Want to set up the cycle to work scheme at your workplace? Get in touch for advice and support, Sustrans provide free staff activities to help people get the most out of their bikes! www.smartersmetravel.com
2. What is a C2W scheme
• In essence a way for employees, who pay tax
and NI by PAYE, to obtain a new bike and
accessories by way of a Government approved
tax savings scheme.
• It is paid for over 12 months by taking a
reduction in pay equivalent to the cost of the
purchase
3. About the scheme
• As a part of the Governments’ “Green Travel
Plan” C2W is effectively intended to encourage
the greater use of bicycles, both for the purpose
of travelling to work and also for leisure use.
• There are no restrictions on use of the bike or
checks on use for cycling to work.
• Our scheme fully complies with all the
requirements of the scheme which has to be set
up under the auspices of the Consumer Credit Act
4. The basis of the scheme
1. The employer buys the bike and allowable
accessories/equipment/clothing
5. The basis of the scheme
2 The employee repays the total cost of the
purchase to the employer by way of a “salary
sacrifice” arrangement over 12 months.
The employee is responsible for insuring and
looking after the bike.
6. The basis of the scheme
3 The employer claims back the VAT and capital
allowance on the bike
7. The basis of the scheme
4 After three years ownership of the bike is
transferred back to the employee at a nominal
value.
Simple!!
8. How it Works in practice
• The employer enters into a simple
agreement with LCS to supply a bike and
equipment under the C2W scheme and
advises employees they may now acquire a
new bike and equipment up to the value of
£1000.
9. How it works ... cont.
• Employee calls into either LCS shops or
partner shop to choose their bike and
equipment/clothing.
• This may take more than one visit to
ensure the right bike is chosen.
• Employee takes away a quote once their
choices have been made.
10. How it works ... cont.
• Employer confirms eligibility of the
employee. (i.e. the employee is on a
minimum 6 month contract and not
earning less than the minimum wage rate).
• LCS issues paperwork:-
a) for signing by the employee
b) an invoice for the bike and equipment
c) a salary sacrifice notification for the
payroll department.
11. How it works ... cont.
• Payment of the invoice is made by the
employee to LCS.
• The employee can now collect their new
bike and any additional items ordered
under the scheme.
• Payroll advised to amend salary for the
agreed term of repayment.
12. The Cost Savings!
The Employer:
• Reduced NIC from the salary reduction
• Claims back VAT. (This saving is not passed on
to the employee)
• Capital allowance (20%) claimed on the total
invoice value.
13. The Cost Savings!
The Employee
• Reduced tax at higher rate of the employee
• Reduced NIC £
• ie: Purchase cost 750.00
PAYE saving @ 20% 150.00
NI saving @11% 82.50
Net pay reduction 517.50
Monthly salary sacrifice 43.12
14. The benefits!
• Staff benefit from easy and low cost bike
purchase
• Fitness and health aspects
• Team building events
• Arrive at work energised
• Cost savings for employer
15. What they say!
• “So far, 7 members of staff have taken part in
this scheme, and more are interested. Staff are
delighted with the savings made, and the
simplicity of the process. I would particularly
like to thank Paul for making it all so simple to
set up and run the scheme”
• Some happy scheme members:
Harvey’s of Lewes; GMC Group; BSW Building
Services; Wightman & Parrish.
