Cycle to Work Scheme

This should be covered in the agreement in that if an employee leaves the company before the 18 months has expired they simply settle the balance due.

The company can opt at the end of the term (not before) to transfer title to the bike at a fair market value, HM Revenue have advised that 5% + Vat of the original R.R.P. is appropriate.

As the actual salary has been reduced, then the class one national insurance due at 12.8% is reduced.

It should not adversely have any affect and can be covered in the salary sacrifice agreement.

It is recommended that the employee be responsible to ensure that the bike is properly insured (inc public liability) and maintained.

No, the Office of Fair Trading have issued an automatic ‘blanket’ licence that will cover all companies operating a legitimate cycle to work scheme. This is not a hire purchase agreement.

Yes you can add safety equipment such as helmets (recommended) lights reflective clothing, locks etc when you order the bike and include the cost in price of the bike.

The Office of Fair Trading advises that an upper value of £1000 is recommended in order to keep within the guidelines of the scheme and group consumer credit licence, however if your company has a consumer credit licence it may be able to offer a higher limit.

No, we do not charge a fee or commission to either the employer or the employee for participating in the scheme.

Great news for the company, and if the company’s cash flow looks like it will suffer then leasing can be easily arranged.