HOW IT WORKS
Cycle to Work schemes gives employees the opportunity to buy bikes through their employers, leasing the bike for the duration of the contract and then purchasing the bike from the employer at the end of the contract agreement, giving up to 39% savings on the cost of a new bike!
We accept most of the major cycle to work providers vouchers including, Cyclescheme, Green Commute Initiative, Halfords Cycle 2 Work, Bike 2 Work. We work with many others too, so check with your employer’s scheme provider to see if we are registered with them.
The savings are achieved through a combination of business purchases being VAT exempt and then you save on Income Tax and National Insurance through salary sacrifice. Although the bike will remain the property of the business throughout the term of the contract (usually between 12 and 18 months) the bike is, for all intents and purposes, yours to take home. At the end of the contract, you are free to purchase the bike from your employer for its market value, typically a very small percentage of the initial cost.
CYCLE TO WORK WITH CYCLESCHEME
- Massive savings on the cost of a new bike – up to 39%, depending on your level of income.
- Monthly repayments allow you to spread the cost of the bike over 12-18 months (depending on the scheme).
- No initial down payment, your first payment is taken out of your next month’s salary (a fully refundable deposit may be required, though, if you want to secure a bike before receiving your voucher).
- Cycling to work is both fun and a great way to improve your fitness. For Cyclescheme.co.uk applications our shop code is ‘Pearsons’.
- A fitter, healthier team of employees, less likely to require sick leave.
- Cycling is a proven stress-reliever, making employees more productive and better able to handle work pressures.
- Employers also benefit from savings through reductions in National Insurance contributions.
- Corporation tax savings are also possible, resulting in a company potentially making money through providing a cycle to work scheme.
- Freeing up of parking spaces by employees who would otherwise have driven to work.
- A great addition to any benefits package, promoting staff loyalty.
How much will I save?
Costs will vary depending upon the bike that you purchase and your level of income, but here is an example of the savings that you could make:
In this example, a £600 package has been purchased, consisting of a bike costing £500 and £100 worth of accessories, with repayments being made over a 12 month period.
|Basic Rate Income Tax (20%)||Higher Rate Income Tax (40%)|
|Retail Price (incl. VAT)||£600||£600|
|Income Tax/NI saving||£186||£246|
|Monthly salary sacrifice||£34.50||£29.50|
|Total Cost of package||£414||£354|
For a better estimation on how much you could save, cyclescheme.co.uk provides a savings calculator, taking into account your salary and the amount you’d be looking to spend on a bike and accessories.
How much can I spend?
Most employers will limit you to around £1,000 to spend on a bike and accessories, but some schemes do allow you to add to this with your own money. Any additional payments you do make towards the overall cost, though, will not be eligible for any of the savings, so you will have to pay all of the extra cost.
Does your employer offer a scheme?
The first thing that you need to do is speak to your HR department to find out which Cycle to Work scheme (if any) your employer has registered with.
If your employer does not currently offer a cycle to work scheme, you will need to get them to register with one of the schemes.
Choosing your bike
If, however, your employer is already signed up to a scheme, of which we’re a partner, you will be asked to provide details of the bike and accessories that you wish to purchase through the scheme. The best way for us to assist you in choosing a bike and accessories that match your needs is to visit us at our shop, but if you are unable to get here easily, we can try to help you with your choices over the phone or via email. You can find directions to our Sutton and Sheen and also our contact details in the Contact Us section of the site.
Once you have chosen the bike and accessories that you want, you will need to provide those details to either your HR department or the scheme providers, depending on which scheme you are applying through. Once your employer and the scheme provider have both approved the application, you will be provided with a means of payment for the bike and accessories – usually either through a voucher or an invoice – equivalent to the value of the package. If, however, you would like to reserve a bike before your voucher or invoice comes through, you can place a deposit down on a bike, which will be refunded in full once we receive your voucher; this way, you can guarantee that we will have your bike ready for you the moment your payment arrives.
Collect Your New Bike
Once we have received payment, the bike is yours to collect or, alternatively, we can arrange for it to be delivered to you (this may incur an additional cost).