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Tax-free bike for work through Cyclescheme

The council has partnered with a company called Cyclescheme to provide bikes for staff at big savings. This page gives more detail about the tax-free bike for work scheme.

Ordering your bike and accessories

Partner bike shops can order bikes and accessories for you but may wish to either take a deposit or have any carriage fees covered, to prevent them from being left with a special-order bike or paying extra carriage fees.

Any deposits taken on your credit card will be credited back when you redeem your voucher.

Please note that Cyclescheme does not insist on deposits being taken and all such transaction requests are at the discretion of the bike shop or at the request of the employee.

Mail order

Some partner shops are capable of supplying bike packages mail order from their shops, under the government's green travel plan. However, there are distinct advantages when getting a bike from your local bike shop that will be the first port of call for advice, servicing, after sales and warranty. Please note that, because of this deficiency, some mail order specialists are not part of the Cyclescheme partner network.

Buying a custom bike

A very small selection of Cyclescheme's partner bike shops may wish to add an administration fee to quotes for custom bikes. 

This is because the profit margins on custom bikes, built in the UK, are lower than those available on standard, mass-produced bikes. The shop also has much more administration when building a custom bike as parts have to be ordered in advance and in-house builds coordinated amongst other daily work. The administration fee is typically no more than 10 to 12% and is ONLY applicable to custom bikes.

It is worth noting that the savings from the scheme are also applied to reduce this administration fee to well below 10%.

Alternatively, if you are considering a custom built bike, you may want to consider the other Tax Free Bikes for Work scheme which works in a slightly different way and includes bikes up to the value of £3,000.

Second hand bikes

Cyclescheme does not allow second hand bikes to be obtained because your rights are not protected to the same extent as with new bikes.

We are also concerned that you may not get the right size and that existing wear and tear could compromise your first year's hire during which time you are responsible for its maintenance and roadworthiness.

Accessories

Cyclists' safety equipment is not specifically defined in the legislation and so a common sense approach is taken to the equipment provided. This could include:

  • cycle helmets which conform to European standard EN 1078
  • bells and bulb horns
  • lights, including dynamo packs
  • mirrors and mudguards to make sure riders visibility is not impaired
  • cycle clips and dress guards
  • panniers, luggage carriers and straps to allow luggage to be safely carried
  • locks and chains to make sure cycle can be safely secured
  • pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
  • reflective clothing along with white front reflectors and spoke reflectors

Use of the bike

There is no requirement for you to cycle to work for a specified number of days throughout the year or to record your trips.

You can also use the bike for leisure at weekends and on holiday, although a bike purchased under Cyclescheme should be ridden for at least 50% of time during trips to work. 

The Inland Revenue does not expect you to keep a record of mileage.

As the employer owns the bike, you cannot claim mileage when using your bike until the end of the salary sacrifice period.

Leaving the scheme early

Early leavers who wish to keep the bike package will need to pay all outstanding monies from their net salary, plus a termination fee that covers the fair market value payment (legally required to transfer the title of goods to them).

The termination fee will not exceed a value equal to the outstanding monthly salary reductions. The termination fee will be collected by your employer from any remaining net salary payments. Settlement will be from net pay because once you leave, you also leave the bike scheme, and are no longer eligible for tax deductions. 

If you do not wish to keep the bike, a disposal fee will be charged, which is likely to be equivalent to the fair market value.

End of hire period

At the end of the hire period you may be given the opportunity to buy the bike for a fair market value (plus VAT). Fair market value is calculated by the employer in line with guidance from HMRC. View the latest guidance from HMRC. This arrangement cannot be guaranteed nor written within the hire agreement otherwise it would be a benefit in kind and therefore not be eligible for any tax savings.

If you choose not to own the bike you will be charged a disposal fee, likely to be equivalent to the fair market value, for the council to dispose of the bike.

Stolen bike or bike damaged beyond repair

Since you can no longer cycle to work you have effectively left the scheme and you will need to pay all outstanding amounts from your net salary (that is, without any tax savings).

You will need to contact your insurance company to make a claim.