- Who is Bike2Work Scheme?
We are a HMRC approved scheme provider of the Governments Green Transport Plan which aims to reduce environmental pollution, promote healthier lifestyles, and make cycling to work cost-effective by offering tax savings on bikes and cycling equipment. Our scheme makes it simple for Employers and Employees to take full advantage of the Government approved Cycle to Work scheme, providing all necessary paperwork and promotional materials completely free of charge. We offer a partnership of over 2,200 partner bike shops including a selection of online stores.
- Who is eligible for the scheme?
All company Employees qualify for the scheme, providing that they are UK taxpayers via the PAYE system and over 16 years of age. Earnings must remain above the level of national minimum wage after the salary sacrifice has been deducted. Employees under the age of 18 would need a guarantor to be able to participate. Self-employed individuals are not permitted to take part in the scheme.
- How are savings made?
The savings are made via a salary sacrifice scheme. The Employer pays the initial cost of the bike/equipment and the Employee repays the company that full amount back but through their gross pay (before tax and NI) saving on tax and national insurance. A basic rate tax payer could save up to 32% (20% tax and 12% National Insurance). A higher rate tax payer could save up to 42% (40% tax and 2% National Insurance). For a full estimate, visit our savings calculator on our home page.
- What can I purchase through the scheme?
Employees can get more than one bike on the scheme and safety equipment which includes:
- Cycle helmets which conform to European standard EN 1078.
- Bells and bulb horns Lights, including dynamo packs.
- Mirrors and mudguards to ensure riders visibility is not impaired.
- Cycle clips and dress guards Panniers.
- Luggage carriers and straps to allow luggage to be safely carried.
- Child safety seats.
- Locks and chains to ensure cycle can be safely secured.
- Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs.
- Reflective clothing along with white front reflectors and spoke reflectors.
It is the Employer's choice what safety equipment is offered, but you may wish to confirm with your local tax inspector whether the equipment you provide falls within the tax exemption. You can also acquire articles of clothing that are suitable for cycling.
- What happens at the end of the agreement / payment plan once I have paid back my Employer?
Due to the rules surrounding the scheme, there can be no guarantee of transferring ownership to the Employee once the hire agreement has ended. However, ownership is generally transferred to the Employee at the end of the hire agreement. Bike2Work Scheme will contact Employees at the end of their hire agreement regarding the options available. The most attractive option for Employees is to pay a small refundable deposit to Bike2Work Scheme (either 3% or 7% depending on the original cost of the bike/equipment) and continue to lease the bike/equipment from Bike2Work Scheme for a further 36 months. If at the end, you decide to keep the bike, Bike2Work will retain your deposit. If not, you will need to return the bike to Bike2Work Scheme and they will arrange a refund of your deposit. You will not be charged for disposal of the bike but you will be required to arrange delivery of the bike and are responsible for any cost in doing so. Please be aware, options may vary depending on when your Employer registered with Bike2Work Scheme. Please contact us direct to find out which options are available.
- What if I leave my Employer or get made redundant?
If employment ends before the end of the hire agreement term, then the bike/equipment will become a taxable benefit. The remaining balance owed to the Employer is to be deducted from the Employee's final net pay, ownership may then be transferred to you. Please contact Bike 2 Work Scheme to discuss your options and for further information.
- Is there a maximum spending?
Employees can spend between £1 - £1,000. If Employees wish to purchase items over the £1,000 limit they can add their own money to the order, however, this will not form part of their salary sacrifice and therefore they would only make savings on the £1,000. All equipment will remain the property of the Employer during the hire agreement, regardless if an Employee has added their own money. If a company wishes to allow Employees to purchase equipment over the £1,000 limit and make savings on the whole amount, they will need limited permission from the Financial Conduct Authority.
- What further charges may apply?
As per the guidelines set out my HMRC the Employee must enter into a hire agreement not a purchase agreement. Any items obtained through the scheme does not transfer automatically to the Employee at the end of the hire agreement as Bike2Work becomes the owner of the bike/equipment. However, the option to transfer ownership of the bike/equipment may be offered with the following charges that may apply. We offer Employees the option to enter into a further 36 month Extended Use Agreement with Bike2Work. By using this option the value of the bike would drop from 18% (for bikes under £500) and 25% (for bikes over £501) [this is the value of the bike after 1 year] to 3% and 7%. Entering the Extended Use Agreement allows the Employee to carry on using the bike for travelling to work but means that they won’t be charged the higher transfer of ownership fee. Bike2Work will contact the Employee at the end of the Hire Agreement and offer them the most suitable option for transferring ownership. Options may vary, for further information please contact Bike2Work Scheme on 0330 088 4765 or send an email to firstname.lastname@example.org
- Can't find what you're looking for?
You can give Bike2Work Scheme a call on 0330 088 4765 or email us on email@example.com.