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London Fixed Gear and Single-Speed is a community of predominantly fixed gear and single-speed cyclists in and around London, UK.
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@Aroogah
I put this together for my employer to get them to sign up....it's very rough as it was background for the presentation I did.
Cycle Scheme
Overview
The Cycle Scheme is a way for My Company employees to purchase bicycles for commuting to and from work in a very tax efficient manner. The program is run by Cycle Scheme, an independent company.
How it works
The program works under a purchase and leaseback framework. My Company buys the bikes and any accessories through Cyclescheme and then leases the equipment back to the employees. The employees then pay the company for the use of the bike over the next 12 months; those payments are deducted through salary sacrifice and are taken out pre-tax. At the end of the 12 month period, the employee pays the company a 5% residual value payment and ownership is transferred to the employee.
*How employees save money *
Through the scheme, employees leverage My Company’s tax structure to pay for the value of the bike and accessories ex VAT. This translates to an immediate 17.5% savings over RRP. Additionally, as the salary sacrifice takes place before taxes, there are additional savings to the employee from slightly lower income tax and National Insurance contributions.
Total savings for the employees will depend on the total value of the bike and accessories an employee’s overall earnings; however savings can approach 50% of RRP.
Cost to My Company
There are no costs to My Company for joining or participating in the scheme.
Savings to My Company
There will be some minor savings to My Company due to the participating employees’ slightly lower NI contributions.
Financial impact to My Company
The only financial impact to My Company will be in terms of cash flow. The bikes must be paid for by My Company before the employees can use them.
HR Overhead
There will be minimal impact to the HR department to administer the scheme. All applications and approvals for bikes will be handled on-line. The payroll deductions are similar to the ones for Childcare Vouchers so the process will be familiar to HR.
Benefits of the scheme to My Company