Commonly Asked Questions
Who are Cyclescheme?
Cyclescheme is an independent company created to help employers and
employees make the most of the Government's Green Transport Plan Initiative.
They use their industry experience to get you the bike you want from a local bike
shop. They are independent and can supply the right package of bike,
accessories and safety equipment for everyone.
Who can get a bike?
Employees paying PAYE, who have a contract that outlasts the duration of the
salary sacrifice period are eligible, provided they are over 18 years old, earn
more than the National Minimum Wage after the loan repayment has been
deducted, and have completed the employer's probationary period (if applicable).
What is salary sacrifice and how are savings made?
With a salary sacrifice you pay back the loan on your bike, accessories and
safety equipment from gross rather than net pay for the hire period (usually 12
months), allowing you to benefit from income tax and NI relief. See
www.hmrc.gov.uk/specialist/salary_sacrifice.pdf for a more detailed explanation.
How much can I save?
Typical savings are between 30% and 50%., but the actual amount you pay
depends on your personal tax band, and the way your company runs the
scheme. Higher rate taxpayers will save more, employees whose company
cannot reclaim VAT (the NHS, for example) will save less. If the employer uses
external finance (ie your employer borrows the money to buy the bikes from an
outside agent) then savings are normally about 5% lower. Finally, the fair market
value payment needs to be taken into account when calculating the total savings.
Can I get any bike?
You can choose any bike, including electric and folding bikes, providing your
chosen Cyclescheme partner can supply it. Some bike shops may add an
administration fee to quotes for custom bikes, because the profit margins are
lower than those available on standard, mass-produced models. The College
has to limit the scheme to a maximum of £1000. If we exceed this value we are
required to have a Consumer Credit License (like a bank or other financial
institution ) and it is not in our interest to pursue this option.
Who actually owns the bike? What happens if it is stolen?
The bike and goods remain the property of your employer until the hire period
finishes (unless your employer uses finance; in this case the finance company
will own the bikes during the hire period). At the end of the hire period you may
be given the opportunity to buy the bike for a fair market value payment. If the
bike gets stolen you will be liable for any outstanding monies without any tax
exemptions, so it's very important to make sure the bike is insured. You can
obtain safety equipment, including Home Office-approved 'Sold Secure' D-locks
and cable locks, as part of the scheme.
What happens at the end of the loan period?
South West College will sell you the bike and accessories, and you will pay a
nominal fee of £1.00. Ownership of the bike then transfers to you.
What's the process of getting a tax free bike for work through
The scheme uses a voucher system. Once your employer has entered into a
contract with Cyclescheme, you need to sign an employee hire agreement that
we supply or agree to the terms of the hire agreement online (this process is
determined by your employer). You visit your local bike shop for a quote on a
bike and accessories, which you enter onto our extranet system. When we
receive the quote we will invoice your company, and provide a secure voucher
once the hire agreement is signed. You take the voucher back to the bike shop to
collect the bike.
Do I have to use the bike for work?
You can use the bike however you like; strictly speaking the scheme states that a
bike purchased under Cyclescheme should be used for work journeys at least
50% of the time. You don't have to cycle to work for a specified number of days
throughout the year and you don't have to record your trips or mileage. Please
note that you are not able to claim business mileage allowance if using a bicycle
hired to you by your employer but you can claim for the use of your own car in
the normal manner.
What's the best way to insure the bike?
Your Household policies are usually the cheapest option but you must ensure
that the insurer covers the bike when in storage away from your home, and that
the bike's value doesn't exceed the upper claim limit. If the bike can't be covered
on your home insurance, options for insurance include Cycleguard (02476 851
000) and the free services provided by Fetch (0870 460 8167) who will expedite
your claim and ensure that you are able to replace your bike using the bike shop
of your choice.
Can I get a bike via a mail order specialist?
Cyclescheme's partner shops are capable of supplying bike packages mail order
from their shops, but there are distinct advantages when getting a bike from your
local bike shop that will be the first port of call for advice, servicing, after sales
and warranty. Some mail-order specialists are not part of the Cyclescheme
Can I purchase a bike using the salary sacrifice scheme even if the retailer
is not listed on the Cycle Scheme website e.g. Halfords?
The College is in the position to offer this option. Please contact
leanne.o’email@example.com for more information.
Am I responsible for maintaining the bike?
Yes. Your partner shop will be able to advise you about necessary servicing
depending on how you use your bike. Many shops offer a free first service.
What happens if I leave my job or I'm made redundant?
The agreement to pay your loan is non-cancellable, so you will be obliged to pay
the remaining amount in full, without any tax exemptions. If you opt to take
ownership of the bike you may have to pay an increased fair market value.
Is there a credit check?
There is no credit check