What Are cycle schemes
Cycle schemes are an employee based benefit that can save you 15-42% on a bike and accessories (or even more with our offers). You pay nothing upfront and the payments are taken tax efficiently from your salary by your employer.
Each Scheme has its own way of working so pick the one that best suits you.
The Rules of the cycle to work scheme
Rule 1 – who can apply?
The cycle to work scheme is a salary sacrifice arrangement, to partake in the scheme you must:
- Be 16 or over
- Earn at least minimum wage after the salary sacrifice has been taken from your pay
- Be paid and taxed via Pay As You Earn (PAYE) system
Rule 2 – what does my employer have to do?
To be able to join the cycle to work scheme your employer does need to register to join a specific scheme.
This is because the employer pays for the bike and / or accessories (in the first instance) and they organise for your monthly payments to come tax-efficiently from your salary.
Don’t worry, getting employers to sign up is easy! This is because employers recoup the full cost of your bike and up to 13.8% of its value on top! It’s win-win.
Rule 3 – what can I get?
The cycle to work scheme is awesome as it enables you to get all manner of cycling gear at a significant discount (whilst also spreading the cost).
You can get any accessory that keeps your bike wheels turnings, for instance:
- Safety accessories – that help keep you and your bike safe; helmets, bike lights, reflectors, mirrors, bells, locks…
- Essential accessories – necessary to cycle commute; clothing and shoes, mudguards, panniers, backpacks, child safety seats…
- Components and parts – that keep your bike in great shape; pumps, puncture repair kits, cycle tool kits, tyre sealant, groupsets, wheels, cranksets, cassettes…
What can’t you get?
You cannot get action cameras or GPS computers.
Rule 4 – how much can I spend?
Historically the cycle to work scheme limit was £1,000. However, the Government recently announced its intention to allow scheme providers such as Cyclescheme to work with employers to offer staff cycle to work packages of value.
Employers are not obligated to offer such a scheme, but because an increased scheme limit improves inclusivity it’s widely accepted that most employers will embrace the change.
Higher limits improve access to e-bikes, cargo bikes, handcycles and even everyday bikes like Bromptons.
Rule 5 – what do I have to do?
When you get a bike via the cycle to work scheme it’s vital that you get in the saddle and ride to work!
There is a rule of thumb that the Department for Transport asks you to adhere to, this is that 50% of the bike’s use is for a work-related journey. That means if you use the bike 15 times in a year, approximately 8 of those journey’s should be connected to your commute or work use. Of course, this is just an approximation – if you are riding to work 4 days and week and then also riding your bike in the evenings and weekends this is absolutely fine. The idea behind the scheme is to create avid cyclists, not penalise those who live in the saddle.
You also need to agree to the terms of the scheme, these are summarised below:
- Agree to your initial Hire Agreement (where you pay to loan the bike tax-efficiently
Insure the bike (to protect yourself against theft and accidental damage)
- Agree to an Ownership Option
Rule 6 – do I have to choose an ownership option?
Yes. It’s vital that you decide what to do with the bike after your tax-efficient hire period. We always recommend the ‘Own it later’ option as this ensures that you save the maximum amount of money (and save a minimum of 25%).
If Cyclescheme handles your employers’ ownership options, you can either:
- Own it later – you pay a deposit of 3 or 7% of the bike’s value (3% if the bike was initially under £500 and 7% if it was initially over £500). You pay nothing more. When the bike is 4 years old you take ownership of the bike. If you do not wish to own the bike you and return it and we will refund your deposit.
- Own it now – you pay either 18 or 25% of the bike’s value (18% if the bike was initially under £500 and 25% if it was initially over £500). You now own the bike.
- Return the bike – if after your initial hire period you do not want the bike you can return it.
Rule 7 – can I get a bike for someone else?
No. The scheme works because it’s your bike and you are riding it to work (generating your tax break) – you cannot get a bike for anybody else.
However, it is worth noting that you can get more than 1 bike on the scheme as long as they are both for your commute. For example, if you need a hybrid for regular commuting and a folding bike for city meetings or a bike for summer and a bike for winter, it’s acceptable to get both at once. An example that would not be acceptable would be the requesting of both a gents and a ladies bike (for instance)
PLEASE ALSO BE AWARE THAT YOU CANNOT CURRENTLY PURCHASE E-SCOOTERS OR E-SKATEBOARDS THROUGH THE SCHEMES!!
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