Bike to Work Scheme
At that cycling conference I went to a couple of weeks ago (the one I keep going on about, as if I don’t get out much . . .), Philip Darnton, Chair of Cycle England laid down a challenge to everyone attending:
YOU have to recruit two non-cyclists, and get ‘em on their bikes by the end of the year
He gave some advice on this - stuff like it’s easier to recruit the able bodied rather than Grandma Zimmer-Frame, but other than that, the gauntlet’s just been thrown down. I’ve got my eye on a couple of likely targets who work at one of my clients. One lives within a mile of work, and the other would have to ride about two miles each way. Perfect.
So far, they’ve come up with the usual excuses perfectly valid reasons for not riding:
- “I don’t want to get all sweaty” Uh, you won’t!
- “My bike’s got a problem with the gears” No problem at all - I’ll fix ‘em for you!
- “Ugh! It’s raining today, and I don’t want to get wet”. Actually, it was only raining from 10am to 3pm. As you work 9-5, you’d have been perfectly OK.
I think I’m wearing them down. 
Wife was away last week visiting friends in Derbyshire. Turns out, I’ve made her quite an bicycle evangelist too (like a TV evangelist, but without the hairspray. And with a bike). She found out that her two friends from University live within 2 miles of their offices, and immediately brought up the subject of hwo they could cycle that distance. They brought up a different perfectly valid reason for not riding [yet]:
- “Our company doesn’t yet have the Bike to Work scheme.”
Now I’m pleased to say that Wife didn’t let this stand in her way, pointing out that her bike came from Ebay for a massive £35. But there’s also something about getting a brand new bike at half its retail price.
Basically, the Bike to Work Scheme is a way for the government to subsidse people buying bikes, and using them to . . . uh . . . ride to work. The way they do it is by your employer buying the bike, and then leasing it back to you, so that you pay for it in small increments from your wages. After a set period, you own the bike. The clever bit is that the bike comes VAT-free (saving 15% from the retail price), and you pay for it from your wages before Income Tax and National Insurance. The exact saving this creates depends on your tax bracket, but it could work out like this:
| Basic Rate Tax Payer | Higher Rate Tax Payer | |
|---|---|---|
| Bike package retail price: | £1,000 | £1,000 |
| VAT saved | £148.94 | £148.94 |
| Income tax & NI saved | £280.85 | £348.93 |
| Monthly Repayments from Gross Salary | £70.92 | £70.92 |
| Net monthly payments | £47.52 | £41.84 |
| Total Net Cost | £570.21 | £502.13 |
The employer pays for the VAT-free price of the bike, and deducts the payments from your salary before Income Tax & NI. You just pay the net monthly amount, which means you save between 43% & 50% of the retail price. Now that’s not a bad saving. Of course, the fact that the basic rate tax payer ends up paying more for his / her bike than the higher rate tax payer (who already earns more) doesn’t seem entirely fair, but tax rebates always seem to be regressive.
Oh, and two last things: This scheme is only for those in Pay As You Earn (PAYE) employment, so if you’re self-employed (like ME), you can’t take advantage of it. Secondly, it only applies for bikes of up to £1,000 retail - unless that is, your employer wants to apply for a Consumer Credit License. That’ll cost them £725, but if you can pursuade them to get one, then that Felt DA could be yours for a snip over £2,000. Once you’ve fitted mudguards, panniers, and lights to it, I’m sure it’ll make the perfect commuting bike!
This web site has more details of the Bike to Work Scheme.
The bike to work scheme is great - I’m looking at getting a Specialized Tricross on the scheme.
Not everyone gets the VAT-free price though; only people whose employers are eligible to claim back VAT. I work for a sixth form college and, unfortunately, we pay VAT. I think hospitals also pay VAT.
It just so happens I produce the official, non-DfT Cycle to Work page. It’s consistently the top viewed page on Bikeforall.net.
There are very few businesses that couldn’t run with a Cycle to Work scheme. It tends to be an uncooperative HR dept, which can’t be arsed with the paperwork. But, of course, that’s what Cycle Scheme and the other third party facilitators do.
http://www.bikeforall.net/content/cycle_to_work_scheme.php
Is this program voluntary on the companies part or does the government force companies to participate? It sounds like a great idea to get people commuting to work.
It’s voluntary - basically you decide you want a bike at a big discount, and then go and badger the HR & Accounts department ’till they fill in the forms & get the company registered. Or as Carlton’s pointed out, they can subcontract the paperwork bit to organisations like CycleScheme.co.uk, and you still get your shiny new bike at a bargain price.
Heck, it’s almost as if the UK government’s serious about wanting more people getting to work on their bikes . . .
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I converted one person last year. Oddly enough, what was holding him back was the bike to work scheme - our HR had announced they were going to implement it, but they hadn’t got round to it yet. So he was waiting. Finally, he gave up waiting and got a bike anyway. AFAIK, HR are still writing their policy doc on it, and he reckons he’s already saved enough money in petrol to pay for the bike without the tax break.
So, need to find another soul. A bit difficult now I no longer work…