The Cycle to Work Scheme

Pedal Power: Why the Cycle to Work Scheme Is a Win-Win for Everyone

Since its launch in 1999, the Cycle to Work scheme has been quietly revolutionising the daily commute, turning traffic jams into bike lanes and sedentary routines into energising rides. It’s not just about swapping four wheels for two; it’s about embracing a healthier lifestyle, reducing carbon footprints, and unlocking real financial benefits for both employees and employers.

What Is the Cycle to Work Scheme?

At its core, the scheme allows employers to provide bicycles and cycling safety gear to employees as a tax-free benefit. Open to organisations of all sizes across the public, private, and voluntary sectors, it’s a simple yet powerful way to promote sustainable travel.

How Does It Work?

Employers purchase the bike and lend it to the employee, who repays the cost through salary sacrifice, a smart arrangement that reduces the employee’s gross pay and, in turn, lowers their Income Tax and National Insurance Contributions (NICs). Employers also save on NICs, making it a financial win on both sides.

E-Bikes Included?

Yes, electric bikes (e-bikes) are covered too! As long as they meet eligibility criteria, employees can enjoy the boost of pedal-assist technology while still reaping the scheme’s benefits.

What Counts as a Qualifying Journey?

To qualify for the tax exemption, the bike must be used mainly for commuting between home and work. But don’t worry - personal use is allowed, as long as it’s incidental. So those weekend rides through the countryside? Totally fine.

What Happens After the Loan Period?

Ownership of the bike remains with the employer or a third-party provider during the loan. Once the hire period ends, employees may be offered the chance to purchase the bike at fair market value, but this must be done under a separate agreement to preserve the tax advantages 

Easy to Manage, Easy to Cancel

The scheme is designed with flexibility in mind. Employees can cancel their agreement if needed, and there are clear processes for returning equipment and adjusting salary deductions.

If you need tax advice, give our expert and friendly team a call on 01380 723692 or email us here.