How does Cyclescheme work?

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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 four steps to go through to get a bike for work through Cyclescheme.


    Choose your Cyclescheme package

    What bike and equipment do you want? Consider your commute. How far is it? What route will you take? Be honest with yourself. What are your priorities? What accessories might you need? These are all questions you should ask yourself as you prepare to revolutionise your commute! 

    Decide on the package that suits you:

    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. Head to our Retailers page to choose your store or online retailer and get planning.

     

    Submit your application

    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. If your employer isn’t signed up, they can join for free in just a few clicks. Point them here.

    On the application page, you’ll be guided through a simple form that asks for your work details, contact information, and the value of the Cyclescheme Certificate you’re applying for. Hit ‘submit’, and your employer will receive a copy of your Hire Agreement.

    Get your Cyclescheme package

    With your application approved and paid for (by your employer), it’s time to exchange your Cyclescheme Certificate for your Cyclescheme package. Contact your retailer and arrange a time to pop in and pick up your equipment. If you shopped online, your package can be delivered to an address that suits you, or you can opt for the click-and-collect service that some retailers offer.

    Your salary sacrifice and Hire Agreement now kicks in. For the next 12 months, you’ll pay a set amount from your salary each month in exchange for the hire of your Cyclescheme package from your employer.

    The deduction is made from your gross salary, so you make income tax and national insurance savings (32% standard rate, 42% higher rate).

    Transfer ownership

    When the Hire Agreement and salary sacrifice ends, you can keep your Cyclescheme Package by making a final payment.

    It's a small amount, however. 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% rather than a minimum of 32%. Many Cyclescheme participants will save more.

    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.

  • 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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