Cycle Scheme is a very popular programme which allows buyers to purchase a new bike and optional accessories (collectively referred to below as a ‘package’) and save up to 39% depending on your tax rate.
How Cycle Scheme Works
In a nutshell, your employer must be enrolled with Cycle Scheme and must be accepting applications for new packages - if your employer isn’t enrolled you can give them a nudge over on the Cycle Scheme website. Cycle Scheme is a fantastic programme which allows employers to provide cycles to their employees for commuting to work or for improving the general wellbeing of their employees.
You pay for your package through directly from your monthly salary over twelve months, however, the deduction is made from your gross salary, so you make income tax and national insurance savings (32% standard rate, 42% higher rate).
Technically, you are hiring the package from your employer for the first year and you can then opt to take ownership of the bike thereafter however there is a fee (see table below) to do so however you can get around this by waiting for a further 36 months (during this time you are still hiring the bike fee-free) after which ownership can be transferred to you at no extra cost.