Get on your bike for tax relief benefits

Industry News - 24th October 2023

The Cycle to Work scheme was introduced over 20 years ago by the government to help promote the use of environmentally friendly modes of transport.

The scheme allows employers to loan bikes and cyclist safety equipment to their employees as a tax-free benefit. Employers of all sizes across the public, private and voluntary sectors are eligible to take part in the scheme, however the tax and National Insurance benefits only apply to staff who are treated as employees for tax purposes.

The programme offers tax relief benefits to both the employer and the employee, however certain conditions must be met, such as:

•  The scheme must be available to all employees

•  The cycle must be used at least 50% of the time for work related journeys

•  The loan period of the bike or equipment must last for at least 12 months

•  The employee will not own the bike during the loan period agreement.

Where the scheme conditions are satisfied, employees can benefit from significant tax and National Insurance Contributions (NICs) reduction. In addition, there is no employer liability to NICs.

At the end of the hire period, the employee may have the option to buy the bike or equipment, however this must be done as a separate agreement.

As an employer, you can set up your own salary sacrifice scheme or there are many third party providers who will run this scheme for you. Contact us for more information.

Internet link: GOV.UK

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