Employer Frequently Asked Questions

Who is Bike 2 Work Scheme? We are a 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 Governments Cycle to Work scheme, providing all necessary paperwork and promotional materials completely free of charge. We offer a partnership of over 1,700 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 the 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.

Is the scheme available to all employees? Government guidelines state that in order to qualify for the tax exemption, the scheme must be offered to all employees and not just directors or to certain employees as an incentive.

Who administers the scheme? Bike 2 Work Scheme will administrate the scheme completely free of charge on behalf of the employer. All the employer needs to do is deduct the weekly/monthly salary sacrifice from the employee's salary - information that we will provide.

How does Bike 2 Work promote the scheme to employees? Bike 2 Work Scheme will provide advertising literature in order for employers to promote the scheme to their employees which can be personalised if required.

Do we have to be registered for VAT to use the scheme? You do not need to be VAT registered to run the scheme. The savings are made through Income Tax and National Insurance only.

Can the employer reclaim VAT on the purchase of the bike/equipment? Following the Astra Zeneca court case in 2011, HMRC announced that, from 1st January 2012, employers are no longer permitted to pass the VAT saving on to the employee. Therefore, all VAT repaid by the employee must be declared as output tax meaning there is no financial gain for the employer or employee. Note that safety helmets are exempt from VAT.

Do we need approval from HMRC? You do not need prior authorisation from HMRC to take advantage of the Cycle To Work Scheme or to operate a salary sacrifice scheme.

Are there any credit-checks involved? There are no credit-checks involved.

How are the savings made? The scheme allows employees a tax exemption whereby they save on Income Tax and National Insurance contributions by having the cost of the bike deducted from their gross salary via salary sacrifice. Payment is to be made in the form of interest free weekly/monthly instalments.

What is a salary sacrifice? Salary sacrifice is where an employee gives up the right to part of their pay due under his or her contract of employment. Usually, the sacrifice is made in return for the employer's agreement to provide the employee with some form of non-cash benefit, for example a bicycle.

How do the savings work? 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 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.

Employer savings Employers will typically save up to 13.8% of the salary sacrifice amount.

How does it work? Employer registers via our website and obtains a unique Bike 2 Work PIN which they provide to staff. Employee visits one of our partner shops (listed on our website) to make their selection and obtain a written quotation. Employee registers with Bike 2 Work Scheme and logs in to submit their quotation using the employer PIN. Employer will receive notification that a quote has been submitted and needs authorising. An e-mail will be sent to the employee to advise if their quote has been approved/declined. If approved, Bike 2 Work Scheme will generate the invoice and hire agreement. The employer will receive an email asking them to log in and download both the invoice and hire agreement. The hire agreement needs to be signed by both employer and employee before payment is made to Bike 2 Work Scheme (the agreement can be kept for the employer/employees records only.) Once signed by both parties, payment can be made to Bike 2 Work Scheme as per the invoice. The voucher will be processed the same day as payment clears in our account and posted to the point of contact within the company (unless otherwise agreed). Both the employer and employee will be notified that payment has been received and the voucher issued.

When does the employee start to pay? Salary sacrifice is to commence when the employee has signed their hire agreement. Some employers may choose to wait until the employee has collected their bike.

What is the minimum or maximum repayment period? There is no minimum or maximum repayment period. As long as the employees hourly rate remains above the National Minimum Wage employees can repay over any period of time. Some employers may insist employees repay over a certain period i.e 12 months. You can check this information with your HR/payroll department.

Can employees pay off the balance early? No, once agreed and the hire agreement is signed the salary sacrifice period is fixed.

Who does the bike/equipment belong to? The employer is the owner of the bike/equipment and the employee leases the bike from their employer for the duration of the salary sacrifice period (hire agreement). If a finance company is used, they will own the bike.

What happens when the instalment plan has ended? 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. Bike 2 Work 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 Bike 2 Work Scheme (either 3% or 7% depending on the original cost of the bike/equipment) and continue to lease the bike/equipment from Bike 2 Work Scheme for a further 36 months. If at the end you decide to keep the bike, Bike 2 Work will retain your deposit. If not, you will need to return the bike to Bike 2 Work 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 Bike 2 Work Scheme. Please contact us direct to find out which options are available.

What if an employee’s employment ends? 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 the employee. Please contact Bike 2 Work Scheme to discuss your options and for further information.

