The Cycle to Work scheme is designed to help you save money on a new work bike, and accessories whilst spreading the cost of the purchase over monthly tax-free instalments through your employer.
Most schemes offer you the chance to purchase an electric bike (e-bike) if you're looking for something to give you an extra boost on your commute.
If you are already in possession of a cycle to work voucher, you can now -
Online & In Store
If you are already in possession of a cycle to work voucher, Veloline provides complete UK coverage via our website. No matter where you are in the UK, we can deliver your bike and accessories to you. We have stores in Hampshire if you want to get sized up.
There are a few different scheme providers out there each with its own variations but the basic idea is the same.
Cycle to work operates as a 'salary sacrifice' employee benefit. This means that you agree to give up part of your salary in exchange for a benefit – in this instance the benefit is a bike and/or accessories. The salary sacrifice is taken from your gross salary (before tax) which means that you will pay less Income Tax and National insurance.
How does salary sacrifice create a saving?
The saving is achieved by paying for the bike and/or accessories directly from your gross salary (before tax). This means your income tax and national insurance are based on your salary less the cost of the bike and/or accessories. This means that your income tax and national insurance are calculated on the reduced amount of salary. Hence, the amount of tax and national insurance you pay is less.
An up-to-date overview of rates of tax can be seen on the Government's website. Most scheme participants save between 32-42% on the cost of their bike and/or accessories during their initial hire period. It's important to remember that the cost of the commuting package will always show up on your payslip as the gross (or RRP amount) rather than the net (or 'with-savings') amount.
It's also important to remember that an Ownership Fee will be due at the end of the Hire Period. This is to avoid tax liability and to ensure ownership of the bike is smoothly and effectively transferred to you. We recommend asking your employer what the transferal of ownership fee is to obtain more insight and to calculate your total savings.
Try out this savings calculator from our friends at Green Commute Initiative. Please note: The calculations provided here will vary depending
on your personal taxation and your employers scheme.