Are you looking to get your employer on board and get yourself a bike through the Governments cycle to work program or an employer looking to seek the benefits for your employees? The Governments Green Transport Plan gives a tax exemption that allows employers to provide cycles to employees as a tax-free benefit and here at Blazing Bikes we are your next step to getting your action plan in place. Our Cycle to work partners Cyclescheme (Uks leading) and Bike To Work carry the administration service.
Look no further than Blazing Bikes and MTB Shropshire to be able to provide you with the right bike to get you on your way. You can save up to 42% Off your next cycle. You can come and visit us here at Blazing Bikes to order and pick up, or if you know the bike you are after then order it, get the certificate signed off and sent and we will send you your bike for free.
If you would like us to come and visit your place of work with details of how Cyclesheme works and what bikes we have on offer then call us on 01694 781515 or email us at blazingbikes@gmail.com One Question that always get asked though is do you have to use the bike exclusively for work… The answer to this is NO!!
Bare in mind a £1000 limit is capped on most employers as above this businesses would need a consumer credit licence so have a little look on the cyclescheme calculator to see how much you could save. All schemes charge us a commission and thats how they make their money so we cannot use bikes that are on discount, part of any loyalty scheme, you will be getting enough of a brand new bike to make it all very much worthwhile.
So How Does It All Work? How do employees get a tax-free bike for work through Cyclescheme?
Step 1. Once an employer is partnered with Cyclescheme (employers can sign up here) all employees wishing to participate visit Blazing Bikes Store or online website to choose the bike and, if required, safety equipment.
Step 2. Employees then apply for a Cyclescheme Certificate online using a unique link to Cycleschemes secure Extranet facility. The unique link is provided to employers and distributed to all employees. The employee will usually sign an online Hire Agreement at this time.
Step 3. If the employer approves their application they will countersign the Hire Agreement and pay Cyclescheme for the full retail price of the bike and equipment.
Step 4. Cyclescheme will then post out a paper Certificate, usually to employee’s home address.
Step 5. The Certificate is then redeemed in the bike shop and exchanged for the bike package. Salary sacrifice then commences over the hire period (usually 12 months). The salary sacrifice is made prior to Income Tax and National Insurance contributions and, as a result, employees pay less of both.
Step 6. At the end of the hire period the owner of the equipment may choose to offer the employee ownership of the bike for a market value payment, or the employee may pay a small deposit allowing them to remain in possession of the bike and continue to use it.
Please note that the above procedure applies to the vast majority of schemes, but there are some variations to the above. This variation depends on how the employer’s scheme is set up, i.e., the employer may use a finance company to fund the scheme or a benefits provider.
Who can participate in the scheme?
Any size employer from any sector can partner with Cyclescheme. Eligible employees must receive salary via the PAYE system, and earnings should be more than the National Minimum Wage after salary sacrifice. Employers who pay staff close to the National Minimum Wage should contact Cyclescheme to discuss the range of attractive options available that allow lower paid employees to participate in, and benefit from the scheme. There is no credit check for employees wishing to participate, and Under 18s can join the scheme if their guardian signs a guarantor agreement.
How do participants save?
The key to understanding the way participants save money on a salary sacrifice arrangement is in understanding how they pay tax.
Cycle to Work scheme participants can potentially save on 2 forms of tax; Income Tax & Employees’ National Insurance Contributions (NICs).
Income Tax and Employees’ National Insurance Contributions (NICs) are expressed as a percentage and applied to participants’ gross salary amounts. The tax deductions are then made and what the participant gets in their pocket is NET salary.
This is the clever bit; by reducing their gross salary they reduce the amount the income tax and NICs are calculated on, hence participants pay less of both.
Sounds confusing?
Here’s an example of how the savings work during the hire period, assuming the following:
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What bikes are available through the scheme?
What is the maximum value bicycle and safety equipment package employees can select through the scheme?
More Info can be found on our Cyclescheme facts page