Cycle to Work scheme: legal Q&A

One of my staff wants to purchase a bike through the ‘Cycle to Work’ scheme, but I’m worried about the safety implications. What are my legal responsibilities, how much will it cost us and how can we go about doing this?


This question always crops up at this time of year when the sunshine prompts a flurry of employees wanting to start cycling to work.


Companies keen to promote their own green credentials should welcome them with open arms, as a major component of most corporate social responsibility policies is the environmental footprint of the business.


Employers will benefit from the health aspects of their employees cycling to work (healthy workforce equals lower absence equals higher productivity). They could also improve their employer brand as the government offers an annual tax exemption that allows employers to loan employees cycles and cycling safety equipment as a tax-free benefit.


Employees may buy their bikes through the tax-efficient ‘Cycle to Work’ scheme, which means that they can save money on the cost of the bike and you can reduce national insurance contributions.


Cycle to Work allows your employees to benefit from a long-term loan of bikes and commuting equipment, such as lights, locks and panniers, completely free of tax.


With a budget of, say £400, an employee in the high tax band could afford a bike and accessories worth nearly £800. The typical saving for an average taxpayer is 38%-45%. And there are online calculators to help you work out how much your employees can save.


There is currently no such requirement for companies to provide bike sheds or showering facilities, but it is good practice to reduce the possibility of thefts. Most employers insist that a cycle used for work is insured by the employee.


By Vicky Bennett, head of employment at law firm Heatons





 

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