Employers Ride to Work Cycle Scheme

You can set up a Ride-to-Work scheme quickly and easily, and it’s absolutely free. In fact your new Ride-to-Work account can be up and running within one hour. If you have any queries call our helpdesk on 01293 572 325

How much will this cost the employer?

The only cost to the employer is the initial purchase of the cycling equipment which is then hired to the employee. The employer recovers the cost of the equipment via the salary sacrifice over 12 months whilst making savings on the employers NI contributions.

Would you like your scheme to be cash neutral? We can help you finance it so it doesn’t affect your company’s cash flow at all. Please contact us at ride-to-work@evanscycles.com for further details.

Paying for the equipment

As the employer you will purchase the cycling equipment from Evans Cycles and then hire it to your employees via salary sacrifice, enabling you to recover the cost over 12 or 18 months. The cost of the bike and accessories is typically the value of the salary sacrifice, up to a maximum of £1000.

There are 3 ways to pay for the equipment:

1. Pro-forma invoice – this is the default option for the majority of our clients. When you approve an employee application we will send you a pro-forma invoice by email. When this is paid we will send your employee their Ride-to-Work certificate, which they can redeem for their chosen cycling equipment.

2. Credit terms – if there are more than 10 employees wishing to join the scheme imminently we can provide credit terms. This means that as soon as you approve the applications we instantly email the certificates to the employees, and then send you an invoice for the amount of salary sacrifice with 30 days’ payment terms. Please contact us to arrange credit terms.

3. Asset finance - if you would like your scheme to be cost neutral without impact on cash flow we can introduce you to our asset finance partner, Akira Financial. This option means you will receive finance to fund the cost of purchasing the equipment on behalf of your employee. The cost of finance can be added to salary sacrifice, meaning there are no additional fees for the employer. For details contact ride-to-work@evanscycles.com

How the savings work

Employees:

Employees make savings via salary sacrifice. By reducing gross pay in exchange for the benefit (cycling equipment) employees do not pay income tax or national insurance on the part of the salary they have sacrificed. The maximum amount of salary sacrifice is £1000, although employees can choose to add their own funds on top of the salary sacrifice amount.

So in the example above a basic rate tax payer would pay £408 for £600 worth of cycling equipment, whilst a higher rate tax payer would pay £348 for that value of equipment. Plus they have the additional benefit of spreading the cost interest free through their salary.

We provide employees with a savings calculator

Employers:

Using the £600 example above the employer would make a national insurance saving of £82.80. This is based on 13.8% of the salary sacrifice amount.

Each time an employee enters salary sacrifice the employer will make a saving on their employer’s national insurance contributions. This is because total gross salary has been reduced and lower contributions are required from the employer.

Salary sacrifice

When an employee applies to join the Ride-to-Work scheme you will approve their application and then set-up the salary sacrifice deductions through your own payroll system. Typically the first deduction begins from the next payroll following approval to join the scheme.

For example, on a salary sacrifice of £600 over 12 months, the deductions will be £600 / 12 (months) = £50. This is the amount the employee will see on their payslip. This is the gross amount before tax savings, and the true cost to the employee each month would be £34 if they are a basic rate tax payer or £29 for a higher rate tax payer.

Salary sacrifice is the process which enables employees to benefit from the tax savings, and for employers to recover the initial cost of purchasing the cycling equipment.

The default salary sacrifice term is 12 months, but it can be up to 18 months. Employers can set the salary sacrifice term from the control panel within the Ride-to-Work system.

End of scheme process

The tax benefits available through the Cycle to Work scheme are provided on the basis that employers are hiring the equipment to their employees, with the employee paying the cost of the equipment out of their gross pay through salary sacrifice.

At the end of the salary sacrifice term, scheme guidelines require that any transfer of ownership takes place in accordance with the Fair Market Value. There are however different options for managing this end of scheme process.

One of the benefits of Evans Cycles Ride-to-Work scheme is our free and unique Transfer4You service. At no extra cost, Evans Cycles will manage the end of scheme process entirely, giving employees the option to continue to use the equipment free of charge.

For employers Transfer4You ensures there is no end of scheme administration whilst also ensuring maximum scheme savings for employees without any further charges or deposits. When reviewing scheme providers, it is important to understand how end of scheme charges are applied.

We work with thousands of employers nationwide. They have chosen Evans Cycles Ride-to-Work for our easy-to-use online system and outstanding account management, plus the peace of mind that their employees can benefit from expert service, quality products and fantastic savings from a single provider.

We offer your employees the convenience of shopping at any of our bike stores nationwide, online or over the phone with Click & Collect or home delivery. We also partner with local bike shops where an Evans Cycles store is not available.

