You can get essentially any bike through Cyclescheme. It can be any brand, and you can be anywhere in the country. There are over 2,000 Cyclescheme retailers nationwide, and you can order in store, online, or through click-and-collect or brand direct services.
How you get your bike is up to you. You might draw up a shopping list with a Cyclescheme retailer, then request a certificate to spend with them for that amount. Or you can decide later, applying for a certificate of a certain value, then choosing where and how to spend it. Once you know how much you want to spend, you can make your application.
How much can you spend? That depends…
The £1,000 limit
The limit is normally £1,000, including VAT. That can be for a bike, cycling equipment, or a combination of both. You can even get two bikes – to use at each end of a train journey, for example – so long as they don’t total more than £1,000. The limit is ordinarily set at £1,000 because the Office of Fair Trading has decreed that’s the maximum allowed under the Cycle to Work Group Credit Licence, which the majority of employers operate under.
This limit is for the salary sacrifice period, which is usually 12 months. If you had one certificate for £1000, you could spend £600 on one bike and £400 on another (since the total wouldn’t exceed £1,000). You would need to get both bikes from the same retailer though.
Once you’ve finished making salary sacrifice payments, you can have a second (or third or fourth…) bite of the cherry. So you might get a bike worth up to £1,000 in year one, equipment worth the same in year two, and another bike in year three.
Going over £1,000
What if the bike you’ve got your eye on costs more than £1,000? This is a particular issue with electric bikes, where prices are higher due to the addition of the motor, battery, and controls. But plenty of conventional bikes cost more than £1,000; it would be easy to spend more than a grand on a commuting stalwart like the Brompton folder.
Lowering your expectations and choosing a cheaper bike isn’t the only option. Most Cyclescheme-registered employers will allow you to top up your certificate by paying the difference. If it’s a bike worth £1,500, for example, you’d pay £500 straight away, then make salary sacrifice payments for the remaining £1,000. You wouldn’t make any savings on the initial £500, but you’d still make the normal Cyclescheme savings on the remaining £1,000. If you were a standard rate taxpayer, you could expect to save £250 through the reduction in your income tax and national insurance payments. So the £1,500 bike would end up costing you £1,250 – a handsome saving. And don’t forget that the bulk of the cost would be spread over 12 months too.
It’s worth noting that a small number of employers don’t allow top-up payments. Before you set your heart on that £1,500 bike, check with your employer or contact Cyclescheme.
Conversely, some employers may offer salary sacrifice limits higher than £1,000, enabling you to get that £1,500 bike without a top-up payment – and to make savings on the entire amount. To do this, they need authorisation from the FCA (Financial Conduct Authority). Employers with FCA authorisation include banks, businesses that offer consumers credit terms, and local authorities (i.e. councils). These employers can set whatever upper limit they wish, although figures from £1,500 to £3,500 are typical. Good news for would-be e-bike commuters!
While the vast majority of employers will set a limit of £1,000 for Cycle to Work packages – since that’s the maximum normally allowed – they are free to impose a lower limit, such as £500. Whether the limit is £1,000 or £500, you’re not obliged to spend up to it. You could get a bike costing only £300, for example. There’s no minimum value for a Cyclescheme certificate.
For some employees on lower salaries, the maximum value of their certificate may be less than £1,000, even if that amount is available to other employees. That’s because salary sacrifice payments cannot reduce anyone’s salary to less than the National Minimum Wage (NMW). They must still be earning at least the NMW after Cycle to Work deductions.
For example, if you earn 11 pence more per hour than the NMW and work 37 hours a week, you could get a Cyclescheme certificate for just over £210 (11 pence times 37 hours times 52 weeks is £211.64). That assumes a one-year salary sacrifice period. Employers can help low earners participate in the scheme – and get higher value packages – by extending the salary sacrifice period to two or even three years. A three-year period would enable an employee earning 11p more than the NMW to get a certificate worth over £600.
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