Great news for all employers wishing to offer a higher limit on their cycle to work scheme!
The Department for Transport's (DfT) guidance has always stated that employers can loan cycle to work packages worth up to £1,000 to their employees due to the Government's blanket consumer credit licence.
The recent Government update:
In June, we told you that updated guidance for cycle to work schemes had been released. The main purpose of the update was to lift the existing £1,000 purchase price cap, meaning even more people would become regular cyclists and could afford higher-priced items like e-bikes.
As a founding member of the Cycle to Work Alliance (C2WA), we’ve been working towards an update like this for two years, in partnership with the Department for Transport (DfT), Financial Conduct Authority (FCA), and other members of the C2WA.
However, the specific guidance that’s been produced contains some ambiguous wording, making it difficult to act on under existing legislation. The key things you need to know:
- Cyclescheme will not implement the new guidance until these ambiguities have resolved
- Cyclescheme is consulting with external lawyers to ensure that our interpretation of the guidance is correct
- In the meantime, our current scheme will continue to run and remains fully compliant, so neither you nor your employees need to do anything differently.
Although we've not yet made timescales publically available, we're pleased to note that an updated delivery timeline will be released soon. We know the delay may well be disappointing for you and your employees and can assure you that no one is keener to implement the new version of the scheme than us. We’re working hard to achieve the change we all want as quickly as possible.
If you would like more information on joining our new 'Freedom to ride' scheme, please register your interest.
If you're yet to join the scheme, sign up here and then drop us a line to discuss over £1,000 schemes.
What is the timeline for being able to implement the new 'Freedom to ride' scheme?
- Cyclescheme is honouring the Cycle to Work Alliance's (C2WA) recommendation not to implement the scheme until the ambiguous wording has been clarified by the DfT and FCA. This means we cannot offer a definitive timeline. However, there is an entire team of people working furiously to resolve all ambiguities and ensure that we can implement the new scheme in a compliant way that is in our clients best interests.
- If you're already a Cyclescheme customer and want to roll out our 'Freedom to ride' (no limit) scheme, please register your interest via this form and we'll keep you updated. If you're not yet a Cyclescheme customer, we recommend you register for our service here (we'll then be in touch as soon as we have an update).
- Cyclescheme can't comment on what other providers can or cannot offer. We are following the guidance of the C2WA due to the current ambiguities (that are yet to be resolved) from the recent guidance update, and shall do so until satisfied the cycle to work industry can offer client employers a consistent and robust scheme. To be specific, Cyclescheme’s current position is that employers who engage with a third-party Scheme Provider to operate a 'higher limit' scheme are likely to be acting as a Credit Broker, requiring specific permissions and agreements to be in place. Cyclescheme is seeking further clarity on this point with a view to delivering a compliant solution for offering higher limit schemes that requires minimum administration and maximum peace of mind for our clients.
Should I hold off requesting my bike?
We would recommend considering the following factors before deciding this; how much is the cycle to work package you want to get, what is your employers current limit and what will you do if your employer does not choose to update their limit. If you wish to get a package that is within your employers limit - then there's absolutely no reason to delay making your request. If however, your desired package is more than your employers present limit you'll just need to decide how urgently you would like to get a package. If you are not willing to wait, you may wish to get a package within your employers present limit. If you are willing to wait, then please be assured that Cyclescheme hopes to have a compliant solution for your employer to roll out the new scheme shortly. Please do bear in mind also that employers are under no obligation to offer schemes over £1,000 so do consult them too.
The main change is that you can no longer add funds (or 'top up'). As such, you may need to carefully consider what you would like to get as part of your package. Other than that, there are no changes that should affect you.
Can I still add funds (or 'top up')?
No. To improve clarity on this topic and ensure there is no shared ownership, the DfT recently confirmed in their guidance update that adding funds is no longer allowable. If you wish to get a bike that is more expensive than your employers present limit, Cyclescheme will be able to facilitate this for your employer shortly via the new 'Freedom to ride' scheme.
Has the new guidance changed what accessories are allowable?
- Great news, the new guidance broadened allowed accessories. You can now get parts as well as clothing and accessories. The only cycle to work scheme exceptions are GPS ride trackers & navigation devices, bike racks for cars, cameras, turbo trainers or rollers, gift cards, nutricational products or foodstuffs.
Employers with their own FCA Authorisation:
Setting up a cycle to work scheme over £1,000