How does the Cycle to Work scheme work?
The e-bike and equipment are leased to you by your employer who will deduct monthly ‘salary sacrifice’ amounts from your gross salary to cover the cost of the equipment.
- Because the deductions are from gross salary it means you pay less tax and NI, which is how the savings are made. Depending on how much tax you pay and which scheme your employer offers you can typically save 32%-42% on a bike of your choice and/or safety accessories
- You can use the e-bike for either your full journey to/from work or part-journey, e.g. to/from the station. You can also use the e-bike for leisure cycling.
For example if you salary sacrificed £700 for your new e-bike and cycling kit, the monthly deductions from your gross pay would be £58.33. That’s £700 divided by 12 months. As your gross pay has reduced by £700 you won’t pay tax or national insurance on that amount. So if you were a basic rate tax payer the real total cost to you would be £476, which is a saving of £224 or 32%. Higher rate tax payers will save even more.
What does ‘salary sacrifice’ mean?
Salary sacrifice means giving up part of your salary in exchange for a benefit, in this case the hire from your employer of a bicycle and /or cycling safety accessories. Salary sacrifice deductions are taken from your gross salary meaning you pay less tax and NI. This saves a basic tax payer approximately 32% on the cost of the equipment and a higher rate tax payer, approximately 42%.
For example, on a certificate value of £1000 over 12 months, the deductions will be £1000 / 12 (months) = £83.33 which will be taken from gross pay.
Exact savings will vary depending on personal circumstances and the specific way in which your employer operates the scheme.
What cycling equipment can I get?
You can get any adult e-bike and a wide range of cycling equipment and clothing. You can select cycling equipment with a e-bike, or if you are already have a e-bike and are cycling to work you can choose to get equipment only, with all the same tax savings.
A wide range of cycling equipment can be included and scheme guidelines (as set by HMRC) advise a ‘common sense approach’ should be taken when considering items to include.
As a guide any items which help make you safer, keep your bike safe, or help with your commute can be included, as follows:
• Pannier racks
• Tools & maintenance items*
• Child seats*
• Car racks*
• Replacement bike parts*
*Tools & maintenance items – workstands not included
*Child seats and car racks – can be included if your journey to work at any time involves using this equipment. Cycle clothing needs to contain some high viz or reflective detail.
*Replacement bike parts – to keep your bike safe on the road, for example: brakes, chains, cassettes, derailleurs, groupsets, wheels.
Please note HMRC currently excludes the following items from the scheme:
- Computers, including GPS units
- Energy food and drink
To check if a particular item can be included, contact us or your scheme provider.
Can I choose cycling equipment only, without getting a bike?
Yes, if you are already cycling you can get cycling equipment without getting a e-bike. The equipment must still be within the guidelines above.
Can I order components to build a complete bike?
Yes you can but this needs to be done through us in store as all components to make up a complete roadworthy bike must be ordered at the same time. It is not possible to order frames and forks online.
Is there a minimum and maximum amount?
Is there a maximum amount I can apply for? The minimum is £100 and the maximum is governed by your employer.
(Some employers are able to offer a higher maximum limit with a Consumer Credit Authority. Please check with your employer or scheme provider)
Can I buy equipment which is on sale, special offer or using Price Match?
Yes you can – which will give you even better savings through the scheme!
Can I get more than one bike?
You can get two bikes – for example, if you cannot take your bike on the train but you need a bike at each end of your journey. Please note the scheme does not allow you to obtain a bike for someone else
Do I need to have chosen a bike and equipment before I apply?
Not necessarily, it depends on which scheme provider your employer works with. Check details of scheme providers above as some do require quotes as part of the application process. You can visit a store or go online to decide how much you’d like to spend on a bike and/or accessories. We provide quotes at any of our stores, online or over the phone. The main thing is to decide how much you want to spend as this will be the amount of your salary sacrifice. The price of your certificate cannot be changed. All certificates must be redeemed in full and they are for a one time use. You need to exchange the certificate for your selected equipment within 3 months from date of issue.
I live too far to cycle to work, can I still get a bike on the scheme?
You can still get a bike and accessories through the scheme if you intend to cycle any part of your journey to/from work. You do not have to keep a mileage log but generally at least 50% of the bike’s usage should be for commuting purposes. You can also use the bike for leisure cycling.
Who is responsible for maintaining the bike?
It is your responsibility to maintain the bike but we do offer a free bike check-up after 6 weeks and all our stores have a full workshop.
Is the bike insured through my employer?
No. We strongly recommend that you insure the bike as your employer will still deduct the salary sacrifice payments even if the bike is stolen.
When do I start paying?
Your monthly salary deductions will normally begin in the next pay period after you have joined the scheme. Your employer will start the deductions regardless of whether you have taken delivery of the bike or not. Check your pay slip to confirm salary sacrifice is underway.
Who does the equipment belong to?
The bike and equipment are leased to you by your employer who will deduct monthly ‘salary sacrifice’ amounts from your gross salary to cover the value. At the end of this period, your employer may transfer the title of the goods or your hire continues for free with us.