At Happl, we're committed to supporting healthier, greener, and more cost-effective commuting options for your employees. The Cycle Scheme is a firm favourite with our community, designed to promote a more active lifestyle and a reduced carbon footprint. By offering the Cycle Scheme, you can provide employees with access to tax-free bikes and cycling equipment, promoting wellbeing and sustainable practices within your organisation.
Happl partners with leading providers like Blackhawk Network (the largest provider in the UK), Dash Rides, and Human Forest to offer a seamless and flexible experience for both employers and employees. This guide will take you through everything you need to know about the Cycle Scheme, including the benefits for employees and employers, HMRC regulations, the standard processes, and answers to frequently asked questions.
What is the Cycle Scheme?
The Cycle Scheme allows employees to obtain bicycles and cycling equipment tax-free, making cycling to work more affordable and accessible. This benefit aligns with the government's initiative to encourage healthier lifestyles and reduce environmental impact. Employees save between 25-39% on the cost of new bikes and accessories, with payments spread over a fixed term through salary sacrifice.
Benefits of offering the Cycle Scheme
For Employees
Cost Savings: Employees can save up to 39% on a new bike and accessories through tax and National Insurance savings.
Health and Wellbeing: Cycling to work promotes physical activity, reduces stress, and can lead to improved mental health and fitness levels.
Sustainable Commuting: By opting to cycle, employees contribute to reducing their carbon footprint, supporting a greener environment.
Flexible and Inclusive: The scheme is inclusive, catering to all levels of cyclists, whether they need a commuter bike, an electric bike, or cycling accessories.
For Employers
Boosted Employee Wellbeing: By promoting physical activity, the Cycle Scheme can help reduce absenteeism, improve morale, and increase overall productivity.
Employer National Insurance Savings: Employers can save up to 13.8% on National Insurance contributions through salary sacrifice arrangements.
Enhanced Employer Brand: Offering the Cycle Scheme demonstrates a commitment to employee wellbeing and environmental sustainability, enhancing your reputation as a responsible and progressive employer.
Employee Retention and Attraction: Unique and attractive benefits like the Cycle Scheme can aid in retaining current employees and attracting new talent, especially those interested in health and sustainability.
HMRC regulations and compliance
The Cycle Scheme is supported by HMRC, provided that the scheme adheres to certain guidelines:
Salary Sacrifice: Employees hire bikes and equipment through a salary sacrifice arrangement. This reduces their gross income, thus reducing the amount of Income Tax and National Insurance they pay.
Eligible Equipment: The equipment must primarily be used for commuting to work. This includes bicycles, electric bikes, and cycling accessories like helmets, lights, and locks.
Ownership Transfer: At the end of the salary sacrifice period, the employer can transfer ownership to the employee, often for a fair market value, or offer an extended hire period.
It's important to keep records of the scheme's operation to ensure compliance with HMRC regulations.
How the Cycle Scheme works with Happl
Happl offers a streamlined process for both employers and employees:
Scheme Setup: Happl assists in setting up the scheme with partners like Blackhawk Network, Dash Rides, or Human Forest. We'll work with you to offer the best providers for your team and support around different set-up options
Employee Selection: Employees choose their desired bike and equipment from the provider's extensive range.
Salary Sacrifice Agreement: Employees enter a salary sacrifice agreement, agreeing to deductions from their gross salary over a set period, typically 12 to 18 months.
Receive the Bike: Upon agreement, the employee receives their bike and equipment, ready for their commute.
End of Hire: At the end of the hire period, employees can either extend the hire or take ownership of the bike at a fair market value.
Providers Overview
Blackhawk Network: As the largest provider in the UK, Blackhawk Network offers a wide range of bicycles and equipment. With this scheme, employers are required to pay the full invoice amount at the start of the agreement, with the employee paying this back each month via salary sacrifice.
Dash Rides: Specialising in e-bikes, Dash Rides offers a flexible subscription-based model, perfect for those interested in an electric option for their daily commute. Companies aren't required to pay the up front cost of the bike on this scheme, reducing the initial upfront cost to the business.
Human Forest: Focused on sustainability, Human Forest provides eco-friendly e-bike rental options, ideal for employees looking to minimise their environmental impact without the commitment of bike ownership.
Standard Processes and FAQs
Employee Leaving the Company
During the Hire Period: If an employee leaves before the end of the hire period, the employer can choose to either deduct the remaining balance from their final salary (up to the allowed limits) or agree on a different payment method with the employee.
After the Hire Period: If the hire period is completed before the employee leaves, they may have the option to take ownership of the bike by paying the fair market value.
What Happens at the End of the Hire Period?
At the end of the hire period, the employee can either:
Extend the Hire: Continue using the bike with an extended hire agreement, often at no additional cost.
Purchase the Bike: Pay a fair market value to own the bike outright.
Return the Bike: Hand the bike back if they no longer wish to keep it.
What if the Bike Gets Damaged or Stolen?
Employees are typically responsible for insuring the bike. Most providers offer guidance on insurance options to protect the bike against theft or damage. In the event of a claim, the salary sacrifice payments will usually continue until the end of the agreement.
How Much Can Employees Spend?
Employers can set a maximum limit on the value of the bike and equipment package if they want to.
Getting Started with Happl's Cycle Scheme
Implementing the Cycle Scheme with Happl is straightforward. We handle the setup with our partners, offering a flexible and easy-to-manage benefit for your team. Whether you're interested in traditional bikes, electric bikes, or sustainable commuting options, our partners provide a range of solutions to suit your employees' needs.
To learn more about setting up the Cycle Scheme at your workplace, contact your Happl account manager, and we'll guide you through the process.