Cycle 2 Work? Save nearly 50% off the price of your bike!

We have developed the Tweeks Cycles Cycle 2 Work Scheme to help businesses take advantage of the Governments Green Transport Plan to encourage healthier lifestyles and to help reduce environmental pollution. This Government plan offers some unique personal and corporate tax saving incentives. It enables employees to purchase through their employers bicycles and accessories without paying income tax, National Insurance contribution or VAT on the total amount. It is payable via a salary sacrifice over a period of up to 18 months.

For the employer this scheme has the added advantage of offering a considerable saving on company National Insurance contributions.

When purchased through our Cycle 2 Work scheme we can help employers supply their staff with bicycles and accessories at huge savings (in some cases up to nearly 50%) and it doesn’t cost the employer a penny…

By using Tweeks Cycles as your preferred Cycle 2 Work Scheme partner you can be sure that your staff are receiving the very best advice from our technical sales staff to ensure they enjoy the full benefit of the scheme, with the right cycle and accessories for their needs. Also by using our downloadable pre-prepared forms it keeps your administration of the scheme simple and hassle-free. We’ve done all the hard work for you.

Tweeks Cycles' Cycle 2 Work Forms:

Cycle 2 Work Scheme General Information

Cycle 2 Work Scheme Forms A, B & C

Employee Benefits of using Tweeks Cycles Include:

· Saving of VAT, Income Tax and National Insurance contributions can reduce the retail cost of the bike and accessories by up to nearly 50%*

· Great choice of high quality cycles and accessories available, delivered carriage free anywhere in the UK.

· Spread the payment of the bicycle over a period of up to a maximum of 18 months.**

· No finance charges to pay.

· Enjoy the health benefits cycling provides. Just 3 hours of cycling a week can reduce the risk of heart disease or a stroke by up to 50%. Like other forms of aerobic exercise cycling offers many health and wellbeing benefits including improved mental agility and outlook whilst slowing the effects of aging!

· Saving you money. Nearly a quarter of all journeys are made within a mile of home and half of the population commute a distance of 5 miles or less.

Employer Benefits of using Tweeks Cycles Include:

· Contribute to the Governments Green Transport Plan and benefit our environment.

· Make savings on your company National Insurance contributions

· Offer a great cost saving benefit to your staff.

· Increase staff morale and encourage company loyalty.

· Encourage a healthier more productive workforce with less sick absence.

· Cycles can be treated as a business asset and as such are VAT recoverable.

· All at zero cost to the company.

(* actual savings will depend on individuals circumstances ** scheme period can be over 12 months or up to a maximum of 18 months)

How does the scheme work?

Very simply, just follow the steps below.

· The employee informs the employer that they would like them to take part in the scheme and provides the employer with this information pack.

· On agreement the employee selects a bike and associated safety accessories from the Tweeks Cycles range. This can be either online at www.tweekscycles.com, by calling our technical sales team on our lo-call rate number 0844 499 5656 or by visiting us in store at: 75 Ash Rd South, Wrexham Industrial Estate, Wrexham, North Wales, LL13 9UG

· The employee completes the enclosed order form (Form A) including the colour and size of all items in the description section.

· The employer completes the pre-contract information form (Form B) with the employee.

· The employer completes the hire agreement (Form C) with the employee and this is to be signed by both employee and employer.

· The employer then has the option of either ordering the bike and accessories online (payment for the goods would be taken at this time) or sends us the completed order form along with a company cheque for the value of the selected cycle and accessories made payable to: DT Automotives Ltd. We will then issue a voucher which can be redeemed in store.

· The employer then operates the employees salary sacrifice for the duration of the hire period (12 or 18 months) where the VAT exclusive price of the cycle and accessories is divided by the hire period (12 or 18 months) and deducted monthly from their gross salary.

· After the contract hire period has ended the employee pays the employer a nominal amount based upon the governments table of values (more information about final valuation can be found on the HMRC website) and the cycle is then theirs to keep, or alternatively can continue to use the bike whilst ownership is retained by the company indefinately.

Minimum spend is £250 with a maximum of £1000 (It is possible to spend more it simply requires the employer to obtain their own credit licence. Visit www.oft.gov.uk for further details on obtaining a Consumer Credit Licence.

Important information for Employees:

· The amount saved on the employees chosen bicycle and accessories will be dependant on the employees rate of income tax and NI contributions.

· Employers must be VAT registered in order to claim the VAT back on the cycle and accessories.

· If the employer is not VAT registered the employees savings will be limited to their income tax and NI contributions.

· Employees should mainly use the supplied bicycle and accessories for commuting to and from their place of work.

· Employees are responsible for the maintenance, upkeep and sufficient insurance of the bicycle and accessories supplied under the scheme.

· Should an employee leave employment before the hire contract period is over they must pay the full outstanding amount to the employer.

· It is possible for employees to purchase more than one bicycle through the scheme if, for example there is a need for a bicycle at either end of a train journey.

· Employees must be over 18, on the employer’s payroll and pay tax through PAYE.

· The value of the salary sacrifice must not reduce the employee’s salary below the national minimum wage.

· The employee’s contracted employment period with must be longer than the salary sacrifice period.

· The employer owns the bicycle until the ownership is transferred to the employee at the end of the hire contract period.

Important information for Employers:

· Employers must be VAT registered in order to claim back the VAT on the price of the bicycle and accessories.

· Employers have no National Insurance contributions to pay on the salary sacrifice value.

· Employees should mainly use the supplied bicycle for commuting to and from their place of work.

· Employees are responsible for the maintenance, upkeep and sufficient insurance of the bicycle and accessories provided under the scheme.

· Should an employee leave your employment before the end of the hire contract period they must pay the full outstanding amount to the employer.

