Cycle to Work Scheme with All About The Bike

All About The Bike is a provider under the Government's Cycle to Work Scheme

Imagine a half price bike from one of these great brands - Read On!

What is Bike to Work

Bike to Work is All About The Bike’s own scheme under the government’s Cycle to Work Transport Plan. The Transport Plan’s aim is to encourage us out of our cars and cycle to work. Unlike most government schemes this one doesn’t leave you out of pocket in fact it reduces the cost of buying a bike by up to 50%! So not only do you save on fuel and time you also get a bike at a fraction of the normal cost -  No Strings, No Catches.

Why doesn’t All About The Bike use Cyclescheme?

There is a misconception that Cyclescheme is a government backed scheme and is the ‘Official’ Scheme to be used. Cyclescheme were merely one of the first organisations to embrace the benefits of the Governments Cycle to Work Transport Plan.

Over time we were approached by a number of our customers asking if were members of Cyclescheme. Unfortunately when we looked into these agency schemes we discovered that we were expected to pay a 10% commission on all the purchases under the scheme which would prevent us bringing you the very best deals and service on our bikes. In addition the inflexibility of these schemes would only allow us to offer a local collection service rather than offering a nationwide fully assembled service as we currently provide. 

All About The Bike want to bring you the flexibility of choice from a great range of brands so the choice to start Bike to Work was easy! Why wait weeks with other schemes when you can have your bike in days!

How does it work

You choose a bike and appropriate safety equipment up to a value of £1000. Your employer buys the bike and any accessories and loans them to the you (the employee) over a fixed period typically 12 or 18 months.  You commit to a small reduction in your gross salary (salary sacrifice) sufficient to fully cover the cost of the bike over the chosen period. Because the deductions are made from gross salary before any Tax or National Insurance is taken your pound goes further as the amount normally deducted for NI & tax goes to pay towards the bike. Also if your employer is VAT registered then the VAT can also be deducted. Add the savings from the VAT, Tax & NI together and you save up to 50%!!

At the end of the loan period, your employer may sell you the bike. Usually this is a fraction of the original cost, typically 5% or one extra payment (i.e. a 13th or 19th payment).

Who Can Use the Scheme?

There’s nothing worse – you read through all the blurb, get to the end and Hey Presto - doesn’t apply to me!! The good news is that the vast majority of people can benefit from the scheme but the requirements under the Cycle to Work Transport Plan are:

• The scheme is only available to UK tax payers who pay PAYE Unfortunately if you are self-employed you cannot take part in the scheme
• The bike must be used for at least 51% for travel to and from work or on official duty – travel to other offices etc.
• You must be over 18
• Your contract of work must last for the duration of the bike loan period
• Payment through Salary Sacrifice must not cause the employees wage to drop below the national minimum wage
• You should have completed any probationary periods

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Bike to Work - Staff

How Much Can I really Save?

Here’s a typical example

Dave’s seen the prices at the local petrol station rocket over the last few months and has decided its about time he ditched the car and started riding to work. He’s had his eye on a Dawes XC2.2 which is currently being sold by us at £488. Dave works for a local office machinery company who are VAT registered.

Straightaway Dave saves 15% on the rrp of the bike through using AATB’s Bike to Work Scheme as unlike other shops using Cyclescheme AATB do not have to pass on Cyclescheme’s fees to the customer!

This is how the scheme can help Dave save another £209 on his new bike.

• Dave selects the Dawes XC2.2 to loan from his employer over 18 months under the scheme. The XC2.2 is already 15% cheaper than the RRP at £488 through buying through All About The Bike.
• Dave’s employer is VAT registered and is able to claim back the VAT and pass the benefit on to Dave. This reduces the cost to Dave to £415.32 (£488 less £72.68 VAT)
• Dave will make 18 payments of £23.07 from his GROSS pay each month however in real terms he will only pay £15.46 as the £7.61 of gross pay that would normally pay Tax and National Insurance goes towards paying for the bike.
• At the end of the 18 months Dave’s employer can sell him the bike which is normally between 3 to 5% of the value or an additional monthly payment

This is Dave’s savings:

• Because Dave buys from AATB he buys at our discounted price and saves £87 against other Cycle to Work Schemes

• His employer claims back the VAT and passes on the benefit to Dave saving him £72.68

• As deductions are made from Dave’s gross salary he makes a further saving of £137

• At the end of the 18 months Dave will have paid £278 for the XC2.2 which will save him 43% and because he bought at our discounted price he saves a whopping 52% off rrp!

• Dave will just need to agree with his employer the nominal amount he needs to pay to buy the bike at the end of the loan period

Remember if you’re a higher rate tax payer you save even more. The table below provides an example to compare against. 

Example of potential savings based on a Dawes XC2.2 Dual Disc Mountain Bike 2008 at £488
	Basic Income tax		Higher Rate Income Tax
Employer VAT registered?	Yes	No	Yes	No
Vat Saving	72.68	0	72.68	0
Net cost of bike	415.32	488	415.32	488
Income Tax & NI saved through paying via salary sacrifice	137.05	161.04	170.28	200.08
Total Savings*	209.73	161.04	242.96	200.08
Cost of bike	278.27	326.96	245.04	287.92
Equivalent Monthly Cost over 18 months	15.46	18.16	13.61	16.00
Equivalent Discount	43%	33%	50%	41%
* Total savings are based on the employer passing on the VAT savings (where applicable) and the
NI and Tax not paid on salary sacrifice deductions

What type of Bike can I loan and can I include other equipment?

