The Cycle to Work Scheme is a great way for employers to reward their employees via a tax free benefit. The employer purchases the bicycle on behalf of the employee who then repays the employer via salary sacrifice through their weekly/monthly wages.
There are advantages for both employer and employee, the employee saves approximately 32% off the purchase price of their new bicycle as they pay less Income Tax and National Insurance as a result of their contributions towards paying for the bicycle. The employer saves approximately 13.8% of the total value of salary sacrifice, due to reductions in Employers’ National Insurance Contributions (NICs) due.
Unfortunately the scheme is only available for employers who operate a Pay As You Earn (PAYE) scheme, therefore the scheme is not available for the self-employed.
If you would like any further information or advice regarding any of the above information or would like some assistance when joining the scheme, please contactDanny Roper.