FEATURE


GREEN BUSINESS


O bike n your


With a growing concern for the environment and the rise of the corporate social responsibility movement, the Government’s Cycle to Work scheme may be the answer for employers looking to increase the wellbeing of their staff while doing their part for the planet. Business Network explores how employers can get on board.


In his 2016 Autumn Statement, Chancellor Philip Hammond announced that the only employee benefits that won’t be taxed in full are pensions, childcare and the cycle to work scheme – bad news for any employee with a work gym membership, but good news for companies wishing to promote a healthier, greener way for their employees to commute. The Cycle to Work scheme is a Government tax


exemption initiative that was introduced in the Finance Act 1999 to promote healthier journeys to work and to reduce environmental pollution. The scheme is relatively straight forward –


Cycle to Work allows an employee to get up to £1,000 worth of bike and safety equipment through their employer by hiring it through a salary sacrifice scheme (without paying tax or National Insurance on the monthly fees) typically over a 12-to 18-month period. Because the scheme was set up to promote cycling to work, rather than cycling in general, the employer technically remains the owner of the bike. At the end of the ‘hire’ period, the employee can then purchase the bike outright for its Revenue & Customs (HMRC) approved Fair Market Value or return it to the employer. Employers do not need prior authorisation from HMRC to take advantage of Cycle to Work or to operate a salary sacrifice scheme.


38 business network April 2017


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