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There is no cost to the employer for setting up the Cycle to Work scheme. The employer is buying the equipment (a bike and / or cycling safety accessories), then hiring it to the employee over the term of a hire agreement.Back to Cycle to Work home
If you require further assistance you can email firstname.lastname@example.org
At the end of the salary sacrifice period ownership does not automatically transfer to you. HMRC states that if you wish to take ownership immediately there is a fair valuation fee (Fair Market Value) that needs to be paid as listed below.
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 hire period:
|Age of cycle||Acceptable disposal value percentage|
|Original price less than £500||Original price £500+|
|18 months||16%||21 %|
Most employers prefer to maximise the benefit by offering two options instead of the above.
Check with your employer which end of scheme option applies or speak to the Ride-to-Work helpdesk for further advice.
There is no cost to the employer for setting up the Cycle to Work scheme. The employer is buying the equipment (a bike and / or cycling safety accessories), then hiring it to the employee over the term of a hire agreement.
Hire payments are made via salary sacrifice, usually over 12 months, up to a maximum of 18 months, until the full amount is recovered.
You will make a corresponding saving in employers National Insurance Contributions based on the amount of salary sacrifice made by employees participating in the scheme.
No. The Financial Conduct Authority states that a cycle to work scheme does not require a Consumer Credit Licence where the total amount of an employee’s salary sacrifice does not exceed £1,000.
If you would like to allow your employees to salary sacrifice over £1,000 you will need to apply for your own Consumer Credit Licence.
If an employee goes on maternity leave during the salary sacrifice period and their salary falls below NMW the employer has the option to initiate a repayment holiday or to continue with payments. Employers would need to supply the employee with an amendment to the hire agreement for signature.
The Office of Fair Trading rules state that if the hire agreement term runs over 18 months the employee has a right to cancel the contract and therefore employers need to keep this in mind when extending the term of the salary sacrifice.
Employers are not liable to make the payments while the employee is on maternity leave.
Insurance of the bike and equipment is the employees' responsibility.
If a bike being hired through the scheme is stolen we generally recommend that it can be replaced via insurance for the same or similar product where the employer is happy to accept this. Replacement bikes should continue to be used for the purpose of cycling to work for the remaining duration of the hire agreement.
In cases where the equipment is not insured the employer generally requires the balance of outstanding payments to be made. No Fair Market Value fee is required on stolen cycles.