An Explanation of the Cycle to Work Scheme

The Cycle to Work Scheme in the UK allows companies to facilitate their employees in leasing and using bicycles for their daily commutes. In an era where work-related perks and a positive company culture hold increasing significance, these programs can significantly enhance your workforce’s well-being.

Depending on the industry and individual circumstances, certain employees may find the scheme particularly enticing. In this article, we’ll provide you with essential insights to consider before implementing and discussing the program with your team.

Workplace benefits can be a decisive factor for both current employees and potential hires. If you’re facing challenges in attracting the right talent or retaining your existing workforce, our expertise can provide the support you need

What is the Cycle to Work scheme in the UK?

This is a bicycle hire work benefit that offers a tax relief incentive from the government. Sometimes employers refer to it more colloquially as the Bike to Work scheme UK. The Government introduced this tax exemption initiative in the Finance Act 1999. The UK Cycle to Work scheme gives employees the opportunity to hire bikes from their employer or a third party.

Encourage employees

Promoting the adoption of eco-friendly commuting options among your employees is not only a proactive step toward reducing the organization's carbon footprint but also a powerful way to foster a more environmentally conscious workforce.

Financial Incentive

One effective way to encourage employees to participate in the Cycle to Work Scheme is by offering a financial incentive. Under this scheme, employees can hire bicycles. This not only makes it a tax-efficient option for your employees but also serves as a valuable financial perk.

Encourage a Healthy Lifestyle

Promoting a healthy lifestyle among your commuting employees goes beyond just reducing environmental impact; it's about fostering a culture of well-being and vitality. Encouraging employees to incorporate exercise into their daily commute.

Cycle to Work scheme rules

The programme gives the opportunity to both the employer and the employee to benefit from tax relief. However, they need to meet certain criteria for it to work.

The main points as outlined by the government include the following:

  • The employee needs to follow through with the salary sacrifice agreement for at least 12 months, typically.
  • The employee’s take home pay cannot fall below the National Minimum Wage after the deduction.
  • They will not, at any point during the period of the hire agreement, own the bicycle. They can, however, offer to buy it at the end of the hire period.
  • They need to use the cycle at least 50% of the time for work related journeys.
  • The employee cannot pay for the cost of the cycle or equipment with their own money.
  • The employer needs to offer access to the scheme to all staff members.