Cycle to Work enables your employees to get a bike tax-free, saving a minimum of 25% on its high street value. All schemes are completely free to join and most are easy to administer online. If you are struggling to decide between the schemes available, we recommend Cyclescheme due to its easy to use online system and brilliant customer service. However, we are able to provides bikes to your employees for all schemes available so do not hesitate to ask if you would like help setting up Cycle to Work for your business.
Why should you sign up to the Cycle To Work scheme?
- Fitter and healthier staff make for more productive staff.
- Healthy staff are less likely to be absent through stress or illness.
- You make savings on employer NI contributions (up to 13.8%)
- You will reduce your carbon footprint
- Most schemes are administered for you at no additional cost making it stress free and easy to use
- Make your employees feel appreciated by offering the scheme as an attractive benefit or bonus
- Relieves pressure on staff parking
- Bikes can be treated as a business asset to recover VAT
- Promotes your business as socially responsible
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Frequently Asked Questions
Who can participate in the scheme?
Any size employer from any sector can partner with Cyclescheme. Eligible employees must receive salary via the PAYE system, and earnings should be more than the National Minimum Wage after salary sacrifice. Employers who pay staff close to the National Minimum Wage should contact Cyclesheme to discuss the range of attractive options that allow lower paid employees to participate in, and benefit from the scheme. There is no credit check for employees wishing to participate, and under 18′s can join the scheme if a guardian signs a guarantor agreement.
What is salary sacrifice and how do participants save?
Salary sacrifice occurs when an employee agrees to give up part of their salary for an agreed period (in the case of the Cycle to Work scheme this is usually 12 months) in exchange for some kind of non cash benefit, such as the loan of a bicycle and safety equipment. As salary sacrifice is taken from the gross salary (before tax) rather than net pay it means the employee pays less income tax and National Insurance.
See www.hmrc.gov.uk/specialist/salary_sacrifice.pdf for a more detailed explanation.
What are the savings?
Typical savings are between 32% for basic rate taxpayers and 42% for high rate taxpayers, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme. If the employer uses external finance (i.e. borrows the money to buy the bikes from an outside agent) then savings will be approximately 5% lower. Employers can typically save 13.8% of the total value of salary sacrifice, due to reductions in Employers’ National Insurance Contributions (NICs) due.