Cycling to work: an introduction for employers

Cycle-to-work schemes help employers encourage staff to commute to work by bike through tax and national insurance incentives. The same rationale applies of course to the employee, who will cycle to work if they are incentivised to do so.

The initiative first saw the light of day in 1999 when a tax exemption for employers and employees who participated in cycling to work was introduced. The government branded the scheme “Cycle to Work” in 2005, and an estimated 3-5% of UK workers now commute by bike on a regular basis.

Employers – do your homework

On the face of it, running a cycle-to-work scheme seems simple enough, but there is the occasional pothole for the unwary as there are in the UK’s roads. These are detailed throughout this guide, but suffice to say that most employers who offer cycle-to-work use the services of a third party supplier to offload nearly all of the hassle.

In the first instance, employers really need one or more people of standing to champion a cycle-to-work scheme and staff who will look after it. Initially they will need one or more persons to research the issue and produce sound advice and guidance on how to introduce a scheme, how to make it a success and how to keep it running.

You’ve already found the best place to start, but you should certainly read the Department for Transport’s Cycle to Work Scheme implementation guidance, which gives chapter and verse on the issues that must be addressed when implementing and running a cycle-to-work scheme. Topics covered include:

  • Eligibility
  • What equipment is included in the tax exemption
  • What value of equipment can be supplied
  • Setting up a scheme
  • Salary sacrifice
  • Withdrawing from an agreement
  • What happens to a bike at the end of an agreement
  • Consumer credit law
  • Details on how to get approval for a cycle-to-work scheme (in theory this is not needed)
  • Tax and national insurance consequences of introducing a cycle-to-work scheme
  • Mileage allowances.

This list gives some idea of the complexity of offering and running a cycle-to-work scheme, but the benefits are clear – as some early adopters have discovered.

Experiences of employers offering cycle-to-work schemes

Notting Hill Housing arranged its cycle-to-work scheme through the London Cycling Campaign (LCC), a charity promoting cycling in London. “The LCC gave us lots of useful advice on setting up a scheme and put us in touch with Halfords, so it was all really easy for us,” says Rachel Bhageerutty, communications manager.

“Our staff live anything up to 15 miles away and have taken advantage of the scheme to buy the bikes of their dreams. We also offer a large storage area for locking up bikes and showers and drying cupboards for staff who cycle in.”

Some 75 of Notting Hill Housing’s 600 staff have used the scheme to purchase bikes since its introduction in 2008.

North Lincolnshire County Council implemented a cycle-to-work scheme in 2010, with the help of benefits provider P&MM.

Councillor Mick Grant, cabinet member for housing and strategic planning, and a keen cyclist, says: “The scheme was marketed internally and although initial take-up was light, it proved popular. The council has continued to promote the benefits of taking part in the scheme – cycle-to-work is now established as a key part of our employee benefits offering.”

More recently, in October 2009, the Department for Transport (DfT) threw more weight behind the scheme. To encourage more employees to sign up it introduced the Cycle-to-Work Guarantee Scheme. Public and private sector employers who sign up for this non-compulsory initiative commit themselves to delivering the following five points:

  • Secure, safe, and accessible bike parking facilities for all staff who want them
  • Good quality changing and locker facilities for all staff who want them
  • Offset the cost of cycling equipment and save on the tax through the ‘Cycle to Work scheme’
  • Bike repair for cyclists on or near site
  • Training, reward and incentive programmes to achieve targets for more cycling.

Photo: RexThe then transport secretary Andrew Adonis said at the time: “If proper facilities were more widely available, I believe far more people would cycle to work. At present, only 3% do so. We could double or treble that figure with proper bike storage and changing facilities and safe cycle routes – and that’s my aim.”

Signatories to the Cycle-to-Work Guarantee Scheme so far include most central government departments, some local authorities and hospitals, plus major private companies such as BSkyB and GlaxoSmithKline. The DfT says more than 300 employers have signed up, but it has to be said though that the scheme’s appeal is largely restricted to large employers who can afford bike sheds and showering facilities.

 

Next: Ten reasons why employers should have a cycle-to-work scheme 

 

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