· It is possible for employees to purchase more than one bicycle through the scheme if, for example there is a need for a bicycle at either end of a train journey.

· The employee must be over 18, on the employers payroll and pay tax through PAYE.

· The value of the salary sacrifice must not reduce the employee’s salary below the national minimum wage.

· The employee’s contracted employment period with must be longer than the salary sacrifice period.

· The scheme must be made available to all employees.

Further Information for Employers

The pre-contract and hire agreement are compulsory to ensure the scheme complies with the Consumer Credit Act 1974. It is a further requirement for the employee to be given full copies of the Hire Agreement at the point where they and the employer sign the agreement. The order form does not constitute part of the hire agreement under the Consumer Credit Act 1974. It is good practise to have the employee complete and sign the order form confirming that they want the cycle and accessories and they acknowledge that they are going to incur a hire charge. A hirer has the opportunity to withdraw at any time up to the point that the agreement is signed. The forms and agreement we have prepared are designed for your use however we do not accept any responsibility for the way they are used or their enforceability.

Employee Frequently Asked Questions

What advantages does this scheme give me?

Employees can save VAT, Income Tax and National Insurance contributions by having the cycles and accessories retail price removed from their salary before deductions. Effectively employees can spread the cost of these products over 12 or 18 months depending on the agreement with the employer.

Who does the bike belong to?

During the hire period the cycle and accessories are the property of the employer. The employee leases the bike from their employer over a 12 or 18 months period. At the end of the hire period the employer can transfer ownership for a nominal fee, typically 5% of the original voucher value.

What is a salary sacrifice?

Salary sacrifice is when the employee sacrifices part of their salary in exchange for a benefit (in this case a cycle and associated accessories). A salary sacrifice system cannot be used if the value of the monthly salary sacrifice payments would take the employees remaining gross salary to below the national minimum wage.

What type of cycle can be supplied under the scheme?

Cycles supplied under the scheme are for the purpose of commuting to and from the employees place of work. The scheme encourages employees to also use the cycles for leisure activities. Road based bikes, hybrids, mountain bikes, folding bikes are all suitable under the scheme.

What accessories can be included?

Accessories the employee can include under the scheme are basically safety accessories associated with riding the bike to work and include: Helmets, bells, mirrors, mudguards, pumps, reflective clothing, locks panniers, bags and lights.

Can I purchase a more expensive cycle than my voucher amount?

Yes. The employee will need to use their own debit card or cash to make up the difference when the cycle is collected. The extra amount above the voucher value will not be part of the employee salary sacrifice.

Can I purchase a cheaper bike than my voucher amount?

The amount allocated to the employees voucher cannot be changed, so the employee will still be charged the same amount every month if they take a cheaper bike.

Can the voucher be used to purchase a cycle for somebody else?

No. The voucher is not transferable to anyone.

What happens if the cycle is stolen?

It is the employees responsibility to ensure there is sufficient and suitable insurance cover for the cycle and accessories supplied under the scheme.

When do I start paying for the cycle?

The employees monthly salary sacrifice will begin in the first pay packet after the hire agreement has been signed.

Can the balance be paid off early?

No. The hire period contract will run for either 12 or 18 months depending on the duration agreed with the employer.

What happens if I’m off work?

If the employee takes maternity, unpaid, holiday or sick leave that results in their monthly salary to drop below the amount of the monthly salary sacrifice amount, the employer will suspend the salary sacrifice payments until they are earning again.

What happens if I leave my employer during the hire period?

If the employee leaves the company or retires during this time, the cycle becomes a taxable benefit and the outstanding balance remaining on the price of the cycle will be deducted from the employees final net salary. As these will no longer be part of the salary sacrifice the employee will not save the Income Tax or National Insurance on the remaining outstanding balance.

Is there a minimum and maximum amount that I can spend?

The minimum amount is £250 and the normal maximum amount is £1,000. The employee can purchase cycles and accessories that exceed this amount if they pay for the difference themselves when the cycle is collected. Alternatively we can issue a voucher for a value greater than the maximum £1000, The employer simply has to apply for their own credit licence to do this. Whatever the value the employer retains ownership of the supplied cycle and accessories throughout the hire period.

Does the voucher have to be for the retail cost or the cost after the savings?

The voucher needs to cover the total retail cost (before any savings) of the cycle and accessories.

Employer Frequently asked Questions

Who does the bike belong to?

How much will this cost the company?

There really is no cost to the employer. The company purchases the cycle and then leases it back to the employee until the full amount is recovered. The employer also saves money by not having to pay the company’s contributions on the amount that would have been deducted for National Insurance (usually 12.8%).

Does my company need to apply for a credit licence to partake in the scheme?

No. The Office of Fair Trading (OFT) has issued a group Consumer Credit Licence (a copy of which is included in this pack) for employers to provide employees with cycles and accessories with a value of up to £1000 including VAT. So it is not required unless the employer wishes to supply product in excess of £1000 including VAT. For more details on obtaining a Consumer Credit Licence visit: www.oft.gov.uk

Can my company participate in the Cycle 2 Work scheme even if we are not VAT registered?

Yes. There are still significant savings to be gained even if you are unable to reclaim the VAT.

What happens if an employee leaves during the hire period?

If the employee leaves the company or retires during this time, the cycle becomes a taxable benefit and the outstanding balance remaining on the price of the cycle will be deducted from the employees’ final net salary. As these will no longer be part of the salary sacrifice the employee will not save the Income Tax or National Insurance on the remaining outstanding balance.

What happens once the hire period is completed?

At the end of the hire period, the employer may transfer title of the goods to the employee for a nominal fee based upon the HMRC table of values or allow the employee to continue using the cycle (at no extra cost) whilst retaining ownership.

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