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Setting Up A Cycle-to-Work Scheme

By Laura Black

Through the right perks, an employer can vastly improve productivity, morale, and staff retention. Anything that makes employees healthier and happier, and that costs very little to implement, is likely to qualify. Given its numerous benefits on employee health and wellbeing, both physical and mental, it’s no surprise that government-backed cycle-to-work schemes are growing in popularity.

What is a cycle-to-work scheme?

The government has a natural interest in encouraging people to cycle. This form of exercise reduces congestion and improves health, which in turn lessens the long-term burden on the health service. 

Partly for this reason, the 1999 Finance Act created a tax exemption for employers willing to invest in cycling equipment. Employees wishing to cycle to work can obtain the required vehicle and the accompanying equipment from their employer, rather than buying it directly. The result? A significantly lowered cost of entry into the hobby.

Qualifying criteria and salary sacrifice

In order to qualify for this scheme, your business will need to meet a few criteria.

Firstly, it will need to be available to everyone who works for your business. Second, you aren’t allowed to sell the bikes to your employees – they must remain property of the business. Finally, the bikes must be used, at least in part, for actually cycling to and from work, and for other business uses. 

The bicycles are often offered at no up-front cost. They’re ultimately paid for via a long-term ‘salary sacrifice’. This means that wages are docked until the cost of the bike is covered. The repayment term can be anything from twelve to eighteen months.

Continuing the arrangement

Salary sacrifice doesn’t necessarily mean owning the bike outright – though the employee will often have the option to do so at the end of the period. Loans and other arrangements might be arrived at, provided that the employee in question agrees to them.

Of course, there are other ways to incentivise this form of travel. Providing a secure place to store bikes, and to shower and change on your business’s premises, can be enormously valuable. A few sheets of plywood and some modest carpentry skills might be enough to fashion a cost-effective outdoor bike shed.

Benefits

It’s worth reflecting on why this scheme might be attractive for both employee and employer. The former will get a cheap bike, and access to an enjoyable hobby. They’ll enjoy superior fitness, and they’ll save money on fuel and other commuting costs. Employers might benefit from healthier, and more productive employees, as well as a much less crowded car park.


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