We’re pleased to announce we are now participating in the Bike2Work scheme!
You can find out more information about it here.
How to join the scheme:
To participate in the Bike2Work scheme you need to be earning enough to pay both NI and tax on your monthly/week wage (your payslip shows this information). You also need to be earning at least minimum wage through PAYE after the salary sacrifice is taken from your wage each month/week, so please consider the value when choosing a bike.
HMRC & Department of Transport guidelines state that in order to make savings through the scheme, employees must enter into a hire agreement and not a purchase agreement. There can be no guarantee of transferring ownership to the employee once the hire agreement has ended. Therefore, at the end of the agreement the ownership of any items obtained through the scheme does not transfer to the employee automatically.
At the end of the agreement, Bike2Work Scheme become the owner of any items obtained through the scheme. We would then contact each employee individually and offer them the opportunity to take ownership at the cheapest price, using the HMRC fair market valuation table.
Example: For a £500 bike over a 24 month salary sacrifice (based on NI rates from November 6 2022)
The company would pay the £500 to bike2work and claim back £500 spread over 24 months = £20.83 per month or £4.81 per week from your gross pay.
After 24 months the employer would have received the full £500 back through your gross pay but the employee would have saved 32% on their tax and National insurance.
£500 /24 = £20.83 per month
Employee saves Tax and NI of 32% = savings of £166.25
Bike will cost as the end of the 24 months = £500 – £160 = £340
On the 13 or 14-month Bike2Work will email the employee offering them the ownership of the bike in this case, following HMRCs fair market table (attached), the balance to pay would be 13% of the £500 which works out as £65.
This means over all the bike plus ownership would cost £405 making you savings of £95.