the bike to you for an agreed fee. At the end of the loan period it is anticipated that employers give employees the opportunity to purchase the item(s) outright for the above mentioned Fair Market Price.

Should I consider getting a bike through this method?

This is a question we can't answer for you.

Certainly, we would recommend investigating into the scheme with your employer if the scheme is already set up.

If your employer already has a scheme in place, consider carefully whether the sheme providor (ie the facilitator your employer has chosen) can supply you with what you want and keep you serviced properly for the forseeable future. Some facilitators only offer limited ranges of bikes for you to choose from and it is possible that you might end up with an unsuitable bike just in the name of saving a few quid! False economy if you are made to compromise on the bike you get and future service levels.

How can I find out more?

Initially, download the following leaflets produced by Cycling England.


Then consider reading the more indepth info over at bikeforall.net

Facilitators

The following are Cycle to Work third-party facilitators who your employer can contact to help administer the scheme.

• CYCLESCHEME
  Cyclescheme works with over 1000 independent partner bike shops in England, Wales, Scotland and Northern Ireland.
  There's a virtually unlimited choice of bike available and no size bar to the number of employees they'll deal with. An advanced secure site is available for administrators to manage voucher applications on-line. Supplies free custom promotional literature to larger employers
• CYCLE SOLUTIONS
  Cycle Solutions has years of experience supplying bikes to the UK via their insurance replacements sector - Wheelies Direct. A range of over 100 brands are available, along with the latest cycle equipment. Bikes are delivered direct to employees homes and come with an extended 18-moth warrantee (as opposed the standard 12-months).
• EDINBURGH BICYCLE CO-OP
  Edinburgh Bicycle offers a good range of bikes and equipment and marketing back up with schemes. Has bases in Edinburgh, Aberdeen, Leeds, Newcastle-upon-Tyne and Manchester.
• EVANS CYCLES
  Evans Cycles offers a good range of bikes and equipment and has 31 stores located mostly in London and northwest midlands.
• GRASS ROOTS
  The Grass Roots Group is a leading benefits provider that works primarily with Cyclescheme and Evans Cycles. GRG works with top blue chip companies like GSK, BSkyB, The Guardian Group, Atkins and Barclays.
• HALFORDS
  Halfords supplies own brands of bike and other in-store makes. There are 480 stores in the UK.
• HEALTHCARE COMMUNICATIONS
  Links with bike stores to distribute bikes mail order throughout the UK. Range of bikes is therefore wide using this mail order service.
• CLUB CYCLES
  Bikes supplied via Halfords.
• POWABYKE
  Powabyke's scheme enables employees to ride an electric-assist Powabyke to, from and during leisure.
• PMM EMPLOYEE BENEFITS
  PMM works with Halfords and independent cycle stores as required.
• PROJECT LINK
  Bikes supplied via Halfords.
• CYCLE2WORK NOWCycletoworknow is a mailorder service using an independent cycle store based in Nottingham. A compact range of good quality bikes are available.