Cycle to Work Schemes - Essential Information
In 1999, as part of the Finance Act, the Government launched the Cycle to Work scheme, which provided the mechanism for employers to loan bicycles to employees on a tax-free basis, through the means of a deduction from their earnings. Typically this allows the employer to get a brand new bike and accessories and typically save between 38 and 45% on the purchase price. At the end of the loan period (usually 12 months) the employee can buy the bike outright for a nominal amount (see table below).
The aim of the move is to increase the level of employees cycling to work which has a considerable range of benefits to the individual, the employer and the planet.
Since the implementation of this legislation, the scheme as been delivered through a number of commercial operators, listed below, who can help employers of all sizes set up and administer a scheme at workplace level.
How the schemes work
Arrangements differ from scheme to scheme, but essentially this is how the scheme operates from the viewpoint of the employee.
1. Find out if your employer is enrolled in a cycle to work scheme and if so, find out which one.
2. Select your bike and accessories from a participating retailer (usually up to the value of £1000 unless your employer has its own credit licence in which case this limit can be higher) and obtain a quote
3. Submit your quote to your employer, who will obtain a the go-ahead from the appointed cycle to work scheme and give you details of your monthly payments
4. Once you've had written confirmation (often in the form of a voucher) contact the retailer who'll order your bike
5. Ride and enjoy!
6. Your agreed monthly payment will be deducted from your wages and will appear on your wage slip for the duration of the loan agreement (usually 12 months).
7. At the end of the loan period, you'll be given the opportunity to return the bike to your employer or buy it outright for a nominal price, based on the fair market value of the bike at time of sale, based on the table below.
Fair Market Valuation Table (taken from www.hmrc.gov.uk)
Age of Cycle
Acceptable Disposal Value Percentage
Original Price Less Than £500
Original Price More Than £500
6 Years & Over
Cycle to Work Scheme Providers
Click the provider name to link to their website. This is not an exhaustive list. If you are a cycle to work scheme provider (not a retailer who is affiliated to a cycle to work scheme) and would like to be listed here, contact us.