Cycle schemes have been around for over 20 years and people are now getting to grips with the benefits. They offer cost savings for the employee, promote healthier commuting habits, and help to reduce air pollution.
How do they work?
They are ‘salary sacrifice’ schemes where the individual or employee gives up part of their pre-tax salary in exchange for a bike and/or cycling related gear. Essentially the company buys the bike, and the employee rents the bike whilst paying the agreed amount back over a pre-agreed term (generally 12-18 months).
Paying the amount before tax allows an employee to save money on income tax and National Insurance. The savings will depend on the tax bracket of the employee and the total cost of the bike and any cycling gear. The money is then repaid to the employer through monthly payroll deductions.
There are several different cycle schemes and not all companies sign up to them. It is important to check with the employer first to understand the scheme and the process.
Once an employee knows they have a scheme open to them generally the process is to find the bike and gear that is needed and obtain a quote to pass to the employer for approval and repayment agreement.
Once the request is confirmed the schemes will notify the employer and employee. Some send redemption codes or certificates that need to be handed/sent to the bike shop to confirm the sale. The bike shop will process the sale and hand the bike over once the certificate or redemption code has been verified. Simple!
RooDog works with several of the main schemes such as Cycle2work, Green Commute Initiative and Bike2Work.
Contact us for more information.