CYCLE TO WORK SCHEME

Stewart Wilson Cycles is an official Cyclescheme Authorised Dealer

Cyclescheme is the UK's number one provider of tax-free bikes for the Government's Cycle to Work initiative. It's a brilliant programme where everyone wins - employees make big savings on new bikes, and employers get a healthier workforce and save money too! Cyclescheme has a great track record in helping employers of all sizes to set up and run successful Cycle to Work schemes.

Who can get a bike? Employees paying PAYE, who have a contract that outlasts the duration of the salary sacrifice period are eligible, provided they are over 18 years old, earn more than the National Minimum Wage after the loan repayment has been deducted, and completed the employer's probationary period (if applicable).

What is salary sacrifice and how are savings made? With a salary sacrifice you pay back the loan on your bike, accessories and safety equipment from gross rather than net pay for the hire period (usually 12 months), allowing you to benefit from income tax and NI relief. See hmrc.gov for a more detailed explanation.

How much can I save? Typical savings are between 30% and 50%, but the actual amount you pay depends on your personal tax band, and the way your company runs the scheme. Higher rate taxpayers will save more, employees whose company cannot reclaim VAT (the NHS, for example) will save less. If the employer uses external finance (i.e your employer borrows the money to buy the bike from an outside source) then savings are normally about 5% lower. Finally, the fair market value payment needs to be taken into account when calculating the total savings.

Can I get any bike? You can choose any bike, including electric bikes, providing Abbey Cycles can supply it. If your employer wants to supply bikes costing over £1000 (retail including VAT) then they will need a Consumer Credit Licence, and this costs £725, so many employers limit the package value to £1000.

What's the process of getting a tax free bike for work through Cyclescheme? The scheme uses a voucher system. Once your employer has entered into a contract with Cyclescheme, you need to sign an employee hire agreement that Cyclescheme supply. You visit Stewart Wilson Cycles for a quote on a bike and accessories, which you enter onto the Cyclescheme extranet system. When Cyclescheme receive the quote they will invoice your company and provide a secure voucher once the hire agreement is signed. You take the voucher back to Stewart Wilson Cycles to collect the bike.

Do I have to use the bike for work? You can use the bike however you like; a bike purchased under Cyclescheme should be used for work journeys at least 50% of the time. You don't have to cycle to work for a specified number of days throughout the year and you don't have to record your trips or mileage. You may not claim expenses for business trips made using the bike.

What happens if I leave my job or I'm made redundant? The agreement to pay your loan is non-cancellable, you will be obliged to pay the remaining amount in full, without any tax exemptions. If you opt to take ownership of the bike you may have to pay an increased fair market value.

For more info see http://www.cyclescheme.co.uk
  
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