Commuting to work can be a pain. If you’re not stuck in traffic jam after traffic jam, chances are you’re waiting on busy station platforms for delayed trains. But there is an alternative.
Many commuters have ditched cars, buses and trains in exchange for a bike to get to work. In fact, an increasing number of workers opt for a healthier way to get to the office, thanks to the Cycle to Work scheme. Find out everything about the scheme, and how cycling to work benefits you.
History of the Cycle to Work scheme
As part of the Government’s Green Transport Plan, the Cycle to Work scheme was established as part of the 1999 Finance Act to reduce pollution to the environment and endorse healthier journeys to work. It was introduced as an annual tax exemption, allowing employers to loan bikes and equipment to their employees, tax free. The idea was to encourage people to cycle to work, and that employers would benefit from having healthier employees.
How does the Cycle to Work scheme work?
Put simply, the Cycle to Work scheme lets you save money on buying a bike and any cycling accessories. The scheme lets you spend up to £1,000, and pay for it in monthly instalments. Agree on how long the instalments will last – normally it will be for 12 months. The instalments are completely tax free, and are made from your gross salary rather than net – saving you money in the long run. The Cycle to Work scheme works as follows:
- 1. Your employer registers with a Cycle to Work scheme provider.
- 2. You choose the bike and any accessories you would like, up to £1,000.
- 3. Your employer pays for the bike and accessories.
- 4. You pay for the bike in monthly instalments through your salary sacrifice.
After 12 months, or however long you agreed, you have the option to extend the agreement or buy the bike from your employer for its Fair Market Value from HM Revenue & Customs.
Is anyone eligible for the Cycle to Work scheme?
To benefit from the scheme, your employer has to sign up with a Cycle to Work scheme provider. Employers of any size – public, private and voluntary can take part. As long as you’re over the age of 18 and taking part in the scheme wouldn’t drop your salary below minimum wage, you are eligible. If you’re self-employed, you should seek specialist tax advice to see if you can take part.
Cycle to Work benefits
There are so many benefits of the Cycle to Work scheme. From financial to health, Cycle to Work can do a lot of good in a lot of ways. Is the Cycle to Work scheme worth it? Consider the following:
- • Save money on a bike: by opting into the Cycle to Work scheme, you can save a significant amount of money buying a new bike, without having to pay tax. And the monthly instalments mean no initial up-front cost.
- • Save money commuting: with petrol prices and rail fares going up every year, any way you can save money on commuting is a bonus.
- • Get fit: cycling to work is a great way to exercise and increase your fitness levels. Often, workers spend so much time sat at their desk or sat on a commute, that they don’t get the chance to exercise.
- • Burn calories: cycling helps to raise your metabolic rate, letting you burn more calories than you would normally.
- • Environment: the effect bikes have on the environment is significantly lower than the impact cars have.
Did you know that the Cycle to Work scheme also covers electric bikes? Commuting to work on an eBike gives you all the benefits of saving money, and is ideal for anyone starting out cycling to work. Find out more about eBikes and their benefits.