Get on your bike! Using the cycle to work scheme

The Department for Transport (DfT) has updated their cycle to work guidance, making it acceptable for employees to request a Certificate of any value via the cycle to work scheme.

Previously, your workforce hired their cycling gear from you, their employer. You could do this because of the Financial Conduct Authority’s (FCA) exemption that allows employers to loan their staff cycling gear worth up to ÂŁ1,000. Now, staff members will hire their bikes directly from Cyclescheme, a founding member of the Cycle to Work Alliance, which has its own FCA Authorisation, so can hire out bikes, components and accessories up to the value limit set by the employer.

Note that, where the cycle is provided under a salary sacrifice arrangement, there continues to be no taxable benefit if the amount paid by the employee is within HMRC approved limits. Where the bicycle is transferred to the employee after 6 years, HMRC accepts that value is negligible.

Salary sacrifices

The provision of a bicycle to employees under the governments cycle to work scheme is an exception to the general rule introduced from April 2017 where the amount taxable is the greater of the salary foregone and the taxable benefit as set out in the tax legislation.

Other exceptions to the general rule include employer pension contributions and childcare vouchers.

At Beavis Morgan, we specialise in working with SMEs and entrepreneurial people across a wide range of sectors, providing guidance and strategic advice to help in formulating plans for your business in order to strengthen its prospects of success, achieve growth and maximise wealth.

If you would like to find out more about how we can help you plan your business efficiently and navigate the maze of tax issues for you and your company whilst taking advantage of the various tax incentives available, contact your usual Beavis Morgan Partner.