The Cycle to Work Scheme is an incentive scheme offered by the Government which allows an employer to provide a bicycle to an employee without a benefit in kind being assessed.
Normally, it will be combined with a salary sacrifice scheme, whereby the employee reduces his gross salary and effectively pays for the rental of the bike, out of his gross salary before ultimately owning the bike.
The scheme comes with a number of conditions including:
- It must be offered to all employees.
- The majority of journeys the bike is used for, should be commuting to work.
- Ownership of the bicycle stays with the employer in the first instance who is renting it to the employee. It will normally be the case that the cycle is purchased by the employee later, at a depreciated value.
- HMRC provide agreed, depreciated value figures for the acquisition of the bike by the employee from the employer, with values falling to 18%/25% after one year and reducing to 0% after 5/6 years.
Further employer guidance and options on setting up a cycle to work scheme can be found on the gov.uk website Cycle to Work Scheme
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The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.