Nearly a year ago, I wrote about an interesting client of mine in my ‘peddling innovation’ blog. If you missed it, Mark Searles has developed a unique battery-powered solution that can be retro-fitted to virtually any bike. So, I thought I’d revisit the cycling world and specifically, the Bike to Work scheme.
The ‘Bike to Work’ scheme has been around for 20 years and is one of the few salary sacrifice arrangements that is still allowed, following significant tightening of the rules in recent years by HMRC. So, what are the headline tax benefits?
- The employee’s salary is reduced by the sacrificed amount, meaning they don’t pay income tax and NIC on the sacrificed amount (normally a minimum saving of 32%!)
- The employer also benefits, as they save the employer NIC (13.8%), as well as potentially being able to claim the VAT, so another 20%.
These are just the tax benefits, but what about the added benefits of healthy staff, improved efficiency in the workplace and the all-important environmental benefits? These intangible benefits could even outweigh tax savings in the long run.
You can find the Bike to Work scheme offered by most of the big retailers and other specialist shops. Check out this Cycling Weekly article for more information on the different options.
I was personally involved in a bike to work scheme, which saved tax at the time, but it also got me involved in Ride on Nelly, a great event near Andover that we continued to be involved with again September this year. This was the fifth year we supported the event and look forward to it again in 2020.
Now might not be the best time to start your scheme, as winter draws in, but it may be worth getting everything set up now so that you can start dreaming about your new bike in the spring!
And finally, if you want a bit of battery power for your commute to make it just that little bit easier, then you could add a Cytronex kit, which Mark recently did before taking on the climb of Mont Ventoux – the highest Tour de France climb – on a Brompton bike!
Author: Ross Garfitt, Director, Langdowns DFK