How does Cyclescheme work?

Looking to learn more about Cycle to Work schemes? Find out just how easy it is to save 25-39% on a new bike with the UK's leading Cycle to Work provider.

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  • How does Cyclescheme Work?

    How does Cyclescheme Work?

    Tax is complicated; Cyclescheme is not. You choose a bike, hire it for an agreed length of time, then snap it up for a fraction of it's original value. It's like a year-round sale, with interest free credit available in over 2,000 retailers nationwide. 

    We’ve worked hard to provide a transparent and easy to understand process. There are just three steps to go through to get a bike for work through Cyclescheme.


    1. Pick Your Package & Apply

    Select a package that suits your needs. 

    Just a bike A bike and accessories Just accessories
    Just a bike A bike and accessories Just accessories

     

    Use our calculator to check how much you can save.

    Once you have a budget in mind use our retailer finder to select a local store or online retailer to shop with. If you want, you can decide on your retailer after you've applied. If you're very price conscious check out our offers.

    Remember, if you’re visiting a retailer they can give you expert one-to-one advice; if you shop online, do your research, check reviews and make sure you get your bike sizing correct. 

    2. Get Your Gear

    This couldn’t be easier. If your employer is signed up with Cyclescheme, they’ll have a unique employer code to use when you apply via cyclescheme.co.uk (our homepage gives you the option to click on 'I'm an employee', once you've done this you can enter your employer code and apply). If your employer isn’t signed up, they can join for free in just a few clicks. You can invite them to join the scheme or point them to our employer registration process.

    When you 'Apply', you’ll be guided through a simple form that asks for your work details (inc. payroll number), contact information, and the value of the Cyclescheme Certificate you’re applying for. If you've agreed to get a your bike and/or accessories from a specific retailer you'll be able to link your request to them, but you can also decide on the retailer you want to use after you've applied by 'Deciding later'.

    Your employer will review your application and pay for your Cyclescheme package. We'll then instantaneously send you an eCertificate which you can exchange for your gear in-store or online. 

    3. Choose an ownership option

    When your Hire Agreement and salary sacrifice ends, you can keep your Cyclescheme package by paying a small ownership fee. There are 3 options, the price of our recommended option 'Own it later' is built into all our marketing communications and calculators and should not come as a surprise.  

    Own it later (recommended option)

    For a Cyclescheme package under £500, you'll pay 3% of the original value; for a package over £500, it's 7% – so a maximum of £70 on a £1,000 package. The bike remains ‘hired’ for a further 36 months, but with no more monthly payments. Ownership can then officially be transferred to you at no extra cost.

    This method of transferring ownership is why you save a minimum of 25% and a maximum of 39% (some may save more due to deals or offers). 

    Own it now 

    The 'Own it now' fee allows you to own the bike straight away, but it costs more. For a Cyclescheme package under £500, you'll pay 18% of the original value; for a package over £500, it's 25% – so a maximum of £250 on a £1,000 package. The bike is officially transferred to you at this point and there are no others costs.

    There is little material benefit to choosing this option and we recommend that all Cycleschemers opt to keep their bikes by choosing the 'Own it later' fee

    Return the bike

    If for any reason you do not want the bike at the end of the Hire Period you can return it to Cyclescheme and incur no additional costs. 

    For a personalised savings figure, visit our calculator and enter your details. 


    Ready to roll? 

    Get started by heading over to the calculator to check your savings or use the Retailer finder to help you decide where you want to shop. Employer not signed up? Invite them.

    Savings calculator Retailer finder Invite employer

  • How are the savings made?

    How are the savings made?

    Cyclescheme operates as a Salary Sacrifice benefit. This means that you agree to give up part of your salary in exchange for a benefit – in this instance a bike and/or accessories.  The Salary Sacrifice is taken from your gross salary (before tax) which means that you will pay less Income Tax and National insurance.

    Below is a Payslip example, which illustrates how the reduction in gross salary results in a reduction in Income Tax and National Insurance payable.

    Below is an example of how savings are made during the Hire Period for basic and higher rate taxpayers on packages hired over a 12-month period.

    To view Cycleschemes savings calculator, which demonstrates what savings you could make during the Hire Period, please visit our 'Shop Now' page.

    At the end of your Hire Period, there is an additional transaction to secure the bike.  To see how this process works, please visit the FAQ section titled "The End of Hire Process" by clicking here.

  • Can I participate in the scheme?

    Can I participate in the scheme?

    To participate in the scheme you must receive your salary via the PAYE (Pay As You Earn) system.

    If you enter into a salary sacrifice arrangement, your new level of earnings must remain above the National Living Wage (NLW)/National Minimum Wage (NMW). If you are paid on or near NLW/NMW, your employer will be able to offer an alternative means of applying to participate in the scheme and you will still be able to benefit through reduced cost of hire.

    For more information please visit our savings calculator HERE and input your salary information to find out the value of Certificate you can apply for. If, according to the calculator, you are unable to apply for a Certificate due to NLW/NMW constraints, please contact your employer or Cyclescheme to find out how you can still benefit from scheme participation.

    It is worth noting that there is no credit check if you wish to participate, and if you are under 18 you can join the scheme if your guardian signs a guarantor agreement.

  • Does the Cyclescheme Package have to be used for commuting?

    Does the Cyclescheme Package have to be used for commuting?

