Cycle to work Employee FAQ
Cycling to work means you are helping the environment and not getting stuck in traffic on your journey. It’s also a great way of keeping fit and healthy and can save you money on the price of running and maintaining a car. With the Cycle to Work scheme, you can have access to cycling equipment for just a small sum from your salary each month.
- Can anyone take part in the scheme?
- What if I already own a bike?
- What is the maximum value of equipment I can obtain through cycle to work?
- How will a salary sacrifice affect me?
- What equipment is available?
- Can I just use the bike for leisure?
- Can I enter into more than one Hire Agreement?
- Can I take part in more than one scheme?
- Can I select more than one bike?
- What happens at the end of the loan period?
- Who owns the equipment?
- What happens if my bike gets stolen/accidentally damaged?
- What if I leave my job or am made redundant?
- Can I use the scheme to get a bike for a family member, partner or friend?
- Where can I get my bike and cycling safety equipment?
- How do I take part?
- My employer already uses Cyclescheme.
Can anyone take part in the scheme?
If your organisation is running a cycle scheme, anyone in a salaried job, on PAYE and with a contract of work covering the duration of the hire period can take part. If you are under 18, you may need an adult to act as a guarantor. However, as the scheme operates in the guise of a loan from your employer, payments might take you below the minimum wage which means you cannot take part. You also might not be able to take part during a probationary period with a company.
What if I already own a bike?
A different type of bike might be better for your commute to work – to tackle a different summer or winter route, or just with higher componentry to help you ride more efficiently.
What is the maximum value of equipment I can obtain through cycle to work?
Your employer will be able to advise you specifically, but in accordance with The Office of Fair Trading’s Group Consumer Credit Licence, you can hire up to £1,000 inclusive of VAT.
How much can I save?
You will be able to have the use of a bike at a discounted cost, but also be able to spread payments out rather than having to fork out the whole amount in one go. The amount saved depends on your salary and tax bracket. Some examples are below, and a handy calculator is here: Cycle Scheme Calculator
Basic Rate Taxpayer
Higher Rate Taxpayer
How will a salary sacrifice affect me?
Your overall salary will be reduced slightly and you need to be aware of the implications of paying less tax and NI contributions. It’s best to seek professional advice if you have any queries or questions. You might not be able to sacrifice any more of your wage if the total value of all your salary sacrifice payments takes your salary below National Minimum Wage.
A salary sacrifice may impact on pension schemes, contribution-based benefits such as State Pension; earnings-related benefits such as Maternity Allowance; and entitlement to work-related payments e.g. Statutory Sick Pay. A salary sacrifice will not necessarily have an impact on entitlement to holiday pay and bonuses. Your employer will be able to provide more details.
What equipment is available?
Eligible equipment includes cycles and cyclists’ safety equipment, at the employer’s discretion. The tax exemption defines a “cycle” as ‘a bicycle, a tricycle, or a cycle having four or more wheels, not being in any case a motor vehicle’. An electrically assisted pedal cycle can be included under the scheme. A range of safety equipment is available:
- Cycle helmets which conform to European standard EN 1078
- Bells and bulb horns
- Lights, including dynamo packs
- Mirrors and mudguards to ensure riders visibility is not impaired
- Cycle clips and dress guards
- Panniers, luggage carriers and straps to allow luggage to be safely carried
- Child safety seats
- Locks and chains to ensure cycles can be safely secured
- Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
- Reflective clothing along with white front reflectors and spoke reflectors
Bike Satnavs and cycle computers are not allowed within the Cycle to Work scheme.
Can I just use the bike for leisure?
The cycle and equipment must be used mainly (i.e. at least 50% of use) for commuting to work, for journeys made between the home and workplace, part journeys (e.g. to a station), for journeys between one workplace and another or in connection with the performance of your duties of employement. If, after joining the scheme, you don’t use the cycle and/or equipment mainly for commuting, you will no longer qualify for the tax relief afforded to this benefit and you cannot return the cycle and have your salary readjusted.
Can I enter into more than one Hire Agreement?
You can have more than one Hire Agreement with cycle to work, but you must ensure that the combination of Hire Agreements doesn’t take you below the National Minimum Wage. Your employer may chose to remove this option and restrict you to one hire term at a time.
Can I take part in more than one scheme?
Technically, you can apply again each time a scheme is run by your employer, but they may decide to make you wait until your first Hire Term has lapsed until you can join another scheme.
Can I select more than one bike?
You can purchase more than one bike as long as both bikes are identical – the same model, colour, etc. Both bikes must be used for journeys to and from work and cannot add up to more than £1,000.
What happens at the end of the loan period?
There is no automatic entitlement for you to take ownership of the cycles and safety accessories at the end of the loan period. However, your employer may choose to give you the option to purchase the equipment. Usually this is a fraction of the original cost, typically 5% or one extra payment (i.e. a 13th or 19th payment).
Who owns the equipment?
The legislation that governs a cycle to work scheme states that the employer must own the equipment. There can be no automatic right for the employee to own the equipment at the end of the Agreement. If they do, they cannot claim the tax exemption. Therefore a cycle to work scheme operates as a loan: the employer is technically loaning the equipment to the employee for a fixed-period of time. Although employees do not actually own the equipment, they remain the custodian of it and are free to use it as they wish, providing it is mainly for cycling to work.
What happens if my bike gets stolen/accidentally damaged?
If your home contents insurance policy covers bicycles, you must inform your insurer that your employer owns the bike. If not, you will need to obtain separate insurance. Loss or damage to the bike will not result in repayments under the scheme being stopped or suspended.
What if I leave my job or am made redundant?
You will be required to pay the balance of the amount left to pay to your employer if you leave before the end of the hire period. You can then continue to use the equipment (without further payment) until the expiry of the hire period and you may then be offered the chance to purchase the equipment for its then fair market value.
Can I use the scheme to get a bike for a family member, partner or friend?
The cycle and equipment must be used only by you, however child seats are covered by the scheme, so you would be able to transport a child.
Where can I get my bike and cycling safety equipment?
Tredz of course! Our friendly, knowledgeable staff will help you select the right cycle/cycling equipment from our wide variety of products and brands.
Whilst you can benefit from the great discounts Tredz offers in addition to the cycle to work savings, we have to reduce the discount by 10% on discounted items due to the Scheme’s admin charges. So, for example, an existing 25% discount becomes 15% on the Scheme (you will still get the additional cycle to work discount on top of this).
How do I take part?
If your employer is already running a scheme, you can email us with a list of items to firstname.lastname@example.org. We will then send you a quote within 48 hours, which you can then pass on to your HR department. If your organisation hasn’t yet set up a scheme, just give us a call (01792 799508) or contact Tredz cycle to work by email and we’ll sort this out for you.
My employer already uses Cyclescheme…
No problem. Tredz are also part of Cyclescheme and can provide you with a quote. You can then take your voucher into our Cardiff or Swansea bike shops. If you live elsewhere, use our website to find the bicycle you like. Then call us on 01792 799508 so we can reserve the bike while you send us your Cyclescheme voucher.