Employers

The promotion of Cycling offers Government a whole raft of solutions; in one package it helps fight, the Obesity Epidemic, our growing Transport Meltdown and the need to reduce Carbon Emissions.

The Cycle to Work Initiative was born from this and offers a way for Employers to reduce their tax burden, whilst offering their employees a real benefit (at no cost to the employer) and promoting a fitter and healthier workforce. The icing on the cake is that every cyclist reduces our carbon emissions and is one less car filling our crowded roads and parking spaces or one more space on our stretched public transport systems.

CycleDream, run by East St Cycles/Richmond Cycles, provides local Employers with everything you need to set up a Cycle to Work scheme in a simple one-stop package. By operating your Cycle to Work scheme directly through East St Cycles/Richmond Cycles you cut out the layer of bureaucracy, paperwork and inevitable delays that you get from separate scheme operators and cycle shops. You'll be amazed at just how easy it is to get your employees rolling and saving money.

So how does it work?

• The Employer buys the bike and any safety accessories the Employee chooses, up to a limit of £1000.
• VAT registered Employers can claim back the VAT as an input amount.
• The Employer hires the bike to the Employee, who pays this through salary sacrifice. The normal hire period is 12 months.
• The Employee makes these payments on the bike ex VAT from their gross salary, saving approx 30-50% of the cost of the bike.
• The Employer saves the ER's on the salary sacrifice to cover all finance/admin costs.
• The Employee may buy the bike at the end of the hire agreement at a fair market value and only pays VAT on this lower amount.

FYI,

• The scheme is open to all Employees on the payroll who pay tax through PAYE; contractors can set up their own schemes.
• Minimum age for inclusion in the scheme is 18 years old.
• The salary sacrifice cannot take the Employee below the National Minimum Wage.
• The term of the hire agreement may not be longer than that of the Employee's contract.
• Employees must have completed any probationary periods.
• At the end of the hire period the Employer may sell the bike and accessories to the Employee for fair market value. As a guide this is somewhere between 5-10% of the cost.
• Alternatively the Employer can retain ownership of the bike and accessories and allow the Employee to use these for free.
• Employees are responsible for insuring and maintenance of the bike and should it be stolen, they will still have to make all the salary sacrifice payments.

How to Start with CycleDream?

1. Sign up to CycleDream by completing the online registration form. Make this known to your Employees. We will help you to implement your scheme.
2. Employee goes to East St Cycles/Richmond Cycles and selects their bike and accessories. We will collect all their details and complete the Hire Agreement for you. We will email this to you along with the invoice. All you need to do is complete the payroll date on the hire agreement, and both Employer and Employee need to sign this.
3. Upon payment of the invoice, by cheque, BACS, credit/debit card or even cash, we'll contact the Employee and arrange for them to collect the bike.
4. The only ongoing administration required is to ensure the salary sacrifice deductions are made from the employees salary. This is a fixed amount for a fixed period. So the overhead is minimal.

At the end of the agreement, what happens?

At the end of the salary sacrifice arrangement, everything has been paid back to the Employer. They may choose to sell the bike and accessories to the Employee. Process this as you would any invoice including VAT. Invoice the employee for the fair market value of the bike and accessories in order to transfer legal ownership. 5-10% of cost is a normal figure for this. Employers may simply chose to let Employees continue to use the bike and accessories, but at no charge/salary sacrifice. However Employees may not sell the bike or accessories until ownership is transferred.