Significant savings are available to employees who choose to cycle on their short journeys, including the commute to work. The Cycle to Work Scheme is the must-have employee benefit during this cost-of-living crisis.
It shouldn’t come as a surprise that some of your colleagues will be struggling with their finances during these turbulent economic times. Many will be worrying about the cost of their commute to work as private car ownership starts to become an unaffordable luxury. Although prices at the pumps may have come down slightly, they still remain at historical highs. Exacerbating this is the rising cost of insurance and maintenance. Those travelling on public transport will have seen the cost of their tickets increase at an unprecedented rate.
This is where the Cycle to Work Scheme can bring some relief to household budgets. The cost of a new bike pales in comparison with the cost of car ownership. When you consider the savings available via the Cycle to Work Scheme, it’s win-win situation for many. Now is the time to add the Cycle to Work Scheme to your staff rewards package.
Significant savings
The scheme is a self-funding employee benefit which operates via a salary sacrifice mechanism with payments back to the employer coming directly out of the employee’s gross salary. Basic rate tax payers can save 32% with higher rate tax payers saving 42%.
Example savings for basic rate taxpayer
A bike costing £2,500 with payments spread over 24 months will reduce the employee’s monthly take-home pay by just £71. Now compare that to the cost of fuel, emissions duty and motor insurance. Ditching the car can make great economic sense.
Green Commute Initiative
Green Commute Initiative (GCI) is an award-winning scheme provider. Established in 2016, the not-for-profit social enterprise revolutionised the marketplace with its no spend limit and no ownership fee format. Such was the response, that the Department for Transport reissued its scheme guidance notes in 2019 to include GCI’s successful model.
Using GCI, organisations can set their own scheme spend limit and salary sacrifice period. Typical schemes have a limit of £3,000 with a payment period of 12 to 36 months. For those working within a LLP and unable to take a salary sacrifice due to the nature of their renumeration package, GCI’s Everyone Cycle scheme can help them access bikes using a 12 months interest-free mechanism, facilitated by the employer.
Importantly, GCI does not charge any ownership fees. As a not-for-profit, GCI views such fees as wholly unnecessary and is simply profiteering from the HMRC tax break. At the end of the three-month hire period, GCI will offer a free-of-charge extended loan of the bike to reduce the Benefit-in-Kind tax liability to zero.
Ebikes make cycling easy
Ebikes are the future of commuter travel. The battery assistance helps riders cover longer distances and conquer hills with ease and without breaking a sweat. Riders can wear their normal attire without the need to shower at their destination. In short, ebikes are perfect for those new to cycling or those covering distances of more than 5 miles. Decent, commuter quality bikes cost around £2,500 to £3,500 so successful Cycle to Work Schemes need to give access to these types of bikes.
To find out more about how GCI can help your employees save money, download our briefing document.
Photo by #bikeibest
