Cycle to Work Schemes & Finance 

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What is the cycle to work scheme?

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The Cycle to Work scheme is a great way to get up to 43% off the price of a new eBike and safety equipment. 

This government backed salary sacrifice scheme is available to PAYE employees in the UK and is the most cost-effective way to get a bike for commuting. Save money with tax free bikes.

How does it work?

Cycle to work is a salary sacrifice scheme. This means the cost of a new bike and cycling equipment is deducted from your salary as a non-cash benefit, so you save on tax and national insurance. Your employer buys the bike for you to ride to work and you hire it from them. The ‘hire’ period is usually 12 or 18 months with monthly payments taken directly from your payslip before tax deductions. To get started, your employer needs to join the scheme and pay for a bike on your behalf. Then you pay your employer back through ‘salary sacrifice’. This means payments will automatically be deducted from your salary, before tax. As you don’t pay income tax or national insurance on the scheme payments you will save between 33.25% and 43.25% (depending on your tax band) on the overall cost. Although your employer owns the bike, effectively it’s yours to use as you wish throughout the ‘hire’ period.

Do you need to use the bike for commuting?

Yes, but not just for commuting. The Department of Transport advises that you must use the bike for commuting at least 50% of the time. So what you do with the other 50% of the time is up to you! You could use it for leisure rides on the weekend.

How do you save on a cycle to work scheme?

Normally when you buy a bike, you have to pay the full price including tax. But when you’re on the Cycle to Work Scheme, you actually pay less income tax and national insurance, so you end up saving money. 

This is because the payments are deducted from your salary before tax is applied. These payments lower your salary. In turn, your tax and national insurance contributions are also lowered.

The amount of money you save depends on a number of factors, including the price of the bike and the income tax bracket you fall into, for example. You could try this savings calculator to get an estimate of the savings you could make.

Be aware that the reduction in your salary could affect your eligibility for certain state benefits. Plus, your salary is not allowed to dip below the National Minimum Wage. It’s best to check if this scheme will affect you before you go ahead.

Klarna Finance

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Slice the bigger purchases in to 3 monthly payments with Klarna. Please get in touch to discuss.