Focus back on Cycle to work schemes
Posted on in Business News , Cycles News
With the weather (hopefully) improving and the drive towards more active pathways gaining momentum, there is likely to be a renewed focus on cycle-to-work schemes as an attractive way to finance a move into cycling.
Since 1999 the Government’s Cycle to Work scheme has helped over a million UK workers get people moving and reduce carbon emissions associated with travelling.
The cycle-to-work scheme works, very simply, by hiring a bike that your employer has purchased and repaying them through monthly instalments over an agreed period. Once this period has elapsed, you’ll be given the option to pay off whatever is outstanding to fully ‘own’ the bike yourself. The cycle-to-work scheme is essentially a salary sacrifice; you are sacrificing a portion of your salary for the benefit of the bike.
The minimum term of the salary sacrifice is generally 12 months, with some schemes and employers offering 36 or 48-month options too. How long you can spread your monthly payments will largely depend on the scheme, your employer, and your own working circumstances.
The scheme is particularly cost-effective because the monthly instalments are taken from your gross salary, which means that your tax and national insurance will be calculated on your salary less the cost of the bike (and any accessories you’ve added). You are therefore reducing your taxable income, which ultimately means you’re taxed less across the hire period.
Cycling News have run a great “all you need to know about…” article on the Cycle To Work scheme, which you can access here: https://www.cyclingnews.com/features/cycle-to-work-scheme-everything-you-need-to-know/