Cycle to Work Scheme Explained

The Cycle to Work Scheme - links to the official documents

This page is a continuation of London Analytics' guidance, following on from our notes on the advantages to workers and to companies of the Cycle to Work scheme.

To promote healthier journeys to work and 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 exemption was one of a series of measures introduced under the Government's 'Green Transport Plan'.

In November 2004, the Department of Health published their white paper Choosing Health: making healthier choices easier, which makes a commitment for the Department for Transport [DfT] to work with the cycle industry to produce guidance to promote and implement this tax benefit.

The DfT has therefore produced implementation guidance in co-operation with the Department for Trade and Industry, the Office of Fair Trading, HM Revenue & Customs, and the cycle industry.

Caveat

Note that these notes on the Cycle-to-Work scheme are provided for guidance only, and reflect the tax position at the time of writing, and the law as it relates to the provision of consumer credit. If salary sacrifice is used to pay for the hire of the cycle, your pension and earnings-related benefits may be adversely affected, and the scheme must be a regulated hire agreement between employer and employee.