How does hiring a bike to ride to work, then getting to buy it at a vastly reduced cost sound? What about encouraging your employees to get fit, take off fewer sick days, and save the planet? Well, that is precisely the opportunity that the Cycle to Work Scheme in the UK is offering.
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The reason is that employees can save from 25-39% on a new bike for work. All employees need to do is find a bike they like from one of over 2000 online and IRL stores. Then they can rent it from their employer for a specified time, and once that period is up, they can buy it for a discounted price.
How does the Cycle to Work Scheme work?
The Cycle to Work Scheme operates uniquely and simply. First, the employer buys the bike of the employee’s choice. Here are the benefits employers receive for doing so. Then employees get to rent the bike from them.
However, the employee doesn’t pay a hire charge in the traditional sense. Instead, the fees will be taken out of their gross pay in something known as a salary sacrifice. The benefit of this being that the employee doesn’t pay national insurance or tax on the cost of the bike.
Then, once the agreed rental period is up, the employer will commonly provide the employee with an opportunity to buy the bike outright, at a vastly reduced cost, of course!
Do I qualify for the Cycle to Work Scheme?
To qualify for the Cycle to Work Scheme, you must be 16 or over and be working. Your employer must also be signed up for the program, as you will need your employer code to proceed. It is also essential that once the salary sacrificed has been deducted from your pay, employees are left with more than the national minimum wage.
Self-employed persons can use the Cycle To Work Scheme, but only if they pay their tax with PAYE. Sadly, at the current time, those unemployed or self-employed (not using PAYE) cannot apply for the Cycle To Work Scheme.
How long does it take to get a Cycle to Work voucher?
Receiving a Cycle To Work voucher is usually fast, taking from 5-14 days until you can pick up your bike and accessories and begin using it. Sometimes it can be almost immediate!
However, occasionally it will take longer for your voucher to be approved. Such a situation can occur when your employer delays payment for equipment, or delays revising your application. It can also happen if your employer runs their scheme on a window basis. That is, employees will only be granted your eCertificates at the end of that specified window.
The good news is that you can check your eCertificate status at MyCyclescheme. Employees are also encouraged to speak to their employer about delays, as this can help to expedite the process.
What happens if I leave my job with my Cycle to Work Scheme?
If you leave your current employment, an employee will usually have the option to purchase the bike. Although this is dependent on the employer, permitting them to do so. The reason is that the employer will still hold ownership of the bike as payments are being made.
However, most employers will allow their employees to purchase the bike from them before leaving, either outright or by arranging monthly payments over a more extended period. The latter being a situation where it is vital to draw up a contract between both parties.
Can I spend more than £1000 on the Cycle to Work Scheme?
Historically the Cycle to Work Scheme maximum spending amount was £1,000. However, this is no longer the case. What this means is all types of accessories and bikes, such as e-bikes, can now be included in the scheme.
Although, employees should bear in mind that employers still set their limits with the scheme. The good news is that the vast majority of employers are choosing to use the no-limit option.
Where can I use my Cycle to Work voucher?
You can use your Cycle to Work voucher both online and in physical stores—the only requirement being that the store like rutlandcycling.com is one of the 2000 participating retailers.
In some cases, retailers will be able to hand over or ship your bike and accessories immediately. Something that means you can begin getting more exercise, saving the planet, and riding to work the very next day!