WE NOW ACCEPT CYCLESCHEME, WORKRIDERS AND HALFORDS VOUCHERS!!
Tax-free bikes for work
Did you know that a Government scheme exists that can save you around 32% off the cost of a new bike?*
Greenwheel Cycles are proud to be a partner store for the UK’s number one provider of tax-free bikes for the Government’s Cycle to Work Initiative – Cyclescheme. Cyclescheme offers the most admin-friendly scheme for employers and the greatest choice of bikes and equipment for employees.
We strongly believe that cycling is the way forward, not only to keep body and mind fit and healthy but to work towards a brighter future for our environment.
Peterborough is currently the Environment Capital of the UK and here at Greenwheel Cycles we would like to see this continue for many years to come. So please help us achieve our goal by joining up to the Cyclescheme today and save yourself up to 32% on a new bike:
Benefits to the employer:
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Benefits to the employee:
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What’s the process of getting a tax free bike for work through the Cyclescheme?
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Please note that although the above procedure applies to the vast majority of schemes, there are some variations to the above which are a result of the way an employer’s scheme is set up., such as if they are using a finance company or a benefits provider.
FAQs:
Q. Who can participate in the scheme?A. Any size employer from any sector can partner with Cyclescheme. Eligible employees must receive salary via the PAYE system, and earnings should be more than the National Minimum Wage after salary sacrifice. Employers who pay staff close to the National Minimum Wage should contact Cyclesheme to discuss the range of attractive options that allow lower paid employees to participate in, and benefit from the scheme. There is no credit check for employees wishing to participate, and under 18′s can join the scheme if a guardian signs a guarantor agreement. |
Q. What is salary sacrifice and how do participants save?A. Salary sacrifice occurs when an employee agrees to give up part of their salary for an agreed period (in the case of the Cycle to Work scheme this is usually 12 months) in exchange for some kind of non cash benefit, such as the loan of a bicycle and safety equipment. As salary sacrifice is taken from the gross salary (before tax) rather than net pay it means the employee pays less income tax and National Insurance. See www.hmrc.gov.uk/specialist/salary_sacrifice.pdf for a more detailed explanation. |
Q. What are the savings?A. Typical savings are between 32% for basic rate taxpayers and 42% for high rate taxpayers, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme. If the employer uses external finance (i.e. borrows the money to buy the bikes from an outside agent) then savings will be approximately 5% lower. Employers can typically save 13.8% of the total value of salary sacrifice, due to reductions in Employers’ National Insurance Contributions (NICs) due. |
Q. What bikes are available?A. Employees can choose any bike – including electric bikes, folding bikes and other specialist cycles – providing it can be provided by Greenwheel Cycles or one of Cyclescheme’s other partner shops. |
Q. Who actually owns the bike?A. The bike and goods remain the property of the employer throughout the hire period, unless the employer uses a finance company to fund the bikes; in this case the finance company or funding bank will own the bikes. |
Q. Who is responsible for maintaining the bike and what happens if it is stolen?A. It is the employee’s responsibility to maintain the bike. Greenwheel Cycles will be able to advise about maintenance and servicing depending on how the bike is used and we also offer a free first service for all bikes purchased from our store. If the bike is stolen, as long as the employee replaces the bike and continues to use it mainly for commuting purposes, the employer can continue to take the salary sacrifice reductions from GROSS salary. This means the participant can still take advantage of the income tax and National Insurance Contribution (NIC) savings. We strongly recommend that scheme participants insure the bicycle and safety equipment as soon as they collect it. Safety equipment including Home Office-approved ‘Sold Secure’ D-locks and cable locks can be obtained as part of the scheme. |
Q. What’s the best way to insure the bike?A. Most cycle-specific insurance not only provides cover for the cost of theft replacement, but also provides personal and third party medical insurance cover and, in some cases, a roadside recovery service in the event of breakdowns. By insuring the bike, scheme participants can now maintain their savings by avoiding hefty replacement costs in the event of theft, and continue to enjoy the full tax exemption for the rest of the hire period. For further information on cycle-specific insurance please visit Cycleguard on www.cycleguard.co.uk (Cyclesheme participants can obtain a 10% discount on Insurance and Roadside Recovery). |
Q. Does the bike have to be used for commuting?A. Employees should use the bike mainly for commuting to and, if relevant, between work places (at least 50% of the bikes use should be for work purposes). However, the bike can also be used for non-work purposes and there is no need for employers to monitor individual usage or for employees to keep a mileage log. Please note that employees cannot claim business mileage allowance with a bike obtained under the scheme as the bike belongs to the employer. |
Q. What happens at the end of the hire period?A. In order to preserve the tax benefits of the scheme, there can be no guarantee or obligation to transfer ownership to the employee immediately after the hire period has ended. However, employers generally chose to offer this option in addition to others, either directly or via Cyclescheme. At the end of the hire period, Cyclesheme will contact employees to discuss the options available. The most attractive option for employees will be to pay a small, refundable deposit (3% or 7% of the equipment value*) and continue to use the bicycle for an extended period of up to 36 months. At the end of this period, if the employee does not wish to keep the bicycle, then Cyclescheme will refund the deposit in full. Alternatively, Cyclescheme may at its discretion, offer ownership of the bicycle to the employee at this point, and no further action or payment will be required if they wish to keep the bicycle. For more information, please refer to the article ‘HMRC Market Value Clarification’ or click here to watch our website video guide to the end of hire process. *The lower figure is for an equipment value of less than £500 and the higher one for equipment value of £500 or more. These figures include VAT. |
Q. What happens if an employee leaves their job or is made redundant?A. Once signed, the Hire Agreement in non-cancellable following a cooling off period of 7 working days following collection of the goods. This means that if an employee leaves or is made redundant from their employment during the hire period, they are obliged to pay the remaining salary sacrifice amount in full from net pay i.e. without tax exemptions. If applicable, the employee may then be offered ownership of the equipment in the normal way (please refer to ‘What happens at the end of the hire period?’ above). For more information please see the Department for Transport’s Cycle to Work implementation guide: www.dft.gov.uk/pgr/sustainable/cycling/cycletoworkguidance *actual savings depend on your personal circumstances and tax rate |
