|Cycle 2 Work - Save pounds off the price of your bike!|
We have developed the Tweeks Cycles Cycle 2 Work Scheme to help businesses take advantage of the Government’s 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 bicycles and accessories through their employers without paying Income Tax or National Insurance contributions 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 by over 40%) all without costing the employer a penny.
By using Tweeks Cycles as your preferred Cycle 2 Work scheme partner, you ensure that your staff benefit from the accumulated knowledge of our technical experts when selecting their cycle. This means that they will be getting the very best advice available – enabling them to enjoy the full benefit of the scheme by getting the right cycle and accessories for their needs. Our pre-prepared downloadable forms also mean that your administration of the scheme will be simple and hassle-free. All the hard work has already been done for you!
If you have vouchers for another Cycle to Work scheme, then there’s no need to be sad – because you can probably still use us as your cycle supplier. In addition to our own scheme, we also accept vouchers from CycleScheme, Bike2Work and OnYourBike. If you have vouchers from another scheme not mentioned here, then it’s still worth Contacting us to see what we can do. If we can help, then we will!
* Actual savings will depend on individual circumstances.
** Scheme period can be over 12 months or up to a maximum of 18 months.
Minimum spend is £250 with a maximum of £1000. It is possible to spend more, although it requires the employer to obtain their own credit licence. Visit www.oft.gov.uk for further details on obtaining a Consumer Credit Licence.
The pre-contract and hire agreement are compulsory to ensure that 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 acknowledging 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.
Employees can save on 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.
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.
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 employee’s remaining gross salary to below the national minimum wage.
Cycles supplied under the scheme are for the purpose of commuting to and from the employee’s place of work. The scheme encourages employees to also use the cycles for leisure activities. Road based bikes, hybrids, mountain bikes, and folding bikes are all suitable under the scheme.
Any safety accessories associated with riding to and from work can be included under the scheme – e.g., helmets, bells, mirrors, mudguards, pumps, reflective clothing, locks panniers, bags and lights.
Yes – a request can be placed which includes only safety accessories (no cycle). This might be useful if, for instance, you have used the scheme in the past and already have a cycle but require new accessories. In such instances the scheme works in exactly the same way as if a cycle was included. Please see above for what constitutes a safety accessory.
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.
The amount allocated to the employee’s voucher cannot be changed, so the employee will still be charged the same amount every month if they take a cheaper bike.
No. The voucher is not transferable to anyone.
It is the employee’s responsibility to ensure that there is sufficient and suitable insurance cover for the cycle and accessories supplied under the scheme.
The employee’s monthly salary sacrifice will begin from the first pay packet after the hire agreement has been signed.
No. The hire period contract will run for either 12 or 18 months depending on the duration agreed with the employer.
If the employee takes maternity, unpaid, holiday or sick leave that results in their monthly salary dropping below the amount of the monthly salary sacrifice amount, the employer will suspend the salary sacrifice payments until the employee is earning again.
If the employee leaves the company or retires during this time, then the cycle becomes a taxable benefit and the outstanding balance remaining on the price of the cycle will be deducted from the employee’s final net salary. As this 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.
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. In order to do this, the employer has to apply for their own credit licence. Whatever the value, the employer retains ownership of the supplied cycle and accessories throughout the hire period.
The voucher needs to cover the total retail cost (before any savings) of the cycle and accessories.
NB: All bikes purchased through Cycle to Work schemes other than the Tweeks Cycles Cycle to work scheme will be quoted and sold at full SRP of the bike.
During the hire period, the cycle and accessories are the property of the employer. The employee leases the bike from their employer over either a 12 or 18 month period. At the end of the hire period, the employer can transfer ownership for a nominal fee based upon the HMRC table of values or allow the employee to continue using the bike whilst retaining ownership.
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%).
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
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 employee’s final net salary. As this 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.
At the end of the hire period, the employer may either 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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