Cycle to Work Scheme
The Cycle to Work Scheme (C2W) was introduced in the Finance Act 1999 as a way of promoting healthier journeys to work and to reduce environment pollution.
How it works?
The scheme allows employers to loan bikes and equipment to employees (up to £1000) as a tax-free benefit. The loan amount is deducted from your gross pay (salary sacrifice) over the next year, after which the employee pays a nominal fee (e.g. £1) to take ownership of the bike.
As the cost is deducted through salary sacrifice, basic rate tax payers will save 32% (20% tax and 12% National Insurance) while higher rate tax payers will make savings of 42% (40% tax and 2% National Insurance). Employers will typically save up to 13.8% of the salary sacrifice amount.
Who can take part?
Employers of all sizes across public, private and voluntary sectors can implement the scheme. It must be open to all employees however, it is not available for those under 18 or on the National Minimum Wage.
Benefits of cycling?
Apart from the cost savings there are a whole host of benefits to be expected from implementing C2W:
- Improved physical and mental well being of employees
- Happier employees can lead to improved productivity and attendance
- A reduced carbon footprint benefits the planet
- Quicker commuting times
For any queries about the payroll, please feel free to get in contact and we will be more than happy to help. For any bike queries, please feel free to get in contact with the guys below: