By taking advantage of the government's Cycle to Work initiative you can save hundreds of pounds by buying a bike and safety equipment through your employer. A financial saving can be made by an employee as the bikes are priced without VATand are paid for before income tax. Effectively, an employer will buy the bike with all the relevant savings and then the employee can pay the employer back by way of a monthly salary sacrifice payment. Most employers run their scheme so the employee ends up being the owner of the bike after 12 or 18 months of salary sacrifice.
Depending on the bike's value and your income tax bracket, you could save around 32% on a bicycle and safety equipment.
Safety equipment includes: Helmets, clothing, Lights, Locks, Pumps, Pedals, Glasses, Gloves, Multi tools and Shoes
Full details of the government's tax breaks can be found HERE
How to obtain a tax free bike
There are 2 ways to take advantage of the tax breaks.
1. Your employer self administrates your salary sacrifice scheme in accordance with government regulations. In this case we sell your employer a bike with a VAT invoice, they do the rest. This can involve a lot of paperwork for your employer so the may prefer method 2.
2. Your employer uses an administrative company (in our case Cyclescheme) to do the paperwork for them. We quote you for a bike, your employer obtains a voucher for that amount, you collect the bike, you pay for the bike through a salary sacrifice scheme.
Why use Cyclescheme?
There are several administrative companies who will help your employer handle tax free bikes. Your employer will need to register with one of these administrators before they can run the scheme (unless self administrating). We have chosen to work with CycleScheme as they only operate with independent bike dealers and therefore offer employees a much wider choice of bicycles. Another advantage of using bikes is that all bikes are supplied by authorised dealers and therefore have full warranties.
If your employer has registered with CycleScheme, the next step is for you to visit us to obtain a quote.
Steps involved in you obtaining a tax free bike:
1. You visit us and we find the best bike and correct size for you. We provide you with a quote for the bike and any safety equipment (helmet, jacket, lights etc.)
2. You give the quote to your employer who submit it to Cyclescheme.
3. Cyclescheme provide you with a voucher which you use to purchase the bike from us. At this stage you will need to produce photographic ID with your voucher (passport or photo driving licence)
Note: If you would like a bike valued over £1000 your employer will need a credit licence. (They are effectively loaning you the bike on credit until your salary sacrifice has ended)
Can you ship the bike?
No. All bikes must be collected instore so we can perform a photgraphic ID check
Do the bikes come with Podium Points?
No, unless your employer is self administrating. The charges imposed by the administrator mean that we cannot offer our Podium Point scheme with CycleScheme bikes. However, you will still make a substantial saving on your bike and safety equipment.
Can Cyclescheme be used to buy sale bikes?
Yes, but there may be a price increase to your employer to cover the administration charges. However, you will still make a substantial saving on your bike and safety equipment.
Can I "Top Up" my voucher with additional cash?
We recommend you discuss this with your employer. Adding cash to a voucher can cause problems with dual ownership of the bicycle. It is your responsibility to discuss the possible consequences of this dual ownership with your employer.