22 Oct, 2014
Would your business benefit from the government backed cycle to work scheme? This scheme will enable eager businesses to loan cycles and the associated safety equipment as a tax free benefit, thus not becoming a “benefit in kind”.
What’s in it for your business?
There are numerous advantages of such a scheme and they are not limited to just the individual but also to the company. These can include:
- Becoming more environmentally friendly. If employees are able to cycle to work instead of driving then this would reduce the amount of CO2 emissions.
- A healthier workforce who can potentially lead to improved attendance and productivity.
- It is a marketable activity for the business which may help attract new staff. If the business is seen by prospective employees as looking after those who work for it then it could make a difference when trying to appeal to the desired applicants.
- The initial cost to the business can be treated as a capital expenditure and so capital allowances can be claimed against it. In doing so reducing the company’s taxable profit.
- Colleagues can save money on the equipment bought, as well as parking and fuel bills.
- Reduce the amount of time that colleagues spend in traffic. This will mean a happier workforce and potentially a workforce that is at a reduced risk of being late.
Who and what is eligible?
Businesses of all sizes are eligible, however, unfortunately the schemedoes not include the self-employed. The following equipment is available under the outline:
- A cycle with any number of wheels that is not assisted by any kind of motor,
- Bells and lights,
- Luggage carriers,
- Locks and chains,
- Pumps and repair kits,
- Reflective clothing.
How to implement a cycle to work scheme
There is nothing stopping a business implementing a scheme themselves but that does mean that they would have to receive cover from a consumer credit licence and a salary sacrifice agreement.
That being said, there are numerous providers of the scheme who will take care of that side of the process. Examples of which are Halfords, Evans Cycles and CycleScheme. The process for which can vary but the main process is as follows:
- Contact a selected provider and fill in all the required documentation.
- Buy the cycle and/or cycle equipment.
- Reclaim the VAT.
- Claim the capital allowances (Done whilst completing the business tax return).
- Deduct the annual cost to the employee from their annual salary. Thus meaning they won’t be required to pay National Insurance or Tax on the amount being loaned.
What happens after the salary sacrifice period?
Once the period of hire by the employee from the company has elapsed, the employee has the option of purchasing the cycle and/or equipment at fair market value.
A more in depth explanation of the scheme can be found on the gov.uk website here.
For more information regarding additional ways in which your business can become more environmentally aware and save money at the same time, take a look at the ISO 14001 Environmental Management Standard or our Environmental Manager training course. Conversely you can call our head office on 01905 670303.
ISO Quality Services Ltd are proud to specialise in the implementation and certification of the Internationally recognised ISO and BS EN Management Standards.
Do you want to get ahead of your competition? Win more tenders or save time and money on reoccurring issues? Contact us today on 0330 058 5551 or email email@example.com.
Alternatively, you can request a quote by filling out our enquiry form and a member of our team will be in touch shortly.