TAX FREE BIKES

How it Works

The government have created a tax break for UK taxpayers allowing employers to hire a new bike, safety accessories and clothing to employees, without incurring a taxable benefit in kind, to encourage more commuting by bike. Additionally, where the hire charge is paid through an agreed salary sacrifice with your employer (usually over 12 months), you make savings on Income tax and National Insurance.

The hire charge is the equivalent of the cost of the bike and equipment and is paid via salary sacrifice, which enables you to benefit from Tax and National Insurance exemption on the sacrificed salary. At the end of the hire period a decision will be taken by your employer on the options available, one of which may be to offer you the opportunity to buy the bike and safety equipment.

 

How do I register for Tax Free Cycle?

Because the scheme operates through a salary sacrifice, employers need to register in order to offer this scheme to their employees. Registration is usualy online so very quick. The company director, or an HR representative responsible for managing staff benefits completes registration. If you are an employer just click on the links below to find out how to register.

How much can I Save?

By paying for the hire of the bike and safety equipment through your salary sacrifice you will save the Tax and National insurance on this cost. Therefore depending on your taxable income, you can save either 32% as a standard tax rate payer, or 42% as a higher tax rate payer compared to paying the hire charge out of your already-taxed earningsDo note, however, that in the event that you are offered the opportunity to purchase the bike after the end of the hire period and you take up this opportunity, the fair market value that you would have to pay would reduce this saving to 10-20% on average.

www.bike2workscheme.co.uk/

www.cyclescheme.co.uk/

www.cycle2work.info/


  

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Spokes Cycles. All Rights Reserved. 2009
Mountain & Road Bikes; Sale, Repair or Hire - Dundee, St. Andrews and Kirkcaldy.