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Cyclescheme FAQs

Who are Cyclescheme?

Cyclescheme is an independent company created to help employers and employees make the most of the Government's Green Transport Plan Initiative. We use our industry experience to get you the bike you want from a local bike shop. We are independent and can supply the right package of bike, accessories and safety equipment for everyone.

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 have 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 www.hmrc.gov.uk/specialist/salary_sacrifice.pdf 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 (ie your employer borrows the money to buy the bikes from an outside) 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 your chosen Cyclescheme partner can supply it. Some bike shops may add an administration fee to quotes for custom bikes, because the profit margins are lower than those available on standard, mass-produced models. If your employer wants to supply bikes costing over £1000 (retail price including VAT) then they will need a Consumer Credit Licence, and this costs £725, so many employers limit the package value to £1000.

Who actually owns the bike? What happens if it is stolen?

The bike and goods remain the property of your employer until the hire period finishes, unless your employer uses finance; in this case the finance company will own the bikes during the hire period. At the end of the hire period you may be given the opportunity to buy the bike for a fair market value payment. If the bike gets stolen you will be liable for any outstanding monies, so it's very important to make sure the bike is insured. You can obtain safety equipment, including Home Office-approved 'Sold Secure' D-locks and cable locks, as part of the scheme.

What happens at the end of the loan period?

Most employers opt to sell you the bike and accessories, and you will pay the fair market value; this is the amount that a buyer would pay to a seller to purchase the bike and equipment. Each bike is assessed separately, but in our experience the market shows values to be around 5% of the original voucher value plus VAT. The fair market value cannot be stated before or during the scheme as this could be considered a benefit in kind as hire-purchase does not warrant any tax-relief.

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 we supply. You visit your local bike shop for a quote on a bike and accessories, which you enter onto our extranet system. When we receive the quote we will invoice your company, and provide a secure voucher once the hire agreement is signed. You take the voucher back to the bike shop 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's the best way to insure the bike?

Your Household policies are usually the cheapest option but you must ensure that the insurer covers the bike when in storage away from your home, and that the bike's value doesn't exceed the upper claim limit. If the bike can't be covered on your home insurance, we recommend Cycleguard (02476 851 000) for insurance, and the free services provided by Fetch (0870 460 8167) who will expedite your claim and ensure that you are able to replace your bike using the bike shop of your choice.

Can I get a bike via a mail order specialist?

Cyclescheme's partner shops are capable of supplying bike packages mail order from their shops, but there are distinct advantages when getting a bike from your local bike shop that will be the first port of call for advice, servicing, after sales and warranty. Some mail-order specialists are not part of the Cyclescheme Partner network.

Am I responsible for maintaining the bike?

Yes. Your partner shop will be able to advise you about necessary servicing depending on how you use your bike. Many shops offer a free first service.

What happens if I leave my job or I'm made redundant?

The agreement to pay your loan is non-cancellable, so 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.

Is there a credit check?

There is no credit check

Cyclescheme Ltd, PO BOX 3809, Bath BA1 1WX. 01225 448933

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