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Cycle to Work scheme

What is the Cycle to Work scheme?

The Cycle to Work scheme is a government supported initiative to promote greener journeys
and reduce environmental pollution, and enables those who wish to cycle to work access to a
tax free benefit.
Our provider is Cyclescheme, who are the UK’s number one administrator for the
Government’s Green Transport Plan Initiative. Cyclescheme offers a great choice of bikes
and equipment as Cyclescheme is partnered with around 1500 independent bike shops
throughout the UK and Eire.

How does the scheme work?

You can hire a bike and associated equipment from the Trust. The hire is made via monthly
salary sacrifice deductions from gross pay over a standard 12 month period. Where an
employee pays tax and National Insurance (NI) they can save money as part of the hire
agreement as payments are taken from pay before tax and NI has been applied.
Do I have to use the bike to cycle to work?
The main use of the bike throughout the term of the hire should be for commuting to and from
work, although you are of course allowed to use the bike for non-work purposes. If you do not
use the bike for commuting at all, you may find that you are no longer eligible for the relevant
savings.

What is a salary sacrifice?

A salary sacrifice is an agreement to “give up” an amount of your salary in exchange for a
non-cash benefit. This means that the cost of the hire of your bike is deducted from your
gross pay (before you have paid tax and NI).

How do I benefit from the scheme?

Because the salary sacrifice comes out of your salary before tax and NI have been taken, you
save what would otherwise have been deducted.
How does a salary sacrifice impact me?
Salary sacrifice schemes involve an agreed reduction in salary, which could impact on your
pension, tax credits or future entitlement to benefits. You are therefore encouraged to seek
independent advice on how it would affect you.

How do I apply?

Find out what you can save and your nearest cycle shop at www.cyclescheme.co.uk. Visit a
cycle shop to choose your bike and equipment and get a quotation.
Log onto www.cyclescheme.co.uk/1a59a4 to request your Cyclescheme Certificate and to
read and digitally sign your Hire Agreement.
Once your request has been authorised, you will be sent your Cyclescheme Certificate
Take the Cyclescheme Certificate back to the shop to collect your bike and equipment.
Hire deductions will be taken from your gross salary (salary before deductions) over 12
months.

What bikes are available?

You can choose any bike as long you are able to make the monthly deductions without taking
you below the National Minimum Wage. This includes electric bikes and folding bikes, as long
as one of Cyclescheme’s 1500 partner shops are able to provide it.
What equipment is included under the tax exemption?
Your bike package can include not only the bike, but a number of other accessories/
equipment as highlighted below:-

• Cycle Helmets
• Bells and bulb horns
• Lights
• Mirrors and mudguards
• Cycle clips and dress guards
• Luggage carriers
• Locks and chains
• Pumps, puncture repair kits and tyre sealant
• Reflective clothing

How is my monthly deduction calculated?

The total cost of the bike package is divided by 12 and each payment is taken out of your
gross pay.

When will my deductions start?

Your deductions will start in the pay roll following your voucher approval.

What happens if I leave the Trust?

If you leave the Trust, you are responsible for paying the remaining balance of the bike
package. You will no longer be entitled to tax and NI exemptions and therefore the remaining
balance will be deducted from your net pay (take home pay).

What are my responsibilities?

The benefit is only available to those who will use the bike to cycle to and from work for its
main use. However, you can also use it for non-work purposes. You are responsible for the
maintenance of the bike; however with the collection of your bike, you are entitled to a free
service that guarantees a year’s warranty. You will need to insure the bike and protect it from
loss or theft.

What happens if the bike is lost or stolen?

It is your responsibility to insure the bike whilst you are hiring it. Therefore, if the bike is lost or
stolen, you are still responsible for the deductions from your pay. You will no longer be
entitled to tax and NI exemptions and therefore the remaining balance will be deducted from
your net pay (take home pay). Your insurance should provide you with a replacement bike.

What’s the best way to insure the bike?

Household policies are usually the cheapest option, but you must make sure that your insurer
covers the bike when in storage away from your home. If the bike can’t be covered on a home
insurance policy, we recommend using an insurance company who specialise in cycle cover.

Who actually owns the bike?

The bike and goods remain the property of Cyclescheme throughout the hire period.
Can I buy the bike at the end of the hire period?
Cyclescheme can decide to give you the opportunity to purchase the bike at the end of the
hire agreement, however there is no automatic entitlement and the value of the bike cannot
be predicted in advance.

Why is the bike not automatically mine at the end of the hire period?

In order for our scheme to be compliant as a salary sacrifice arrangement there cannot be an
automatic entitlement to the bike at the end of the hire period; neither can a figure be put on
the bike’s market value at the end of the hire period. This would change the scheme from a
hire agreement to a hire purchase which would consequently remove the tax exemptions
available.

If I am able to buy the bike, how much will it cost me and do I pay this from my
gross pay?

Where you are given the opportunity to buy the bike, Cyclescheme will write to you in
advance of the end of the hire agreement to notify you that to calculate the market value, the
condition of bike needs to be assessed. You will need to advise Cyclescheme of the
condition of your bike so that a market value can be calculated.
It is not possible to predict the market value of a bike prior to the end of the hire period but it
will be in direct relation to the original value and condition of the bike at the end of the hire
period. Therefore it will cost substantially less than the original cost of the bike from new.
Where you are given this opportunity, you buy the bike by using an online payment portal,
and Cyclescheme will issue you with a full receipt.

What if I want to withdraw from the scheme?

Once you have entered into the hire agreement there is a 7 day cooling off period if you
change your mind. However, after this you are not able to withdraw from the scheme.

Are there any people who can’t apply?

The scheme is open to all employees, provided your contract of employment covers the
duration of the hire agreement. However, salary sacrifices cannot take individuals below the
National Minimum Wage. If you are concerned that the cycle to work scheme salary sacrifice
may take you below the National Minimum Wage, then please visit the website
www.cyclescheme.co.uk/rjah to check your entitlement.

What if I’m under 18?

If you are under 18 you will need a guarantor signature for your loan agreement in order for
you to take part.

If I am already sacrificing my salary, will this affect me participating in the
scheme?

If the Cycle to Work scheme salary sacrifice, in addition to your current salary sacrifices,
mean that your salary drops below National Minimum Wage, then we may have to review
alternative options for you such as extending the length of the hire agreement.

Can I claim business mileage?

You are not able to claim business mileage allowance using a bike obtained under the
scheme, during the hire period, as the bike remains the property of the Trust.