We are registered with Cyclescheme & Bike2Work Tax Free schemes that are designed to help you save money.
There are many names associated to the Government scheme, Bike to Work, Cyclescheme, Cycle to Work but they are all part of a Government initiative designed to help you get back on your bike and commute to work, saving money and helping you get fitter.
Contact us on 01908 260322 if you have any questions about the schemes we are part of at Twenty3c.
Some FAQ’s from Cyclescheme to help you understand more about ‘cycle to work’ and how it will benefit you.
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 Cyclescheme to discuss the range of attractive options available 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 18s can join the scheme if their 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 a 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. Most employers can pass on a VAT saving to participating employees.
How does payment work?
Your hire payments are deducted from your gross monthly salary. At the end of the hire period employees may be given the opportunity to buy the bike for the market value, however this cannot be an automatic entitlement. Many employers opt for Cyclescheme to take ownership of the bikes at the end of the hire term, in which case any offer sale to the employee will come directly from Cyclescheme.
What are the savings for the employee and employer?
Typical savings for employees are between 42% and 52%, 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. 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.
What is the maximum value bicycle and safety equipment package employees can select through the scheme?
The Office of Fair Trading (OFT) has issued a group consumer credit license to cover Employers implementing Cycle to Work Schemes that are limited at £1000 inc. VAT per Certificate.
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. Please note that employees cannot claim business mileage allowance with a bike that is being hired to them by their employer.
What happens if an employee leaves their job or is made redundant?
Once signed, the Hire Agreement is non-cancellable following a cooling-off period of 7 working days following collection of the goods. This means that if an employee leaves or is made redundant from their employment during the hire period they are obliged to pay the remaining salary sacrifice amount in full from net pay i.e. without any tax exemptions.