What is the Cycle to Work scheme? What are the conditions?
This is a freeview 'At a glance' guide to the Cycle to Work scheme.
At a glance
The Cycle to Work scheme permits an employer to provide cycles and/or associated safety equipment to employees tax free.
- Ownership must not transfer to the employee during the loan period (Condition A).
- The equipment must be used mainly (>50%) for qualifying journeys i.e. all or part of journeys between home and workplace or between workplace and workplace (Condition B).
- Equipment must be offered to all employees, and no section of the workforce may be excluded (Condition C).
There are different types of ways that cycles can be provided:
- The loan of cycling equipment to employees.
- The provision of a voucher to enable the employee to hire cycles and equipment.
- Provision of pool cycles for general use by employees.
Alternatives:
The exemption from tax and National Insurance Contributions (NICs) for loaned or hired cycles only applies where there is no transfer of the property in the cycle or equipment in question.
- If an employee is lent a cycle for non-business use, a taxable benefit arises.
An employer can provide an employee with their own cycle by making an employee loan.
- The employee purchases their own equipment. There is no Benefit In Kind charge.
- The employee may claim a mileage allowance if there is business use.
Coronavirus easement: 20 December 2020 to 5 April 2022
- In December 2020, the government flexed Condition B of the Cycle to Work schemes as a result of the restrictions placed on employees forced to work from home.
- This easement applied to employees who had joined a scheme and been provided with a bicycle or cycling equipment on or before 20 December 2020. The easement was in place until 5 April 2022.
- The easement did not apply to employees joining a scheme on or after 21 December 2020
- See Cycles & cyclists' safety equipment.
Useful guides on this topic
Cycles & cyclists' safety equipment
What tax breaks are available to you and your staff if you provide your workforce with eco-travel solutions?
Salary sacrifice & optional remuneration schemes (OPRA)
What is a salary sacrifice or optional remuneration arrangement? How is it taxed?
Loans: Employment-related (beneficial loans)
What is a beneficial loan? What are the tax and Benefit In Kind implications? Which loans are exempt? How is the value of the benefit calculated? How is the beneficial loan reported? What happens if the loan is written off?