Cycle to Work Scheme

I guess not many people actually take the time to think about or look into a scheme that can benefit the employee by getting to work in a healthy, timely and cost-effective way. I’ve been looking into the Cycle to Work Scheme (the ‘Scheme’) lately for the above reasons and with the London transport system being what it is (sometimes unreliable) one needs to make sure to have a backup system in place.

So how does it work? Well let me give you the bullet points:

  • Choose a package (one that suits your commute to work), a bike and an accessory package, and submit your application;
  • The Scheme enables employees to get a bike tax-free, saving between 25–42%;
  • Employers also enjoy National Insurance savings of up to 13.8%;
  • Participants can choose from over 2,100 retailers nationwide and enjoy the ability to shop in-store or online;
  • The Scheme is simple to set up, and managing it requires only a few clicks per request;
  • Employees who get a bike through the Scheme, don’t pay VAT, PAYE or NI on the total cost;
  • Bragging rights as now when an employee cycles to work he/she helps to reduce the carbon emissions footprint (based on an average employee cycling an additional 5 miles to work and back weekly rather than going by train).

Note that there is some complication with regard to VAT and the Scheme; see here for more information

“So what are the benefits overall you ask?” Well let me bring you up to speed then.
The cycle scheme can help your company and its employees to save money, be healthier and more productive at work, and to reduce your environmental impact.

Generally, when the Hire Agreement and salary sacrifice ends, you can keep your bike by making a final payment for just a small amount.

See here for more detail in general on the Scheme:


For a typical package under £500, you’ll pay 3% of the original value; for a package over £500, it’s 7% — so a maximum of £70 on a £1,000 package. The bike remains ‘hired’ for a further 36 months, but with no more monthly payments. Ownership can then officially be transferred to you at no extra cost. This method of transferring ownership is why you save a minimum of 25% rather than a minimum of 32%.