What is it?
The Cycle to Work Scheme is a government initiative that was introduced through the 1999 Finance Act to help promote healthier journeys to work as well as aiding the reduction of environmental pollution. This is all part of the Government's 'Green Transport Plan'.
How does it work?
The scheme allows employees to purchase bikes from their gross salary (i.e pre-tax) thus meaning that savings of around 40% can be made. Your bike is in essence tax free! The savings made vary slightly depending on whether or not you are a high rate tax payer, however, the higher the rate of tax that you pay the more that you save.
Simple Set Up, Lots of BenefitsThe Cycle to Work Scheme is very simple for companies to set up and offer to their employees and effectively works through salary sacrifice normally over a twelve month period. This benefits the employee as they are paying for their tax free bike over the space of a year and the company benefits by providing a very useful and popular employee benefit, as well as saving on National Insurance contributions. Additionally the environment benefits, the employee's fitness improves and subsequently absenteeism hopefully reduces. It's a win-win for everyone!