PLEASE NOTE THAT NO ORDERS PLACED AFTER 26/04/2019 WILL BE DISPATCHED UNTILL MONDAY 6TH APRIL DUE TO STAFF HOLIDAYS UNLESS PREVIOUSLY AGREED WITH A STAFF MEMBER. THANK YOU FOR YOUR PATIENCE.

0208-524-0063
Categories
BOX_HEADING_SHOPPING_CART_1 0 items
Your cart is empty.

Page 2

 Ashcycles Cycle to Work Schemes

  At Ashcycles we participate in four cycle to work schemes.  Our first cycle to work is an in house scheme and is listed below (Ashcycles Cycle 2 Work Scheme), on this scheme you can have any offer as advertised and priced on the website. 

The other cycle to work schemes we do are as follows :

1. The Cyclesheme : http://www.cyclescheme.co.uk
2. Bike to Work Ltd : http://www.biketowork.co.uk
3. Bike 2 Work Scheme : www.bike2workscheme.co.uk

4. Halfords Cycle 2 Work Scheme https://www.cycle2work.info/
5. Salary Exchange http://www.salary-exchange.co.uk/

If you are using any of the three schemes above in the list please email us prior to ordering to get a quote for an item ( unfortunately due to the transaction costs involved in the vouchers prices / deals may vary using these schemes).

 

Ashcycles Cycle 2 Work Scheme

To promote healthier journeys to work and to reduce environmental pollution, the 1999 Finance Act introduced an annual tax exemption, which allows employers to loan cycles and cyclists' safety equipment to employees as a tax-free benefit.  The Cycle 2 Work scheme gives financial benefits to both employers and employees.
The Cycle 2 Work Scheme is only valid in the UK.

At Ashcycles we have created all the necessary documentation needed (please look below) to help an employer set up  a Cycle to Work scheme for their employees.

Ashcycles Cycle 2 Work Forms :




Information for Employees

The amount an employee will save through the cycle scheme varies on the employees rate of income tax and NI contributions.
To claim the VAT back on a bicycle and safety equipment the employer must be VAT registered.
Employees are expected mainly to use the bicycle and safety equipment for commuting to work.
Employees are expected to maintain and sufficiently insure the bike and safety accessories.
Under certain circumstances it is possible to purchase more than one bike under the scheme.
If an employee leaves employment before the hire agreement is completed the employee must pay the full outstanding amount.
Employees must be over the age of 18 years old and pay tax through PAYE. They must also be on the employers payroll and completed probationary periods. The Employees contract of employment cannot be less than the hire period.

The employer owns the bike and safety accessories until the hire agreement is finished.

Information for Employers

To be able to claim VAT back on the bicycle and safety equipment the Employer must be VAT registered.
The Employee is expected to mainly use the bicycle and safety equipment for commuting
Employees are expected to maintain and sufficiently insure the bike and safety accessories.
Employees must be over the age of 18 years old and pay tax through PAYE. They must also be on the employers payroll and completed probationary periods. The Employees contract of employment cannot be less than the hire period.
It is expected that the scheme is available to ALL employees.
The value of the salary sacrifice cannot bring the employees wage down below minimum wage.
 Employers have no National Insurance contributions to pay on the salary sacrifice value.

What the Employer has to do

It is the employers responsibility to manage the cycle to work scheme and make sure it is all correct. The employer needs to make sure all payroll deductions are correct during the hire agreement. As the employer you have the option to purchase goods for the cycle to work scheme by credit card or cheque. As the employer it is expected to ensure that the salary sacrifice deductions are made to the employees salary. Also at the end of the hire agreement, the employer will need to raise a VAT invoice to the employee for the market value of the bike and safety accessories in order to transfer legal ownership.

How are Savings made?

As an employer, you can provide a bike and safety equipment for commuting free of tax and NIC. The employer will recover the cost of the bike and safety equipment by hiring the goods to the employee. The employee pays the hire charges through a salary sacrifice arrangement which in turns allows PAYE and NIC saving for the employee. Vat may also be recovered if the employer is VAT registered.

An Example of Savings?

Below is an example of what savings can be made by different employees, one employee is a higher rate tax payer with National Insurance Contributions above the upper limit and the other employee is a basic tax rate paying between the lower and upper NIC earnings limit.


 

Higher rate tax payer paying NIC above upper earnings limit

Basic rate tax payer paying NIC between upper and lower limit

Value of Bike

£450.00

£450.00

Safety Accessories

£50.00

£50.00

Total Value

£500.00

£500.00

VAT at 20%

-£83.33

-£83.33

Salary Sacrifice - Cost to Employer

£416.67

£416.67

Employees PAYE saving through salary sacrifice

( £166.68 ) = 40%

( £83.34 ) = 20%

Employee National Insurance saving through salary sacrifice

( £4.17 ) = 1%

( £45.87 ) = 11%

Total cost to Employee

£245.82

£287.46




Salary Sacrifice

The salary sacrifice is an arrangement between an employer and employee. The employee will receive a lower salary for an agreed time period and in turn will receive a non cash benefit off their employer (so in this example it will be a bike and safety equipment).  The salary sacrifice time period is down to the employer and can be up to six years but 12 -18 months is common.

How Much can be saved?

Savings on the cycle to work scheme vary for both employees and employers.  For employees its dependant on the employees personal status, whether the employer is VAT registered.

What Safety Equipment is allowed?

Cyclists' safety equipment  could include:

Cycle helmets which conform to European standard EN 1078
Bells and bulb horns
Lights, including dynamo packs
Mirrors and mudguards to ensure riders visibility is not impaired
Cycle clips and dress guards
Panniers, luggage carriers and straps to allow luggage to be safely carried
Child safety seats
Locks and chains to ensure cycle can be safely secured
Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
Reflective clothing along with white front reflectors and spoke reflectors

How much can an employee spend?

The amount the employee is allowed to spend on a bicycle and safety equipment is down to the employer.  Despite there being no limit most employers are limiting the amount to £1000, this is due to the OFT have issued a Group Consumer Credit Licence for employers adopting the cycle 2 work scheme up to the value of £1000. This means that if the value of the bike and safety equipment exceed £1000 the employer will need to apply for a separate Consumer Credit Licence.

Where Will the Bike and Safety accessories be Delivered?

For security reasons the bike and safety equipment must be delivered to the cardholders address. If the Employer pays by cheque then the bike can be delivered to the employees address.

Who owns and pays for the bicycle and safety equipment?

The employer owns and buys the bicycle and safety equipment and then hires them to the employee for a fixed period. Once the hire period has been completed the employer has the option to sell the bike back to the employee.

Responsibilities of the Employee

The employee is to adequately insure their bike and safety equipment. The employee is also expected to maintain the bicycle.

Employees taking unpaid leave

If an employee takes unpaid leave the employer will extend the salary sacrifice period for a number  of months, usually up to 6 months.

What happens if he employee leaves their employment before the Hire Agreement ends

If the employee leaves during the salary sacrifice period the employer is allowed to claim compensation. The compensation is to cover the employers costs which have not been offset due to the non-completion of the salary sacrifice arrangement.  The compensation payment will be taken from the employees final net pay.

Ashcycles Cycle 2 Work Forms :