Cycle to Work Scheme

Cycle to Work Scheme

Guidance for Employers

Moving Britain Ahead

June 2019

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Contents

1. Introduction

4

Why Cycle to Work?

4

What this guidance does

5

2. Options for Cycling to Work

6

Overview

6

Loan Schemes

6

Pooled Schemes

6

3. How a salary sacrifice scheme works

7

Overview

7

4. The salary sacrifice scheme

8

Overview

8

Eligibility

9

Equipment included

10

Inclusivity and adapted cycles

10

5. Consumer hire agreement, authorisation and exemption

11

Overview

11

6. Cycle to Work scheme providers

14

Overview

14

7. Frequently Asked Questions

16

Annex A: What Equipment is included in a salary sacrifice scheme?

18

Annex B: Technical guidance for a salary sacrifice scheme

19

Annex C: Valuing cycles at the scheme end

23

Annex D: Further contacts for advice

24

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1. Introduction

Why Cycle to Work?

1.1 The Government's ambition that cycling and walking are the natural choices for shorter journeys, or as part of a longer journey, was clearly set out in the Cycling and Walking Investment Strategy published in 20171. If we can increase levels of active travel, such as cycling, the benefits are substantial. For individuals, it means cheaper travel and better health. For businesses, it means increased productivity and increased footfall in shops. And for society as a whole it means lower congestion, better air quality, and vibrant, attractive places and communities.

1.2 The health benefits of cycling are well understood. Illness as an outcome of physical inactivity costs the NHS up to ?1 billion per annum, with further indirect costs calculated at ?8.2 billion2.

1.3 We want to make sure that Cycle to Work schemes continue to attract new cyclists and are as inclusive as possible so that people travelling to work have the opportunity to realise the benefits that cycling affords. The scheme has involved over 40,000 employers across the country, and has contributed to help more than 1.6 million commuters to cycle to work.3

1 2 NICE Report (2013) 3 Source: Cycle to Work Alliance 2019

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What this guidance does

1.4 This document offers guidance to employers on Cycle to Work schemes. These are employee benefit schemes that enable employees to hire cycles for active travel and/or cyclist's safety equipment from the employer, or from a third party, in return for a deduction from their earnings known as salary sacrifice. For a definition of cycles for active travel and safety equipment see Annex A. If the scheme meets the relevant criteria it can provide financial benefits to both employers and employees.

1.5 This guidance updates and clarifies the guidance last published in 2011 by the Department for Transport. It may also be of help to scheme providers.

1.6 The guidance reflects the tax and legal position at the time of publication. Employers and scheme providers should check the current position (see Annex B for technical details). This guidance has been developed by the Department for Transport, HM Treasury, HM Revenue and Customs (HMRC) and the Financial Conduct Authority (FCA).

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