A Guide to Cycle to Work Schemes

If you’re considering buying an electric bike and wondering whether taking advantage of a Cycle to Work Scheme is a good idea, this is the page for you.

The Cycle to Work Scheme in the UK is a government initiative designed to encourage employees to commute by bike, promoting healthier lifestyles and reducing environmental impact. It allows employees to purchase a bicycle and cycling equipment through their employer in a tax-efficient way.

Because the scheme extends to electric bikes, those with a longer commuting distance can take advantage of the cost savings.

Benefits of the Cycle to Work Scheme

For Employees:

• Significant savings on bikes and cycling gear.
• Improved health and well-being.
• Lower commuting costs compared to public transport or driving.

For Employers:

• Enhanced employee satisfaction and productivity.
• Reduced carbon footprint of the organisation.
• Potential savings on employer National Insurance contributions.

What Are the Rules for Joining The Cycle to Work Scheme?

1. Any employee who pays PAYE (Pay As You Earn) tax can join, provided their employer participates in the scheme.
2. Self-employed individuals cannot directly benefit but may explore alternative tax-efficient ways to buy a bike for business use.
3. Employees don’t need to use the bike exclusively for commuting but must use it at least part of the time for work-related journeys.
4. The scheme can be used for both traditional and e-bikes, making it accessible for various fitness levels and commuting distances.

How Does The Cycle to Work Scheme Work?

Employer Participation:
Employers sign up with a provider.

Employee Enrolment:
Employees choose a bike and/or accessories (helmets, lights, locks, etc.) from Velospeed, up to an agreed value.

Salary Sacrifice:
The cost of the bike is deducted from the employee’s gross salary in monthly instalments over a set period, usually 12 months.

Tax Savings:
Because the payments are taken before income tax and National Insurance deductions, employees can effectively save 32%–47% on the cost of the bike and accessories, depending on their tax bracket.

Ownership Transfer:
At the end of the agreement, employees can pay a small fee to take ownership of the bike or continue to lease it under extended terms.
Your chosen electric bike must be from a reputable brand, approved for the UK and comply with the government’s rules on E-bikes. Velospeed can advise you on this.

Velospeed are proud to be part of the following Cycle to Work Schemes:

Please get in touch for in-depth advice on financing your electric bike from Velospeed through the Cycle to Work Scheme.