Cycle-to-Work salary sacrifice scheme
The UK government currently runs the ‘Cycle-to-Work salary sacrifice scheme’. A money saving initiative aimed at employees who want to commute to work, this scheme encourages them to make healthier and more environmentally friendly lifestyle choices.
It allows employees to spend on bikes and equipment, tax-free, making a claimed saving of up to 42% on the overall value depending which income tax bracket you are in (higher rate earners save more).
The Cycle-to-Work scheme lets you buy a bike and equipment through your employer and pay it off over the next year in monthly, interest free, instalments.
What are the benefits of a Cycle-to-Work salary sacrifice scheme for an employee?
Salary Sacrifice enables employees to sacrifice some of their gross salary in order to receive the benefit of riding an electric bike. As the sacrifice is executed before tax and National Insurance contributions are applied, employees effectively save costs in the acquisition of their new eBike in a similar way that other savings such as childcare or gym membership operate.
Eligibility for salary sacrifice is dependent on company policy. If an employer offers a salary sacrifice scheme, it’s available to employees with a permanent contract.
Employees can learn more about eligibility from their employers HR department.
What are the benefits of a salary sacrifice scheme for an employer?
A salary sacrifice scheme allows employers to offer employees a new electric bike at a lower cost with a tax-efficient payment method (link below). Additionally, the company may also benefit from reduced National Insurance contribution payments. Salary sacrifice schemes are HMRC and VAT compliant.
The scheme does not include people who are self-employed.
Cycle-to-Work Scheme guidance for employers
Grant and Incentive programs are offered and administered by government agencies. Eligibility and availability vary and are outside of Spoke and Motors control.
Get in touch with us for more information or help with your application.