What is the Cycle to Work Scheme?
CYCLING to work continues to be preferred by many as commuters are wary of public transport due to the ongoing coronavirus pandemic.
And thanks to the Cycle to Work Scheme, there are plenty of additional benefits to riding your bike to the office instead of driving or getting the train.
The Cycle To Work scheme enables employees to buy a tax-free bike – an effective saving of 25 – 39 per cent.
Grant Shapps said on June 5: "The scheme has been extended to cover e-bikes as well, meaning that cyclists can cover longer distances by getting assistance on those uphill stretches. And this is a great time to start using them.
"As we redesign our street landscape to cope with millions more cyclists and pedestrians in the months ahead.
"The evidence is that commuters are already responding.
"Despite fewer people travelling overall during this crisis, we’ve seen around a 100 per cent increase in weekday cycling.
"And at weekends, that increase has been up to around 200 per cent, compared to pre-Covid-19 levels.
"We want to use this recovery to permanently change the way we travel.
"With huge levels of investment.
"We’re bringing forward green transport improvements that otherwise would have taken years, if not decades, to achieve.
"In the short-term, whilst there’s still a threat from the virus, they’ll help millions of people avoid public transport journeys.
"And in the longer term, they’ll help transform our country into a lower carbon, cleaner and greener place to live."
What is the Cycle to Work Scheme?
is a UK Government scheme that lets you hire up to £1,000 worth of bike and safety equipment through your employer.
Essentially you hire out the bike and kit, and there are three packages available: just a bike, a bike and accessories, and just accessories.
The scheme is usually over a 12 or 18 month period using a monthly salary sacrifice.
After this time, you will have the option of buying the bike outright at an “acceptable market value”, continue to hire it out, or give it back.
The benefits of the scheme are you can have a new bike from the start of the programme without having to spend a penny initially.
You can also get a new bike after your 12 months is up.
And there are also offers available too, with discounted bikes available via the scheme.
Statistics from the Cycling to Work Alliance revealed that there was a 120 per cent increase in the sale of bikes in June, compared to the same time period in 2019 - as 37,745 people bought bicycles as opposed to 17,000.
Does the Cycle to Work Scheme save you money?
Yes, but can be complicated to work out.
A £1,000 of equipment on a 12-month scheme works out at a salary sacrifice of £83.33 per month.
However, if you are a standard rate tax payer, this amount will be taken into consideration in your income tax and national insurance.
For example, if you earn around £2,000 a month, you will normally fork out around £640 in Income Tax (20 per cent) and NIC (12 per cent).
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However, the £83.33 salary sacrifice is taken into account meaning the £640 tax output can be lowered to £613.34, meaning a saving of £26.66.
That represents a saving over a year of £320, so you’ll only actually pay £680 towards your £1,000 scheme.
Who is eligible for the Cycle to Work Scheme?
Employers across all public, private or voluntary sectors can implement the scheme for their employees.
Staff wishing to take part in the Cycle to Work Scheme should be paid using the PAYE system.