Cycle to Work Scheme
The most cost effective entry to cycling
What is Cycle to Work?
The Cycle To Work scheme is a UK Government initiative to encourage more of us to… you guessed it, cycle to work. The main aims are to improve employee fitness and wellbeing, along with reducing environmental pollution.
Why choose Cycle to Work?
It’s a very cost effective way for you to buy a shiny new bike. The scheme is a tax-free employee incentive that operates using a salary sacrifice model.
How does it work?
Your employer effectively leases the bike to you, via a salary sacrifice model, meaning payments are subtracted from your gross salary, pre-tax & NI, therefore the impact on your net salary is reduced. For example…
|Total cost of bicycle & accessories||£1,000|
|Income Tax saving over hire period||£200|
|Employee NI saving over hire period||£120|
|Final cost of bike & accessories||£680|
|Gross salary sacrifice, based on 12 month hire period||£83.33|
|Net salary sacrifice, based on 12 month hire period||£56.67|
|Percentage saving over RRP||32%|
In simple terms, although you’ll be paying £83.33 from your gross salary, you’re effectively only paying £56.67 from your net salary, saving you:
(£83.33 – £56.67) x 12 = £319.92 saved!
Although it’s your employer leasing the bike to you, the schemes are administered by a third party, who liaises between your employer and the bike shop, to take care of paperwork and funding transfers.
There are a number of third party administrators, but the vast majority of transactions are completed by a few key companies. Griff’s process applications from the following key providers:
Contact your HR rep to find out if your employer participates in the scheme.