Our clients are large and small and operate across all industry sectors. They include City of Edinburgh Council, Citi Bank, easyJet, Facebook, London Fire Brigade, Mercedes, Metropolitan Police, and Virgin Media. We also work with many leading employee benefits providers.

How does my organisation apply for an account with Ride-to-Work?

If you are an employer, you can apply for an account here

Who does the equipment belong to?

It belongs to the employer and is hired to the employee for the term of a Hire Agreement.

What happens at the end of the scheme?

There are several options open to the employer regarding transferring ownership and allowing on-going use of the bike. Refer to End of Scheme Transfer of Ownership for further details.

How much will this cost the employer?

The employer purchases the cycling equipment from Evans Cycles and recovers the cost from the employee via salary sacrifice. Therefore the initial cost of the equipment is fully recovered over 12 months. The employer will also make a corresponding saving in employers National Insurance Contributions based on the amount of salary sacrifice made by employees participating in the scheme.

If the employer does not wish to make the upfront purchase of the equipment we can introduce our finance partner, who is able to provide funding which will make the scheme cash neutral. For further detail on funding email ride-to-work@evanscycles.com

Does the employer need to apply for dispensation from HMRC to provide Ride-to-Work?

No. We provide all the necessary forms and agreements.

Does my organisation need credit authority to offer the scheme?

No. The Financial Conduct Authority states that a Cycle to Work Scheme does not require it’s authorisation where the total amount of an employee’s salary sacrifice does not exceed £1,000.

To offer your employees an improved benefit with a higher limit you will require Consumer Credit Authorisation, which can cost as little as £100. Read our useful advice guide for further information.

What are the rules regarding maternity leave?

If an employee goes on maternity leave during the salary sacrifice period and their salary falls below NMW the employer has the option to initiate a repayment holiday or to continue with payments. Employers would need to supply the employee with an amendment to the hire agreement for signature. The Office of Fair Trading rules state that if the hire agreement term runs over 18 months the employee has a right to cancel the contract and therefore employers need to keep this in mind when extending the term of the salary sacrifice. Employers are not liable to make the payments while the employee is on maternity leave.

I am self-employed - can I join the Ride-to-Work scheme?

You must be paid via PAYE to make the salary sacrifice.

Would an employer be liable?

This is highly unlikely. Read our fact sheet.

What happens about stolen bikes and insurance?

Insurance of the bike and equipment is the employees' responsibility. We recommend Evans Cycles Insurance which is a low-cost comprehensive insurance policy for cyclists.
If a bike being hired through the scheme is stolen we generally recommend that it can be replaced via insurance for the same or similar product where the employer is happy to accept this. Replacement bikes should continue to be used for the purpose of cycling to work for the remaining duration of the hire agreement.
In cases where the equipment is not insured the employer generally requires the balance of outstanding payments to be made. No Fair Market Value fee is required on stolen cycles.

Who is responsible for maintaining the bike?

It is the employee’s responsibility to maintain the bike. Evans Cycles offers a free bike check-up after 6 weeks and all stores operate a full workshop service. And don’t forget all employees joining Ride-to-Work receive two free services during the first year of using their new bike.

What happens if an employee leaves before their salary sacrifice is completed?

If an employee leaves before completing their salary sacrifice term, any balance remaining should be repaid from the employee’s final net salary, i.e. without the tax/NI savings. This reflects the early termination clause contained within the Ride-to-Work hire agreement.
It is expected that the employee will wish to take ownership of the bike at the same time and the employer can choose:

• To collect the applicable FMV of 18% or 25% of the original value, dependent on whether the original value was below £500 or above £500 (as per HMRC table below)
• To declare the FMV figure as a benefit in kind on a P11d
• To transfer the equipment to Evans Cycles earlier within the Transfer4You arrangement

If you are collecting FMV please note:
Employers can choose to collect a lower amount of the final balance plus FMV in order to equal the total amount due to the employer for the original purchase of the equipment. This way the employee is not charged more than is necessary and the employer is not out of pocket.
For example:
£1000 bike = £83.33 per month Employee leaves after 9 months with an outstanding amount of £249. Employer could collect FMV (£250) in place of the outstanding balance.
Employee leaves after 5 months with an outstanding amount of £583. Employer could collect FMV (£250) and £333 outstanding balance.

There are no benefit in kind implications with not collecting the full salary sacrifice balance. FMV must be collected otherwise there are benefit in kind implications. A letter should be provided to the employee confirming that FMV has been collected which transfers ownership to the employee.