Cycle to Work Scheme

This page provides a brief introduction to the UK Government’s Cycle to Work scheme and how it is administered.

What is the Cycle to Work Scheme?

To promote healthier journeys to work and to reduce environmental pollution, the 1999 Finance Act introduced an annual tax exemption, known as the Cycle to Work scheme, which allows employers to provide cycles and cyclists’ safety equipment to employees as a tax-free benefit. The exemption was one of a series of measures introduced under the Government’s Green Transport Plan. The official Department of Transport guidelines give the detailed background on the scheme, but are quite heavy going!

Is there more than one scheme?

There is only one Cycle to Work tax exemption scheme – but there are a number of scheme operators that can help in the implementation and administration of the scheme on behalf of employers and employees. We work with most of the Cycle to Work scheme operators, including Cyclescheme, who are by far the biggest, Cycle Plus, OnYourBike, Salary Exchange etc.

Each Cycle to Work scheme operator will have slightly different procedures and guidelines, but all will conform the UK Government tax exemption regulations, and all will deliver significant savings (of up to 42%) on the purchase price of new bikes.  Please note that the scheme only applies to brand new bikes.

The tax break applies to purchase values of up to £1000, but with Cyclescheme you are free, as long as your employer does not object, to add your own top-up payment in order to purchase a bike over the £1000 limit.  The tax savings will only apply to the first £1000, but this still a significant saving for many buyers.  Top up payments cannot be made using 0% Finance, as it is not possible to have two finance agreements on one item.

To give you an idea of potential savings, please try out the calculator below.  We are only too happy to talk to you about how you can purchase a bike from us under any of the schemes.

Why Epic Cycles?

  • Widest selection of top-quality models to suit every need: Epic Cycles is the UK’s leading quality cycle store in the UK, devoted entirely to the building and supplying of bikes, rather than general parts and accessories. We have distinctive models from top manufacturers covering all kinds of rider needs from pure road bikes, through multi-terrain or all-road bikes, to bikes that are primarily designed for off road use but which still make excellent Cycle to Work bikes, especially on some of our less manicured roads!
  • Everyday Low Pricing – including on Cycle to Work bikes: We offer competitive pricing to all of customers, regardless of how they are purchasing their new bike – on every day of the year, not just sale periods (in fact we don’t have seasonal “Sales”). And unlike many stores we do NOT exclude Cycle to Work buyers from purchasing at discounted bike prices!
  • Advice: We pride ourselves on offering informed advice on which bikes will suit a rider’s individual needs and budget. We will never try to sell you something purely because it is convenient for us! We are UK’s centre of excellence for every bike brand we sell, with unrivalled knowledge of our product range.
  • Servicing: All bike come with a free first service, but we also offer highly competitive workshop rates for any further servicing if needed too.
  • No hidden fees : We charge neither employers nor employees any admin fees to use any of the third party schemes (such as cyclesceme.co.uk, onyourbike etc.).
  • Shipping: All bikes can be shipped for a small charge within the UK at competitive rates, or you can collect your bike in person from our Ludlow store.
  • Personalisation and Set-up:  at Epic Cycles we rarely sell a bike that hasn’t been tuned in some way.  We are hugely experienced in tailoring bikes to suit the needs of individuals – whether it’s simple sizing and set-up dimensions, or adaptation or substitution of parts, or even full custom specifications, the same service is available to all of our customers, including Cycle to Work buyers.

Frequently Asked Questions

  • Employers also benefit from National Insurance contribution savings and will be able to treat the cost as capital expenditure and claim capital allowances in the normal manner.
  • Savings for employers are always welcome, but running a Cycle to Work scheme also offers the tangible benefits of a fitter, more motivated, loyal and more productive workforce:
  • Brighter, fitter, more punctual staff – a healthier workforce will lead to better performance at work and fewer sick days taken.
  • Enhanced benefits package promotes staff loyalty
  • Liberated car parking spaces
  • Reduced organisational carbon footprint
  • Promoting alternative transport initiatives will also show you have a keen interest in the local community and environmental issues.
Employers of all sizes across the public, private and voluntary sectors can implement a tax exempt loan scheme for their employees.

To be eligible, employees must pay PAYE, and have a contract that is longer than of the salary sacrifice period. They must also be over 18 years old and earn more than the National Minimum Wage after the loan repayment has been deducted.

With a salary sacrifice you pay back the costs of your bike (and any accessories) by reducing your gross pay for the length of the hire period (usually 18 months), rather than by paying out of your net pay – thereby saving income tax at your highest rate and NI contributions.

Typical savings are between 30% and 50%, but the actual amount you pay depends on the rate at which you pay tax and whether your company can reclaim. The savings calculator will give you an idea of savings.

You can choose any type of new bike (used bikes are not elligible for the scheme). Technically, there is no limit on the value or number of bikes you can purchase as long as the bikes will be used for half their time for commuting purposes.
Yes, providing the total value does not exceed the Consumer Credit Licence, and the products fall within the scope of equipment that adds to the safety and security of the bike, rider or luggage.
The bike remains the property of your employer until the salary sacrifice period ends, at which point you may be given the opportunity to buy the bike for a “fair market value payment” (usually a nominal sun). The fair market value cannot be stated before or during the salary sacrifice period as this could be considered a hire purchase (rather than loan or hire) agreement and would therefore not qualify for tax-relief under this scheme.

Alternatively you and your employer can agree to extend the loan period indefinitely at no charge, in which case the bike remains the property of your employer.

If the bike gets stolen or damaged beyond repair you will be liable for any outstanding monies without any tax exemptions. It is essential therefore that the bike is insured. You can obtain safety equipment, including locks, as part of any cycle to work scheme as long as the total value of your bike and accessories is within the consumer credit licence limit.
The official Depart for Transport conditions are:

  • Ownership of the equipment is not transferred to the employee during the salary sacrifice period.
  • While there is no requirement to keep records of miles ridden, employees should use the equipment mainly for qualifying journeys; i.e. for journeys made between the employees home and workplace, or part of those journeys (for example, to the station), or for journeys between one workplace and another.
  • The Cycle to Work scheme is made available generally to employees of the employer concerned and not confined to directors or offered to them on more favourable terms.
The employee is responsible for maintaining the bike. Epic Cycles offer a free first service and can always provide help and advice when needed. We also offer extremely competitive servicing rates after the first service.
The hire agreement linked to your salary sacrifice is non-cancelable, so you will be obliged to pay the remaining amount in full, without any tax exemptions.
No – this not a finance agreement. Your employer may choose to purchase the bike though a financing arrangement and may then choose to add the associated additional costs to your salary sacrifice deductions, but that is an internal company consideration and not part of the cycle to work scheme.