Cycle To Work Scheme

Cycle to work scheme

Some employers run a cycle to work scheme to encourage their employees to make healthier, greener journeys to work. Your employer could loan you a bike and/or cycling safety equipment to travel all or part of your journey to and from work. Find out about the schemes.

How a cycle to work scheme works

Your employer may either run a cycle to work scheme themselves or through a third-party provider, like a bike shop. Through the scheme, you could get access to a loaned bike and/or safety equipment.
You must use the bike and/or safety equipment mainly (more than 50 per cent of the time) for 'qualifying' journeys. This means a journey or part of a journey:

• between your home and workplace
• between one workplace and another
• to and from the train station to get to work

Taking part in the scheme means that you don't have to pay a lump sum up front to buy a bike and/or safety equipment. Instead, you could loan the bike and/or equipment from your employer, usually up to the value of £1000.

Making loan repayments

Your employer may want to recover all or part of the cost of loaning you the bike and/or safety equipment. If so, you would then make loan payments back to your employer over an agreed period (typically 12 to 18 months) to spread the cost.
The loan payments are usually taken out of your salary through a 'salary sacrifice' arrangement. This means you agree to accept a lower amount of salary in return for a benefit - the loan of a cycle and/or safety equipment. For more advice about the salary sacrifice arrangement and what you should consider before taking part, ask your employer or follow the link below.

• Advice on salary sacrifice arrangements - HM Revenue and Customs Opens new window

At the end of the loan, your employer may give you the opportunity to buy the bike for its full market value, if you wish. Or, you may be able to continue loaning the bike at no cost - as long as you still use it for qualifying journeys.

Talk to your employer about the scheme

It's up to your employer to decide whether to run a cycle to work scheme and how it will work. So, talk to your employer directly if you're interested in taking part.
Make sure you check whether you or your employer will be responsible for maintenance and insurance for the bike. You should also ask your employer what happens if you decide to leave the scheme before the end of the loan period.

Encouraging your employer to start a cycle to work scheme

By setting up a cycle to work scheme, your employer can take advantage of an annual tax exemption. This means they can claim back the VAT they paid on the bike and/or equipment, and make use of any capital allowances available.

• Capital allowances: the basics - Businesslink website Opens new window

• VAT: an introduction - HM Revenue and Customs Opens new window

If you want to encourage your employer to set up a scheme, you could point them to some advice and resources about its benefits.

• Cycle to work scheme - implementation guidance Opens new window

• Toolkit for employers - Cycle to work guarantee website Opens new window

If you're self-employed

If you're self-employed, you should seek advice about tax relief and deductions for business expenditure for the self-employed, including cycling equipment used for business purposes.

• Tax allowances and reliefs if you're self-employed - HM Revenue and Customs Opens new window

• Reclaiming VAT on your purchases - HM Revenue and Customs Opens new window

Cycle training and planning your bike route to work

See 'Where you can use your bike' for information about finding cycle routes and taking your bike on public transport. If you want to build your confidence about cycling on busy roads, get some cycle training.

• Where you can use your bike

• Cycle training
• Bike Clothing
• Bike Accessories