What happens if an employee is off work? If an employee is on leave and their monthly salary sacrifice cannot be met (eg: earnings fall below the National Minimum Wage Limit) then their payments must be suspended until they are earning above the limit again.

How much does the scheme cost to the employer? The scheme is free of charge to set up and costs nothing to run. The employer makes the initial purchase and then leases the bike/equipment to the employee via a salary sacrifice, until the full amount is recovered. Employers typically save 13.8% of the total value of the salary sacrifice total per employee in Employers NI contributions.

Where can employees get their bike? Employees can get the bike and equipment from any of our partner bike shops, a full list is available here.

Can employees choose bikes using an online store? Yes, we also offer a selection of online stores. Please contact the provider and request a Bike 2 Work Scheme quotation.

How much can employees spend?   Employees can spend between £1 - £1000. The Financial Conduct Authority has issued a licence that permits employers to issue hire agreements up to the value of £1000 in order to run a Cycle To Work Scheme.   If employees wish to purchase items over the £1000 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 £1000. 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 £1000 limit and make savings on the whole amount, they will need a Consumer Credit Licence from the Financial Conduct Authority.  

What equipment can employees choose? 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.

Can employee's add their own money to their voucher?   Yes, employees are able to purchase items over the £1000 limit, however, this will not form part of their salary sacrifice and therefore they will only make savings on the £1000. All equipment will remain the property of the Employer during the Hire Agreement, regardless of adding their own money.   If a company wishes to allows employees to purchase equipment over the £1000 limit and make savings on the whole amount, they will need a Consumer Credit Licence from the Financial Conduct Authority.  

Can employees use their voucher for someone else? Due to the tax exemption the bike and equipment chosen must be for personal use. The voucher is exclusive to the employee and non-transferable.

Can employees get more than one bike? An employee can choose more than one bike, however the two combined cannot total more than £1000 (unless your company has a Consumer Credit Licence). Note that both bikes must be used by the employee for journeys to and from work. For example, they may get a summer bike and a winter bike to accommodate the different conditions.

What happens if an employee's bike is stolen or damaged? If a bike is stolen during the repayment period the employee is still responsible for repaying the full cost of the bike. If the bike is replaced through a third party insurance company then the repayments continue to be deducted from the employee’s gross pay. If not replaced, the deductions must then be taken from the employee’s net pay as they will no longer be able to qualify for biking to work. It is recommended that the employee arrange appropriate insurance to cover the bike and equipment.

How can employees insure their bike?     Employees can insure their bike through Cycleplan, our official cycle insurance partner. Policies are currently available with a 20% discount. Visit www.cycleplan.co.uk/b2w  or telephone: 08000929268 and quote ‘b2w’            

How often must employees cycle to work and can they use their bike during leisure time? Yes, but the equipment must mainly be used for travelling to and from the employee's place of work. The government guidelines recommend that at least 50% of the time using the equipment should be for work related journeys. Employers and employees are not expected to keep a log of their mileage.

What documentation do we need to sign? The employer will need to sign up with Bike 2 Work Scheme. Each employee will need to sign a hire agreement, which sets out details of their salary sacrifice. We will provide the necessary paperwork that ensures you will comply with all the regulations.

When can they collect their bike? The bike and equipment can be collected as soon as the employee receives their voucher from Bike 2 Work Scheme. We recommend that they contact the bike shop prior to collection. Employees will need to take photographic ID with them to the bike shop when redeeming the voucher.

Can employees choose equipment only? Yes, employees are able to choose equipment only and there is no minimum spend.

Can employees have two schemes running at once? Yes, as long as the total of both do not exceed the £1,000 limit (unless your employer has a consumer credit agreement).

Can employees choose sale items through the scheme? Yes, sale items can be chosen via the Bike 2 Work Scheme. Some bike shops may not allow sale items to be chosen or may add an admin fee onto your quotation. Please check this information direct with our partner bike shops.

How can I promote the scheme to my employees? Upon registration Bike2Work Scheme will send you out a welcome pack including leaflets and posters. However, if you would prefer to you can download the electronic leaflet here.

Employee Frequently Asked Questions

Who is Bike 2 Work Scheme? We are a 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 Governments Cycle to Work scheme, providing all necessary paperwork and promotional materials completely free of charge. We offer a partnership of over 1,700 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 the 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.

