Alpine Bikes - Cycle to Work

Frequently asked questions

The Cycle to Work Scheme is a Government green transport initiative that allows your employer to offer employees the option of hiring bicycles and cycle equipment via a salary sacrifice without having to pay Tax or National Insurance contributions on the payments. This saves most standard rate taxpayers 32% (42% for higher rate) on the cost of a bike while spreading the cost over 12 months.

If you wish to take advantage of the scheme, your employer purchases a bike and safety equipment of your choosing and loans it to you over a period of 12 months through a salary sacrifice. This nominated amount will not be subject to Tax or National Insurance deductions. A Salary sacrifice is a legally binding change in the contractual arrangements between employee and employer.

A salary sacrifice occurs when an employee agrees to a reduction in pay in return for the employer providing a non cash benefit. The reduction comes out of the employee's gross, rather than net pay. This causes a reduction in income tax and National Insurance payments, which is where the savings are made.

At the end of the hire period, your employer may seek to transfer ownership of the bicycle equipment at a fair market value. Please note that this cannot be guaranteed until the end of the hire period, but takes place in the majority of cases.

In order to benefit from the Tax and National Insurance savings the bicycle must be used primarily for journeys to and from work or between work sites.

Employees who have contracts of employment that outlast the duration of the salary sacrifice period. In Scotland employees need to be 16 years or over. Employees must pay tax via the PAYE system. Employees must not drop below the minimum wage once the loan repayment has been deducted. You may wish to contact your HR department to confirm your eligibility to join the scheme.

Some employers offer the scheme year round while a small number of companies allow you to apply for the scheme during a designated window of time. Enquire with your HR department.

The bicycle must be suitable for travelling to and from work. For this reason children’s bicycles are not available to hire under the scheme. All other types of bikes are suitable to choose under the scheme. There is typically a £1,000 limit on the total cycle and accessory value however, some employers have a higher limit or allow you to pay the difference at the point of collection. Ask your HR department for more information.

Normally, only one bicycle can be hired per employee. However a second bicycle can be made available under exceptional circumstances at your employer's discretion. For instance, you might want to cycle from home to your nearest railway station and lock the bike there. Then you pick up the second bike at the station where you get off the train to complete your commute.

• Helmets
• Bells and horns
• Lights
• Reflective clothing including jackets, gloves and over trousers
• Trouser bands / clips
• Panniers, luggage carriers and straps to allow luggage to be safely carried
• Locks and chains to ensure cycles can be safely secured
• Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs.

Please note that this is not a comprehensive list of the safety equipment you can choose. The combined value of the bike and accessories can be anything up to £1000 however if your employer has a consumer credit licence you may be eligible for more.

There are a few exceptions that are expressly not available under the salary sacrifice scheme. These include:

• Magazines and books
• Maps
• Food and drink
• GoPro cameras or similar
• Car bike racks
• Bicycle storage equipment.

No, you are unable to choose a bike frame on the scheme, a complete bike must be a part of the hire agreement.

Depending on your scheme provider. Cyclescheme offers an accessory only package for a minimum of £250.

No, if you only require a bicycle and currently have all the related safety equipment you need, it is not a requirement that you must choose safety equipment.

As the bicycle equipment will belong to your employer you must:

• Make sure that the bicycle equipment is insured. The easiest way to do this is to get it added to your household contents insurance, if it is not already covered. Replacement equipment is not available under the scheme. If the bicycle equipment goes missing or is damaged, you will still have to pay the monthly amount for the remaining months of the Hire. Remember to always lock your bike up securely and ask your employer about secure bicycle storage facilities at you workplace.
• Keep the bicycle equipment clean and in good order.

The following rules apply so that you don’t pay tax on this benefit:

• The bicycle equipment is used primarily by you to commute to work.
• The bicycle equipment remains the property of your employer.

With most Cycle to Work Schemes you will have a maximum hire of £1,000, although this may vary depending on your employer. Please contact your HR department or refer to your staff intranet site for more specific information.

Once the Hire Agreement is received and authorised by the employer you are committing to the full repayment period. The Hire Agreement is regulated under the Consumer Credit Act and is not cancellable. The only exception is where your employment ends before the bicycle equipment has been collected and your employer has contacted the Alpine Bikes to inform them of this.

It is your responsibility to insure the bike against damage and theft. If the bike is damaged or stolen the hire agreement is not cancellable and you will still be required to pay for the bicycle and safety equipment hired. If damaged, you will also be required to pay for repairs.

Bikes can be covered by your household content insurance and treated like any other possession. Check your insurance policy and make sure it covers the bike nationwide and that it pays for a replacement in case of a "total loss".

Insurance companies such as Endsleigh or Cyclecover (Butterworth) cover you in case of loss of or damage to cycle and accessories in a crash, theft of cycle and accessories (but not theft of accessories alone) and malicious damage.

CTC (National Cycling Association) members benefit from third party liability, legal aid and personal accident cover.

Although you will have full use of the bike for the period of the hire, in order to obtain the tax advantages it is a requirement that ownership of the bicycle remains with your employer.

You will have to repay the outstanding amount that is left to pay from your final payslip. However, this amount will not be tax-free as it will be taken from your net salary.

So, for example, if you leave a year into the hire agreement for a £500 bicycle, and you have paid £300 so far, you will have to pay the remaining £200 outstanding on the bicycle. You will not be entitled to receive the Tax and National Insurance savings on this outstanding £200. However, you will still have benefited from saving the Tax and National Insurance contributions on the first £300.

If your final salary does not cover the outstanding amount, you will be sent an invoice for the remainder of the balance.

Please think very carefully before joining the scheme. If you think you may leave employment with your employer before the period of hire is over, it is not recommended you join.

Your first service is complementary. We recommending booking your bike after 6-8 weeks of use. During the breaking in process, cables will stretch requiring small adjustments to be made. Please contact your nearest Alpine Bikes store to schedule.

When you choose your bicycle equipment, Alpine Bikes can advise you of the warranty period, as they vary with each bicycle. If you experience problems within the duration of the warranty period, take your bicycle back to the Alpine Bikes who will liaise with the supplier on your behalf.

After the period of hire in which your salary was deducted, your employer may seek to transfer ownership of the bicycle/equipment for a fair market value. Please note that your employer cannot guarantee it will sell the bicycle/equipment to the person who has hired them but this is usually the case. The end of hire agreement is agreed between the employer and employee. Contact your HR department for more details.

Yes, there may be an impact on your entitlement to benefit payments such as Statutory Maternity or Paternity Pay, Statutory Sick Pay and Working Tax Credit, as they will be calculated on your reduced pay. There may also be an impact on your state pension. We advise you to seriously consider the effect that a reduction in pay may have before you decide to join the scheme.

No. The scheme is set up so that under the current tax rules you do not have to pay tax on the benefit and therefore you do not have to notify HMRC.