Basically, you can get as much as 42% off the price of a new e bike or cycling equipment and not pay any tax or national insurance, via a government backed scheme.
The schemes work in a partnership between your employer and the government, whereby you get a brand new bike straight away and you then pay back the reduced cost of the bike through your PAYE over a given period, generally from 12 to 18 months.
So, your employer buys you a new bike of your choice at a significant saving, you then pay it back over an agreed period.
The amount you save off the cost of the bike depends on your tax band but will vary between 32% and 42%. So, it is a pretty good deal for the user and for the environment.
You can find out the exact amount you would save by using the calculators in the below affiliated scheme links.
You own the bike, but then pay either 18 or 25% of the bike’s value (18% if the bike was initially under £500 and 25% if it was initially over £500). The value of the bike is set by the government at a fair value. See below.
At the end of the agreement, you have the option to extend the hire period to 36 months. This will mean you no longer make monthly contributions; however, you need to make a refundable deposit between 3% to 7% based on the below criteria.
|HMRC Fair Market Value|
|Age of Cycle||Original price of bike under £500||Original price of bike over £500|
The schemes are available to anyone who earns a salary and is paid via (PAYE) . Most big to medium sized business offer a scheme, however, ask your HR contact to double check. If your employer does not use the scheme, it is also easy for them to set one up.
Unfortunately, self-employed are not eligible.
All types of bikes & E-bikes, plus cycling related equipment except the below exceptions.
All the value of the Cycle Scheme order must be put toward the scheme, so you can’t top this individual order up with your own money. Your employer sets the limit for spending.
However, you could also place individual orders for equipment etc. on a separate order anytime.
Yes, once you receive your spending allocation from your employer.
You can then combine various cycling items, even multiple bikes, in any combination up to the spending allocation set.
This depends on your tax bracket. Usually a basic taxpayer will receive a 32% saving, a higher rate tax payer 42%.
If you leave your employer who the Cycle 2 Work Scheme was set up through. The remaining balance for the bike, will be repaid via your final salary.
You can use your bike whenever you want, however the government guidelines request that you use your new bike at least 50% of the time you commute to work.