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  • Writer's pictureKayleigh Richter

Cycle to Work Scheme: Your FAQ's Myth Busted.

Updated: Sep 15, 2020

1. The savings aren't worth it:

'Compared to what, a 10% discount with a retailer? Depending on what Cycle to Work Scheme provider your employer chooses you can save up to '32% (standard rate taxpayers) or 42% (higher rate taxpayers) as you do not pay income tax or national insurance on the bike as its cost is deduced from your gross salary. The misunderstanding may come from the transfer of ownership payment you make to own the bike. After one year you pay 25%* of its value, potentially cutting your savings from 32% to 7%. But if you take out an Extended Use Agreement and ‘hire’ the bike for three more years, the transfer of ownership payment is just 7%*, leaving savings of 25% or more. (*For a bike costing £500 and over; it’s 18% and 3% for cheaper ones.)' Again these savings vary depending on the scheme provider. E.g Some providers allow you to keep your bike and transfer the ownership once you've paid for your bike or after 12 months.' See how much you could potentially save with this handy calculator:

*Savings vary depending on salary, employer and provider options.

2. It's a hassle to set up

Honestly it really isn't! Once your employer has signed up to a Cycle to Work Scheme provider, it's takes less than 10 minutes to sign up and get your Cycle to Work Voucher! Depending on the provider you may need your payroll number, or other credentials, but other than that, it's as easy as 1-2-3! If your employer hasn't signed up to a scheme invite them here!

3. You can only get hybrids, folders, and other commuter bikes

'You can also get a road racing bike, a mountain bike, or just about any other kind of bike. Government guidance is that Cycle to Work bikes and equipment should be ‘mainly used’ for cycling to or from work, or between one workplace and another. Mainly means ‘more than 50%’. You don’t have to keep a mileage log, however, and the scheme isn’t policed as such. If you were reported by your employer, the bike and/or equipment would be considered ‘a benefit in kind’ which would incur tax'.

4. It takes ages to get your Cycle Voucher

In some cases yes, in some no, again it depends on your Cycle to Work Scheme provider or employer. You could get your voucher in days or it could be anything up to 6 weeks, but it will be worth the wait!

5.You can only spend up to a maximum of £1000

'In theory, there’s no maximum limit. In practice, most employers can only offer packages up to £1,000 due to the special Cycle to Work consumer credit licence they operate under. Some employers, such as local authorities, banks, and businesses that offer consumer credit, have higher limits.' Since the introduction of e-bikes, many employers have been able to increase their loan threshold beyond £1000 thanks to new government policy guidance to support green travel modes.


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