Is the scheme available to all employees? Government guidelines state that in order to qualify for the tax exemption, the scheme must be offered to all employees and not just directors or to certain employees as an incentive.

Who administers the scheme? Bike 2 Work Scheme will administrate the scheme completely free of charge on behalf of the employer. All the employer needs to do is deduct the weekly/monthly salary sacrifice from the employee's salary - information that we will provide.

Are there any credit-checks involved? There are no credit-checks involved.

How are the savings made? The scheme allows employees a tax exemption whereby they save on Income Tax and National Insurance contributions by having the cost of the bike deducted from their gross salary via salary sacrifice. Payment is to be made in the form of interest free weekly/monthly instalments.

What is a salary sacrifice? Salary sacrifice is where an employee gives up the right to part of their pay due under his or her contract of employment. Usually, the sacrifice is made in return for the employer's agreement to provide the employee with some form of non-cash benefit, for example a bicycle.

How do the savings work? 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 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.

How does it work? Employer registers via our website and obtains a unique Bike 2 Work PIN which they provide to staff. Employee visits one of our partner shops (listed on our website) to make their selection and obtain a written quotation. Employee registers with Bike 2 Work Scheme and logs in to submit their quotation using the employer PIN. Employer will receive notification that a quote has been submitted and needs authorising. An e-mail will be sent to the employee to advise if their quote has been approved/declined. If approved, Bike 2 Work Scheme will generate the invoice and hire agreement. The employer will receive an email asking them to log in and download both the invoice and hire agreement. The hire agreement needs to be signed by both employer and employee before payment is made to Bike 2 Work Scheme (the agreement can be kept for the employer/employees records only.) Once signed by both parties, payment can be made to Bike 2 Work Scheme as per the invoice. The voucher will be processed the same day as payment clears in our account and posted to the point of contact within the company (unless otherwise agreed). Both the employer and employee will be notified that payment has been received and the voucher issued.

When do I start to pay? Salary sacrifice is to commence when the employee has signed their hire agreement. Some employers may choose to wait until the employee has collected their bike.

What is the minimum or maximum repayment period? There is no minimum or maximum repayment period. As long as the employees hourly rate remains above the National Minimum Wage employees can repay over any period of time. Some employers may insist employees repay over a certain period i.e 12 months. You can check this information with your HR/payroll department.

Can I pay off the balance earlier? No, once agreed and the hire agreement is signed the salary sacrifice period is fixed.

Who does the bike/equipment belong to? The employer is the owner of the bike/equipment and the employee leases the bike from their employer for the duration of the salary sacrifice period (hire agreement). If a finance company is used, they will own the bike.

What happens when the instalment plan has ended? 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. Bike 2 Work 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 Bike 2 Work Scheme (either 3% or 7% depending on the original cost of the bike/equipment) and continue to lease the bike/equipment from Bike 2 Work Scheme for a further 36 months. If at the end you decide to keep the bike, Bike 2 Work will retain your deposit. If not, you will need to return the bike to Bike 2 Work 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 Bike 2 Work Scheme. Please contact us direct to find out which options are available.

How do I return my bike after the lease period? If at the end of the additional 36 month lease period, you decide you don’t want to take ownership of your bike/equipment you must return them to Bike 2 Work Scheme. Please inform us that you wish to return by e-mail, info@bike2workscheme.co.uk or post Bike 2 Work Scheme, Number Sixty One, Tithebarn Street, Liverpool, L2 2SB. Once we have been notified we will advise you of the following steps. 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. Once the bike/equipment has been received and verified, we will contact you to confirm and arrange refund of the deposit

What if my employment ends? 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.

What happens if I am off work? If an employee is on leave and their monthly salary sacrifice cannot be met (eg: earnings fall below the National Minimum Wage Limit) then their payments must be suspended until they are earning above the limit again.

Where can I get my bike?     You can choose your bike and equipment from any of our partner bike shops, a full list is available here

Can I choose a bike using an online store? Yes, we offer a selection of online stores. Please contact the provider and request a Bike 2 Work Scheme quotation. When redeeming your voucher, simply e-mail your voucher to the provider to arrange delivery.

