Cycle to Work Scheme Could it be Your Alternative Route?

Posted on May 10, 2012


By Jennifer King

With the new budget being announced in March, people began to worry about money and ever increasing taxes.  Although the price of petrol itself is not set to rise, everybody is looking for a way to save some money.

Cycle to Work has been set in place to save cyclists money and encourage them not to drive to work.  It is a programme that is heavily backed by Halfords.

On average, the scheme will save someone 40% on selected bikes, accessories and safety equipment.  It will also help to reduce emissions and promote healthier lifestyles.

The idea behind the scheme is that an employer will buy a bike from Halfords which is free from tax and national insurance.  The price of this bike is then paid back by the employee as it will come straight out of their wages.  It is repaid over a period of either 12 or 18 months.

Darren Walker, (29) from Mansfield said, “I used to cycle to work all the time but I couldn’t afford the maintenance on my bike.  I ended up selling it but I have been looking into getting another bike so that I can carry on cycling to work and back.”

He continued to say, “I couldn’t have afforded to get a bike on my own.  Looking into getting a bike through my work place is ideal as it would take me too long to save up for a new one myself.”

Technically, once the bike has been purchased from the employer, it is then owned by the employer and ‘hired out’ to the employee.  This means that the employee does not technically own the bike even though they would be allowed to keep the bike and use it as they wish throughout the loan period.

Cycling through sheffield

The employee would also have no entitlement to own the bike once the loan period has finished.  The company owning the bike can sell it to the employee for a fee.  The amount of this is up to the employer.

Basically, this would mean that your boss would own your bike even once you had finished paying the monthly instalments.

As a result of this, the worth of the bike is calculated by the employer using the rules laid out by HMRC.  These newly clarified rules have meant that some people have had to pay more than £100 more then they first expected for their own bike.

Despite the confusion with the rules behind the scheme, Chris Peck, the CTC’s policy co-ordinator said, “On a quick calculation we believe the savings (not including administrative costs to run the scheme) would be 29% for a basic rate taxpayer and 42% for a higher rate taxpayer when buying the bike after a 12-month hire contract.  Those are still very good terms.”

To access information about the scheme or to find out if you are eligible visit

Posted in: Alternative Work