On your bike – tax free cycling

Source: HM Revenue & Customs | | 15/01/2020

There are special rules involving bicycles for work use, usually referred to as 'Cycle to Work' arrangements. The Cycle to Work scheme was introduced almost 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly mode of transport.

The scheme allows employers to provide bicycles and cyclists’ safety equipment to employees as a tax-free benefit. The scheme was recently extended to include the use of electronic bikes known as e-bikes. The scheme must be offered to all employees and the bike must be used for qualifying journeys (but pleasure use is also allowed). Where the scheme conditions are satisfied, employees can benefit from a tax and National Insurance Contributions (NICs) reduction of between 32% and 42% through a salary sacrifice scheme. In addition, there is no employer liability to NICs.

The cycle to work benefits only relate to the loan period. However, it is commonplace for an employer or a third party bicycle provider to offer the employee the bicycle / equipment they have been using for sale after the loan period has ended. The bike may be offered to the employee for sale at a fair market value, but this must be done as a separate agreement.

Employers of all sizes across the public, private and voluntary sectors are eligible to take part in the scheme to provide (technically loan) bicycles and cyclists’ safety equipment to employees as a tax-free benefit. If you are interested in hearing more about the benefits of this scheme, please let us know.



Contact Us

Ledger Sparks
Airport House, Suite 43-45
Purley Way
Croydon
CR0 0XZ

Tel: 020 3985 6000
Fax: 020 8781 1889

E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Follow Us

  twit-new   twit-new

Online logins

 

Membership

  

  

Latest News

Employer toolkit for EU Settlement Scheme published
20/02/2020 - More...Following Brexit, the government has...
Change to the off-payroll working rules
20/02/2020 - More...As part of a review into changes to the...
Could you claim the marriage allowance?
19/02/2020 - More...If you are entitled to the marriage...