How much can I spend? Employees can spend between £1 - £1000. The Financial Conduct Authority has issued a license that permits employers to issue hire agreements up to the value of £1000 in order to run a Cycle To Work Scheme. If employees wish to purchase items over the £1000 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 £1000. 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 £1000 limit and make savings on the whole amount, they will need a Consumer Credit Licence from the Financial Conduct Authority.

What equipment can I choose? 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.

Can I add my own money to the voucher? Yes, employees are able to purchase items over the £1000 limit, however, this will not form part of your salary sacrifice and therefore you will only make savings on the £1000. All equipment will remain the property of the Employer during the Hire Agreement, regardless of adding your own money. If a company wishes to allows employees to purchase equipment over the £1000 limit and make savings on the whole amount, they will need a Consumer Credit Licence from the Financial Conduct Authority.  

Can I use my voucher to get a bike for someone else? Due to the tax exemption the bike and equipment chosen must be for personal use. The voucher is exclusive to the employee and non-transferable.

Can I get more than one bike? You can choose more than one bike, however the two combined cannot total more than £1000 (unless your company has a Consumer Credit Licence). Note that both bikes must be used by you, for journeys to and from work. For example, you may get a summer bike and a winter bike to accommodate the different conditions.

What do I do if my bike is stolen or damaged? If a bike is stolen during the repayment period the employee is still responsible for repaying the full cost of the bike. If the bike is replaced through a third party insurance company then the repayments continue to be deducted from the employee’s gross pay. If not replaced, the deductions must then be taken from the employee’s net pay as they will no longer be able to qualify for biking to work. It is recommended that the employee arrange appropriate insurance to cover the bike and equipment.

How can I insure my bike?   Employees can insure their bike through Cycleplan, our official cycle insurance partner. Policies are currently available with a 20% discount. Visit cycleplan or telephone: 08000929268 and quote ‘B2W’      

How often must I cycle to work and can I use my bike during my leisure time? Yes, but the equipment must mainly be used for travelling to and from the employee's place of work. The government guidelines recommend that at least 50% of the time using the equipment should be for work related journeys. Employers and employees are not expected to keep a log of their mileage.

What documentation do I need to sign? The employer will need to sign up with Bike 2 Work Scheme. Each employee will need to sign a hire agreement, which sets out details of their salary sacrifice. We will provide the necessary paperwork that ensures you will comply with all the regulations.

When can I collect my bike? Your bike and equipment can be collected as soon as you receive your voucher from Bike 2 Work Scheme. We recommend that you contact the bike shop prior to collection. You will need to take photographic ID with you to the bike shop when redeeming your voucher.

What happens if the bike needs maintenance? The employee is responsible for maintaining their bike (eg: repairs and servicing). Our Partner Bike Shops will be happy to offer guidance.

Can I choose equipment only? Yes, employees are able to choose equipment only and there is no minimum spend.

Can I have two schemes running at once? Yes, as long as the total of both do not exceed the £1,000 limit (unless your employer has a consumer credit agreement).

Can I get sale items through the scheme? Yes, sale items can be chosen via the Bike 2 Work Scheme. Some bike shops may not allow sale items to be chosen or may add an admin fee onto your quotation. Please check this information direct with our partner bike shops.  

What further charges may apply? As per HMRC & Department of Transport guidelines, the employee must enter into a hire agreement not a purchase agreement, therefore the ownership of any items obtained through the scheme does not transfer to the employee automatically at the end of the hire agreement. However, the following option to transfer ownership to the employee may be offered and the following charges may apply: The fair market values set by HMRC decrease the older the bike/equipment is. In order to take advantage of this depreciation, we offer employees the option to enter into a further 36 months Extended Use Agreement with Bike 2 Work. This way the fair market value applied to the bike/equipment would drop from 18% and 25% (value after 1 year) to 3% and 7%. Entering into the Extended Use Agreement would allow the employee to continue using the bike/equipment for travelling to work but means they’re not being charged the higher transfer of ownership fee. The employee would enter into the hire agreement with the employer for the repayment period they have chosen. At the end of the repayment period (see section 5 of the Terms & Conditions) Bike 2 Work Scheme would automatically take ownership of any items bought through the scheme to Bike 2 Work. Bike 2 Work would then contact each employee at the end of their hire agreement and offer them the new transfer ownership method. Options may vary, for further information contact Bike 2 Work Scheme.

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