    You should use the bike and/or accessories mainly for commuting to and, if relevant, between work places (at least 50% of the equipment's use should be for work purposes). However, it can also be used for non-work purposes and there is no need for you to keep a log of your journeys.

    Please note that you are unable to claim business mileage allowance when using a bike that is being hired to you by your employer.

  • Who actually owns the Cyclescheme Package?

    Who actually owns the Cyclescheme Package?

    The bike and/or accessories remain the property of the employer throughout the hire period, unless the employer uses a finance company to fund the scheme; in this case the finance company or funding bank will own the equipment.

  • Who is responsible for maintenance of the bike?

    Who is responsible for maintenance of the bike?

    It is your responsibility to maintain the bike you obtain through the scheme. Cyclescheme Retailers will be able to offer specific advice about maintenance and servicing of bikes depending on how they are used and stores offer a free first service (usually 6 weeks after collecting the bike). 

     

  • Should I insure the bike?

    Should I insure the bike?

    Cyclescheme recommends that you insure the bike.  Most cycle-specific insurance not only provides cover for the cost of theft replacement, but also provides personal and third party medical insurance cover and, in some cases, a roadside recovery service in the event of breakdowns.  By insuring the bike, you can maintain your savings by avoiding hefty replacement costs in the event of theft, and continue to enjoy the full tax exemption for the rest of the hire period. 

    Cyclescheme has partnered with Cycleguard to bring you an insurance product that will support you and your bike throughout your Cyclescheme agreement and beyond.

    For further information on cycle-specific insurance please visit Cycleguard on www.cycleguard.co.uk/cs15 (Cyclescheme participants can obtain a fantastic 15% discount on Insurance and Roadside Recovery).

  • What happens if the bike is stolen?

    What happens if the bike is stolen?

    If your bike is stolen or damaged beyond repair, as long as you replace the bike and continue to use it mainly for commuting purposes, the employer can continue to take the salary sacrifice reductions from gross salary.  This means that you can still take advantage of the Income Tax and National Insurance Contribution (NIC) savings.

    If the bike is stolen before it has been paid for, and it is not replaced, this unfortunately constitutes the end of your hire agreement and any outstanding salary sacrifice repayments will be taken from your net pay.  For this reason, Cyclescheme strongly recommends that scheme participants insure the bicycle and safety equipment as soon as they collect it from the store. 

    If your bike has been stolen, please email info@cyclescheme.co.uk with the following information:

    • Date of the theft
    • Police Station Reported to
    • Crime Reference number
    • Is the bike insured?
    • Has your employer been notified?
    • Are any outstanding Salary Sacrifice reductions being taken from Net salary?

    Please note: Cyclescheme offers auto-enrollment to Bike Register as one of our active benfits.  The purpose of Bike Register is to assist with the recovery of your bike if it is stolen.  For further information please see our active benefits page by clicking here.

  • What happens if I leave employment?

    What happens if I leave employment?

    If you leave employment or are made redundant during the hire period any outstanding Salary Sacrifice repayments will be taken from your final salary, from net rather than gross pay i.e. without any further tax exemptions.

    For example, if you are on a 12 month scheme, and have had 4 Salary Sacrifice repayments taken from gross salary prior to leaving employment, the remaining 8 should be taken from your final net salary.

    If applicable, you may then be offered ownership of the equipment in the normal way (please refer to ‘End of Hire').

    Please note: It is not possible to transfer the agreement from one employer to another.

  • Which Retailers are registered with Cyclescheme?

    Which Retailers are registered with Cyclescheme?

    Cyclescheme’s network of over 2000 Retailers provides access to over 500 different cycling brands, including direct access to the UK’s most popular bike manufacturers.  Many of our Retailers provide electric bikes, folding bikes and other specialist cycles. 

    To access our Retailer finder (from which you can search for Retailers in your area, further afield or online) please click here.  The retailer finder will allow you to search for either physical shops that you can visit, or online retailers from which you can get your Cyclescheme Package.

  • I haven’t saved anything during my Hire Agreement

    I haven’t saved anything during my Hire Agreement

    Cyclescheme saves you money by reducing the amount of Income Tax and National Insurance contributions you pay.

    During your Hire Agreement, your employer takes their repayments directly from your Gross Salary. Your Gross Salary is your starting amount – the figure before any other deductions, like tax are taken. Your employer taking their repayment here causes a reduction in your Taxable Income.

     

    Salary sacrifice infographic

     

    You will be able to see the cost of the bike in the 'deductions' section of your payslip; the amount shown will not include your saving. The figure on your payslip will reflect the total cost of the bike divided by the number of repayments you've agreed to as part of your hire agreement.

    Your Taxable Income is where your Income Tax and National Insurance contributions are taken from. These taxes are both fixed percentages, rather than fixed amounts. So if your amount of Taxable Income gets smaller, these payments will too. This means you pay less tax and National Insurance contributions than normal during this time. Tally up the reduction here and you’ll see a significant saving of between 32 - 42%.

    Once you’ve paid our recomended ownership option (either 3 or 7% of your Cyclescheme packages inital value), your savings tend to be between 25 – 39% of the cost of your cycle commuting gear. This is why we describe Cyclescheme as being like a year-round sale with interest free credit!

  • Can't find what you are looking for?

    Can't find what you are looking for?

    If you are unable to find the answer to your question, please get in touch with us using the contact details which can be found here.

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