CYCLE TO WORK SCHEME GUILDFORD
It seems unbelievable that the Cycle to Work scheme was introduced in 1999, and still remains and excellent way to purchase a new bike (to get to work of course!). The aim of the scheme remains the same, to encourage people to make healthier and more environmentally friendly lifestyle choices.
The scheme allows you to (if you are employed) to spend on a new bike and equipment tax-free. This means you can save up to 42 per cent on the overall value of the bike and equipment you purchase.
It was previously thought that the maximum spend was £1000, but the newest guidelines state that this is not the case, also confirming that e-bikes are not exempt.
How does it work?
It’s very simple. The Cycle to Work scheme allows you buy a bicycle and equipment and then pay it off over the next year in monthly instalments.
In theory, this is the ‘hire period’. After this, your company is technically allowed to take the bike back, or you can purchase it for ‘fair market value’ – which can be up to 25 per cent of the original value. In practice, there are several other (cheaper) options, and few employers charge the fair market value.
How does it make a saving?
Well, those monthly payments are tax free so you can save up to 42 per cent. The more tax you pay, the more you will save (it depends on your tax bracket). It is effectively and interest free loan.
How do I sign up?
To get a bike on the scheme, your employer needs to sign up to a provider – such as the Cycle Scheme. Ask HR or equivalent or ask around and you’ll probably find others that have benefited.
To get more information on the Cycle to Work Scheme, pop in for a chat or contact us (or read this informative article by Cycling Weekly, which also includes a handy cost calculator).