We are pleased to be a participant retailer in the Cycle to Work Scheme. We have adopted the scheme to the benefit of many local and national organisations and employees. Most recently we have had customers from Translink and The Southern Health and Social Care Trust.
The scheme offers excellent value to employees whose employer has opted onto the Cycle to Work Scheme. The scheme is a government initiative offering tax free bikes for work through independent bike shops. The scheme is available in the United Kingdom and Ireland.
What Is The Aim Of The Scheme?
- To encourage a greener environment;
- To improve employee health and wellbeing.
How Does It Work?
- Check that your employer has endorsed the scheme for employees.
- For centralised administrative purposes some employers have selected one supplier which employees can purchase bicycles from. The majority of employers have opted to let employees avail of assistance and support from their local independent supplier, check with your employer what your choices are.
- Check if your employer has set a limit on the value of the purchase you can make. This is important before you progress to the next step. Advise your employer of your intention to obtain a quotation for a new bicycle through the scheme and they will provide you with the necessary information.
- Visit our store and we will advise what type and size of bicycle best suits your needs. We can also help with any accessories you may require eg. helmets, lights, mud-guards, trouser clips, reflective clothing, a milometer etc.
- Once you have made your selection we will provide you with a quote. The quote will itemise your purchase.
- Return the quote to your employer along with the completed paperwork. Upon approval your employer will supply us with a Purchase Order Number. Upon receipt of the purchase order number we will contact you to advise that your bicycle is ready for collection.
- Collect your bicycle. We will raise an invoice directly to your employer for payment.
- Your employer will pay us for the bicycle directly into our bank account.
- Over a pre-agreed period your employer will debit your monthly pay. This is known as a salary sacrifice. It commences over a period which is usually 12 months.
- Enjoy your bicycle!
How are savings made?
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. Employers that can reclaim VAT usually pass this saving on to their employees, which increases savings further.
What is the typical saving?
Typical savings are between 40% and 50%, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme. Higher rate taxpayers will save more, employees whose company cannot reclaim VAT (the NHS, for example) will save less.
What happens at the end of the hire period?
At the end of the hire period employees may be given the opportunity to buy the bike for a full market value, however this cannot be an automatic entitlement. The cost of full market value cannot be stated before or during the hire period as this could be considered a benefit in kind and therefore not be eligible for tax benefits.
Does the bike have to be used for commuting?
Employees should use the bike mainly for commuting to and, if relevant, between work places (at least 50% of the bike’s use should be for work purposes). However, the bike can also be used for non-work purposes and there is no need for employers to monitor individual usage or for employees to keep a mileage log.