Exploring the Benefits of the Cycle-to-Work Scheme?

Mar, 2024

Are you considering the cycle-to-work scheme? This guide will provide you with all the information you need to know, including eligibility requirements and the benefits of offering this scheme. By the end, you’ll be able to determine if the cycle-to-work scheme is the right choice for you.

Understanding the Cycle-to-Work Scheme?

The cycle-to-work scheme is a government initiative that encourages employees to cycle to work by offering tax incentives and savings on the purchase of a bicycle and cycling equipment. This scheme has already benefited over 1.6 million commuters, and more than 40,000 employers across the country have participated in promoting cycling as an affordable and healthy mode of transportation.

Under the scheme, employees can choose a bike and accessories. Previously, the government restricted spending on cycles and equipment to £1,000. However, this regulation has now be changed, eliminating any upper spending limit. However, individual providers may enforce their own guidelines.

This is then deducted from their salary before tax and National Insurance contributions are applied. This can result in significant savings, especially if they choose a high-quality bike. Encouraging active travel like cycling not only saves money but also improves employees’ health and well-being.

How does the cycle-to-work scheme work?

As an employer offering the cycle-to-work scheme, the process is relatively simple. Employees choose a bike and equipment from a participating retailer, and your business purchases it on their behalf. The cost of the bike and equipment is then deducted from their salary over a set period, usually 12 months. The deductions are taken before tax and National Insurance contributions, allowing employees to save money on the cost of the bike. At the end of the salary sacrifice period, you may have the option to purchase the bike at a discounted price. This flexibility ensures that your employees can test out cycling to work and evaluate its benefits before committing to ownership.

Who is eligible for the cycle-to-work scheme?

To be eligible, employees must work for a company that is registered for the scheme. It’s worth noting that the scheme has no minimum or maximum income requirement, making it accessible to anyone. However, eligibility criteria may vary among employers, so it’s best to inform your employees to check with your HR department to see if they qualify.

The Benefits of the Cycle-to-Work Scheme

  • Environmental Impact: Cycling to work significantly reduces carbon emissions and alleviates traffic congestion, contributing to a cleaner, greener environment. By reducing reliance on cars or public transport, employees contribute to lower congestion and improved air quality. This, in turn, creates vibrant and attractive places to live and work, and it aligns sustainability efforts and greener communities.
  • Health and Well-being: Participating in the cycle-to-work scheme promotes physical fitness and mental well-being among employees. Research shows that cycling for just 30 minutes a day can have profound effects on cardiovascular health and overall well-being. By prioritising employee health, you’ll benefit from a happier, healthier, and more productive workforce. Active travel, such as cycling, improves physical fitness as well as wellbeing which can lead to fewer sick days.
  • Financial savings: The cycle-to-work scheme offers significant financial benefits to employees. By purchasing a bike and equipment through your employer, employees can save money on the cost of the bike and make payments through salary deductions, which are taken before tax and National Insurance contributions. The scheme has been proven to save employees up to 32% in income tax and National Insurance contributions. Employees using a bike for daily commuting can save money on transportation costs as well. With rising fuel prices and public transportation fees, cycling to work can be a cost-effective alternative.

At Qtac, we are committed to sustainability and the well-being of our employees. One way we support these values is through the cycle-to-work scheme. By offering this initiative, we aim to foster a greener workplace and promote healthier lifestyles among our team. This initiative not only benefits our employees but also aligns with our sustainability goals for 2024.

For further information on the cycle to work scheme visit the government website at: https://www.gov.uk/government/publications/cycle-to-work-scheme-implementation-guidance.