Tax
Efficient Benefits - Bikes for Work
The government wishes to encourage and support those
who choose economical and environmentally friendly
transport to and from work. Where walking is not
an option, bicycles are the clear favourite; the
bikes for work scheme takes legitimate advantage
of the significant financial concessions that the
government is prepared to make.
The scheme must function in an approved manner to
qualify, and the scheme has been created to meet
all criteria. It operates by means of a salary sacrifice
arrangement, whereby the employee agrees to a regular
reduction from gross salary for a stipulated period.
This amount, free of tax and National Insurance
Contributions, is used to pay the employer for use
of their bicycle. These concessions reduce the effective
cost to the employee by an average 30-40%, according
to the rate of income tax applicable and their NI
saving for the employer, which can either be retained
or ‘recycled’ to subsidise the scheme.
