Tax breaks for company bikes

Cycling to work benefits your health, your wallet and the planet. Fortunately, employers can support this in a tax-efficient way. Indeed, the Cycle to Work scheme offers valuable savings for everyone involved. Below, we explain how these tax breaks for company bikes actually work.

How the scheme works

Firstly, employers can usually provide bicycles and cycling equipment as a tax-free benefit. Moreover, the Cycle to Work scheme helps employees save tax and National Insurance. As a result, staff enjoy lower costs while travelling more sustainably.

Under the scheme, employers can lend or hire bicycles and safety equipment to employees. However, certain conditions must be met first. Therefore, always check the rules carefully before you begin.

Key conditions to meet

Importantly, the offer must be available generally to employees. In addition, the bicycle must be used mainly for qualifying journeys. For example, this includes travelling between home and work.

Nevertheless, employees can still use the bicycle for other purposes. Indeed, leisure use remains perfectly acceptable. However, this must not become the main use.

What the scheme covers

Helpfully, the scheme covers a wide range of equipment, including:

• Bicycles, including electrically assisted pedal cycles.
• Cyclists’ safety equipment, such as helmets.
• Other relevant cycling accessories.

Furthermore, two bicycles may be provided where necessary for a qualifying journey. For instance, an employee might cycle at both ends of a train journey.

The tax and reporting benefits

Where the conditions are satisfied, employers need not report the benefit to HMRC. Consequently, no Income Tax or National Insurance charge applies to either party. Moreover, the scheme usually operates through a salary sacrifice arrangement. As a result, employees pay from their gross salary and enjoy genuine savings.

Why consider it

Ultimately, these tax breaks for company bikes reward sustainable choices. Moreover, they boost wellbeing and cut commuting costs. Therefore, now is the perfect time to explore your options.

Contact us today, and let us help you set up a scheme that works beautifully for your team.