The Cycling Minister, Michael Ellis, has announced a number of changes to the Cycle to Work scheme in an announcement that was timed to coincide with Bike week. Bike week is an annual celebration to showcase cycling across the UK and runs from 8 – 16 June.
The Cycle to Work scheme was introduced almost 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly and more active mode of transport. This can also speed up commuting time and cut travel costs for many employees.
The changes to the scheme will encourage the use of electronic bikes known as e-bikes. E-bikes have an integrated motor that helps a cyclist pedal, allowing them to reach speeds of up to 15.5 mph in the UK. The use of these bikes widens the appeal of biking to a wider demographic including those that are older or less fit and encourages a new way to commute to work. The use of e-bikes is increasingly popular and 70,000 were sold in the UK last year.
New government guidance will also make it easier for employers to provide cycles and equipment including e-bikes worth over £1,000 by making it clear that FCA authorised third party providers are able to run the scheme.
Employers of all sizes across the public, private and voluntary sectors are eligible to take part in the scheme to provide (technically loan) bicycles and cyclists’ safety equipment to employees as a tax-free benefit. Where the scheme conditions are satisfied, employees can benefit from a tax and National Insurance Contributions (NICs) reduction of between 32% and 42% through a salary sacrifice scheme. In addition, there is no employer liability to NICs.