Cycle Solutions enables you to get a tax-free bike. By covering the cost of the bike through a salary sacrifice, most people save about 39% of the cost. But, if you pay higher-rate tax you could save more. It's simple! Check out our video for more details

The smarter way to buy your new bike & cycling gear

Frequently Asked Questions

What is the salary sacrifice element of the Cycle Solutions scheme?

The salary sacrifice happens when you give up the right to receive part of your salary due. This is neither a deduction from salary nor is it a charge on salary; it is where you agree to accept a lower amount of salary, in return for your employer providing you with the non-cash benefit of the bicycle and safety equipment. For a benefit such as a hired bicycle, where there is a specific tax exemption, the employee can receive a tax and NIC-free benefit instead of salary on which tax and class 1 NIC’s would have been fully payable.

Do I have to pay VAT as well?

An update from HMRC published on 29th July 2011 clarifies that from 1st January 2012 VAT will be applicable to salary sacrifice arrangements.If you are already enrolled on the cycle to work scheme and have salary sacrifice arrangements that extend beyond 1st January 2012 you may therefore be required to pay VAT.Call us on 0330 100 2480 for details.

If I take up the scheme will I have to go through any credit checks?

No. Provided you meet the eligibility criteria set by your employer then there are no other checks required.

As it is a benefit do I need to tell the taxman?

No. The scheme is set up using tax rules that exempt you having to pay tax on the benefit and therefore you do not have to notify the Inland Revenue.

What is the impact on my pension or other benefits?

The likelihood is that any effect of a reduction in your cash pay may well have a small effect in the following areas:

  • Any pension scheme being contributed to (in particular this may be important if you are nearing retirement and have a final salary pension scheme)
  • Entitlement to contribution based benefits like a State Pension
  • Entitlement to earnings related benefits like Maternity Allowance
  • Entitlement to work related payments like Statutory Sick Pay

What happens when I have finished the payments?

You will have an opportunity when you complete your online Hire Agreement to agree to continue to use the equipment for a further 5-years beyond the completion of your salary sacrifice hire period. This extended usage agreement (which will be directly between you and Cycle Solutions) costs absolutely nothing. So you will benefit in full from the savings you make during the salary sacrifice period. If you take ownership of your bicycle and/or equipment at the end of the extended rental period, the fair market value of the bicycle will be negligible so there will be nothing extra to pay.

Alternatively, if you prefer you may also have the opportunity at the end of your salary sacrifice period to choose one of the following options:

  • The bicycle and equipment can be returned to Cycle Solutions.
  • You may be able to purchase the bicycle and equipment for a one-off fair market value payment.

If you would like to discuss these options, and any others that may be available to you, please call Cycle Solutions on 0330 100 2480

What if I leave the company during the Cycle Solutions scheme?

You will be required to pay any future outstanding gross salary sacrifice amounts as a lump sum from your final net salary payment; such a payment cannot be taken from gross pay.

If your final salary will not cover the entire final balance payment due, then you will need to pay your employer the balance owed over and above your final salary payment within 14 days of you leaving.

If you are made redundant, the rules of the scheme mean that you will be treated as a leaver and therefore the above will also apply.

I will be retiring before the end of the hire agreement period can I still participate?

Yes, however, when you leave you will have to settle the outstanding balance from your final net salary payment, in the same way as a leaver described above

What if I can't afford to carry on with the scheme?

The rules set by the Inland Revenue are that once you have agreed to a salary sacrifice for the period of the hire of the bicycle, you do not have the option to revert back to the original salary until the hire period is up. So, if you agreed to the hire for 12 or 18 months then you cannot go back to original salary during that period.

What happens if I go on unpaid leave?

If you take any form of unpaid leave such as extended maternity or sickness your employer may agree to extend the hire period by the number of months you were not being paid.

What is the cost benefit to my employer?

Your employer will save secondary class 1 NIC contributions on that part of the employee's gross salary sacrifice. This saving will be used to offset the costs of implementing and running the scheme

What do I do if the bicycle is damaged or parts are missing when I receive it?

Contact the Customer Care team who arranged delivery on 0330 100 2480.

How is the market value for a bike obtained through a Cycle to Work Scheme calculated?

HMRC has published the following ‘Valuation Table’ to be used to calculate the market value of bicycles and safety equipment at the end of the ‘salary sacrifice’ rental period:

Will I be offered ownership at the end of the hire period?

In order to preserve the tax benefits of the scheme, there can be no guarantee or obligation to transfer ownership to you (the employee) immediately after the hire period has ended. However, employers often choose to offer this option, either directly or via Cycle Solutions.

Can employees still make a saving?

At the end of the hire period, Cycle Solutions will contact you to discuss the options available.The most attractive option for most employees is a zero-cost extended hire period where they can continue to use the bicycle for an extended period of up to 60 months.At the end of this period, no further action or payment is required, and the bike ownership is automatically transferred.

If I extend the hire period, what are the monthly payments?

The monthly payments are zero. There are no further salary sacrifice payments or hire charges due during the extended use period.

Will I have to pay more when the extended hire period ends?

No, there are no further payments after the extended hire payment. If you are offered ownership by Cycle Solutions at this point, no further action or payment is required if you wish to keep the bicycle. You will have the option to return the bicycle if you no longer wish to keep it.

Can an employee participate in a new cycle to work scheme during the extended hire agreement period?

Yes, an employee is free to participate in future Cycle to Work schemes offered by their employer. The Extended Hire Agreement is not a salary sacrifice arrangement and no further payments are required from the employee.

If the employment status of a scheme participant changes, what happens?

During the extended hire agreement period, the employer has no responsibility to contact Cycle Solutions, as the agreement is between Cycle Solutions and the employee. It makes no difference if you (the employee) change your job during the extended use period.

What if the bicycle is lost, stolen or damaged?

By signing the Extended Hire Agreement, you are committed to insuring the bicycle and equipment against theft, fire or accidental damage. Even though Cycle Solutions owns the cycles and safety equipment during the extended hire period, the agreement places the onus on you to have the cycle covered.

We recommend that you contact the company that provides your home contents insurance policy as they will be able to advise whether the bicycle can be covered under the existing policy terms.We are also able to provide employees with details of a number of cycle specific insurance policies should you wish to take out separate insurance for the bicycle and equipment.

What if I have an accident whilst riding the bike?

The extended hire agreement that you will be required to sign stipulates that it is your responsibility to ensure that the bicycle and equipment is maintained and used safely.

What if I have a problem with using the bicycle and safety equipment?

Call the Cycle Solutions (Cycle to Work) Limited helpdesk on the number advised and they will be able to assist with sorting out the problem. If it is equipment you installed yourself, either the Helpdesk will assist or, if it is not common equipment you may be asked to call the supplier of the equipment.

What if something goes wrong with the bicycle during the hire period?

All bicycles supplied direct through our online store come with a full 18 month warranty. In case of problems please call our technical support team on 0330 100 2480.

The smarter way to buy your new bike & cycling gear