Cycle Scheme through Ken Foster's Cycles
What is it?
Cyclescheme is the UK's number one provider of tax-free bikes for the Government's Cycle to Work initiative. Employees can make big savings on new bikes, employers get a healthier workforce and save money too! Our online system is simple to use, and we have a vast supplier network of over 1,500 independent bike shops.What are the savings?
Typical savings are between 25% and 40%, but the actual amount depends on the employee's personal tax band and the way the employer runs their scheme. Higher rate taxpayers will save more, employees whose company cannot reclaim VAT (the NHS, for example) will save less. 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.What's the process of getting a tax free bike for work through Cyclescheme?
Once an employer has entered into a contract with Cyclescheme (employers can sign up via this website) any employees wishing to participate need to visit a Cyclescheme Partner Shop to choose the bike and, if required, safety equipment.Employees then apply for a Cyclescheme Voucher by finding out their Cyclescheme Employer Code and entering the information provided by the bike shop online. The employee will usually sign an online Hire Agreement at this time.
If the employer approves their application they will countersign the Hire Agreement and pay Cyclescheme for the full retail price of the bike and equipment.
Cyclescheme will then issue a Voucher to either the employee or the employer, wherever is requested.
The Voucher is then redeemed in the bike shop and exchanged for the bike package. Salary sacrifice then commences over the hire period (usually 12 months).
End of hire period
At the end of the hire period ownership of the equipment passes to Cyclesheme. The employees then have a choose of one of the following:- Under a separate agreement with the Cyclesheme, pay a small refundable deposit (3% or 7% of the certificate value*) and continue to use the bicycle for 3 years. These monthly payments are zero. At the end of this period, Cyclescheme fully refund the deposit if the employee does not wish to keep the bicycle. No further action or payment is required if they wish to keep the bicycle.
- Take ownership of the bicycle by paying Cyclescheme a much higher valuation (e.g. for a one year old bicycle this would be 18% or 25% of the certificate vale in accordance with HMRC requirements).
- Return the bicycle to Cyclesheme?
* The owner figure is for a certificate value less than £500.00 and the higher one for a certificate value of £500.00 or more. These figures include VAT.