There’s no laid down guidelines as to the type of bike that can be purchased under the scheme as long as it can be used to get to and from work however children’s bike’s are not included in the scheme.  The scheme also allows for Safety Equipment to be included and this can include:

• Locks to secure the bike
• Lights including LEDs, dynamos and reflectors
• Pumps and tools for minor repairs
• Panniers, racks and baskets
• Mudguards
• Reflective Clothing

I want a bike what do I do next?

If you’re employer is already set up for Cyclescheme or similar that’s great because its even easier to buy a bike from us. Just speak to your Cycle to Work organiser and let them know about Bike to Work. We just need a few details from them and your off. No vouchers, no waiting for confirmations, no delay. Its as simple as 1, 2, 3!

1. Select the items you want and complete the order form
2. We’ll confirm availability & send an invoice by email to your employer which can be paid by Debit, Credit Card or Cheque (will need to clear).
3. We send the bike and any equipment within 2/3 days of payment (cleared). If your employer agrees we can also send the bike to your home address.

If you don’t currenty operate a Cycle to Work scheme print off these pages and pass them to your employer to get them started. We have a complete starter pack we can send them or alternatively get them to give us a call and we can chat through the scheme and what they need to do.

I've Got Some More Questions - What Do I Do?

Click on the Frequently Asked Questions banner below or alternatively you are more than welcome to call us on 01244 552000 or email us at sales@all-about-the-bike.co.uk

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Bike To Work - For Employers

I’m an employer what do we do?

We have all the documentation for you to use or adapt to set up the scheme as quickly and easily as possible which we can be easily mailed through. But before you get started…

What's in it for the Employer?

There are very few perks which as an employer you can offer your staff which will save you money and improve their health and well being to boot. Giving your staff a tangible benefit will not only motivate them but people who cycle regularly tend to take less sick leave and generally are far healthier than their car bound colleagues.

For every member of staff that cycles another car parking saved and significantly contributes to company green policies and transport plans – and then there’s the financial benefits.

The company can treat the cost as a capital expenditure and claim capital allowance in the normal i.e 40% year 1 25% year 2 for SME or 25% Year 1 & 2

You don’t pay Employer’s National Insurance Contributions on any sacrificed salary (this is typically 12.8%)

How does it Work?

The Cycle to Work Transport Plan allows employers to purchase bikes and safety equipment to loan to their staff over a fixed period (typically 12 or 18 months) which the employee pays hire charges for though salary sacrifice. This allows employee to take advantage of Tax & NI breaks and repayment of a VAT free amount where this is passed on to the employee.

As an employer you can claim back the VAT (or pass on this as a benefit), claim capital expenditure and save on NI employer contributions

Which of my employees can take part in the Scheme?

The scheme must be open and available to all employees who meet the following criteria:

The Employee/’s:

• Must be over 18 years old
• Must be on the payroll (PAYE)
• Contract of employment must last for the duration of the loan/hire period.
• Salary Sacrifice cannot cause their wage to be reduced below the minimum wage .
• Cannot loan a bike during any probationary period
• Must use the bike for 51% of their journeys to work.

What Can & Can’t be purchased under the scheme?

The Scheme allows you to purchase and loan a bike together with safety equipment up to the value of £1000. There are no laid down guidelines as to the type of bike that can be purchased under the scheme but it must be suitable to be used to get to and from work however children’s bike’s are not included in the scheme.  The scheme also allows for Safety Equipment to be included and this can include:

• Locks to secure the bike
• Lights including LEDs, dynamos and reflectors
• Pumps and tools for minor repairs
• Panniers, racks and baskets
• Mudguards
• Reflective Clothing

What’s involved and how do we set up a cycle to work scheme.

AATB will provide you order forms and draft hire agreements for use under the Bike to Work Scheme.

Please email us at sales@all-about-the-bike.co.uk or call us on 01244 552000 and we’ll gladly send you our Bike to Work pack.

Refreshingly so the Department of Transport's implementation guidance is extremely clear and provides all the details required to get up and running. We suggest any employer thinking about setting up a scheme has a read of the DOT guidance/the information below and then rings ourselves on 01244 552000 to chat through any questions may have (although we have put in below some of the more frequently asked questions). We’ll help you through the process and provide you with the necessary advice and guidance.

The link below will take you to the DOT guidance

 http://www.dft.gov.uk/pgr/sustainable/cycling/cycletoworkguidance/pdf/518054/

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Frequently Asked Questions

• If your Pension contributions are based on gross earnings
• If you are close to retirement and have a final salary pension
• If you are entitled to a contributions based benefits like the state pension;
• If you are entitled to earnings related benefits for example maternity allowance.

Unfortunately not. The scheme only allows for accessories to be purchased with a bike.   BACK TO TOP