Frequently asked questions?

Are there eligibility criteria for employees? The Scheme is open to all full, part-time and contract staff whose term of employment is more than the period of the hire (usually 6-12 months).

To take advantage of the tax breaks that result from salary sacrifice...
- You need to be a UK taxpayer via the PAYE system.
- You need to be over 18 years of age to comply with Consumer Credit Act legislation.
- You need to be earning more than the National Minimum Wage after your wages have been reduced.

How often does the bike have to be used for work?
It is anticipated that the employee will principally use the bike for commuting to work. However, there is no requirement for you to keep a record of your use and no demands that you cycle to work for a specified number of days a year. The bike can be used for leisure whenever you wish.

What is the hire period and when do I own the bike package?
The hire period is considered to be the time over which you are still paying your employer for the bike package (typically 6-12 months). You have full use of the bike and equipment during this time and are responsible for the insurance, storage, security and maintenance of it. At the end of the agreed hire period, you may be offered the opportunity to pay the fair market value of the bike package to your employer from your net salary. The fair market value cannot be confirmed before or during the scheme. However historically 5% of the original retail price appears to be typical.

Does my employer require a Consumer Credit License?
The Office of Fair Trading has issued a blanket consumer credit license to all participating employers buying bike packages up to £1,000 including VAT. Once the Hire Agreement has been signed, the resulting relationship is defined under the terms and conditions of the Consumer Credit Act 1974. If your employer wishes to supply bikes over £1,000 inc. VAT then they will need to buy a standard consumer credit license from the OFT (this license costs approximately £550 depending on their business category and takes at least six weeks to process).

Can I enter the scheme if I'm self employed?
Unfortunately not, you have to be subject to PAYE to qualify.

Can my employer pass on VAT savings?
For employers who are VAT registered savings may be passed on to employees. Employees of organisations such as financial bodies, charities & NHS trusts are usually unable to take advantage of VAT savings.