partners/Cycle2work Employer Information Pack (2).pdf
The UK’s leading cycle to work scheme provider
Employer Information Pack
Table of Contents
• About Cycle2Work
• What is Cycle to Work
• A Cycling To Work Revolution
• Set the pace and set your limit
• What admin is involved?
• Will employer & employees make savings?
• What is the process
• Where can employees redeem their letter of collection?
• What happens at the end of the initial hire period?
• Are there any additional benefits to employees?
• Introducing Scheme Protection
About Cycle2Work
This Employer information Pack details all you need to know about the scheme. Cycle2Work is brought to you by Halfords For Business. As the fastest growing cycle to work provider for the past 6 years, we want to share our passion for commuting by bike, whilst offering businesses and employees alike, the very best in choice, value and service.
Our customers are at the heart of everything we do, keeping us focused on delivering the ultimate cycling journey. We’re proud to offer a solution that’s suitable for every employee, making it easier than ever to live a fitter, healthier lifestyle.
- Strong immune system
- Relieve stress
- Improved blood pressure
- Reduced risk of heart disease
- Control & lose weight
- Strengthens muscle
What is cycle to work?
Cycle to work is a government initiative to encourage more people to commute to and from work by bike.
The initiative also allows employees to make Tax and National Insurance savings on the cost of a new bike and safety accessories.
Scan the QR Code
OR
Click here to find out more,
We are a founding member of the Cycle to Work Alliance, a group which promotes the benefits of commuting by bike and works closely with government and the wider policy-making community to encourage more people to cycle to work.
A Cycling To Work Revolution
The group campaigns for cycling inclusivity - and it is this that has pioneered the recent changes to the guidance for employers. Everyone from fair weather riders to hardcore cyclists can now get whatever they need to commute by bike, irrespective of their budget.
Set the pace and set your limit with flexible scheme limits
The limit set by the Financial Conduct Authority (FCA) allowing employers to loan a bike and cycle related safety equipment to their employees up to the value of £1,000 has been removed in instances where a provider like Halfords has existing FCA authorisation. For further details, Please visit the Cycle to Work Scheme Guidance.
The choice is yours
In response to these legislative changes, we have updated our contract agreements so that we can use our authorisation to agree any limit on your cycle to work scheme. So now everything from the newest e-bikes to high-end specialist accessories are available, giving employees the best choice possible.
The Department for Transport has also clarified that it is no longer acceptable to ‘add funds’ (also known as topping up). This means that any employee in need of a bike or package worth £1,000 or more must go through the new process.
What admin is involved?
To enable your employees to benefit from great Tax and National insurance savings through Cycle2Work, they will need to enter into a salary sacrifice agreement at point of application. Once their application is submitted, all the employer must do is authorise their request and implement the deductions over an agreed period of time (most commonly 12-18 months). It’s as easy as that!
Will employer & employees make savings?
Absolutely! Employers will still make savings of 13.08% when running Cycle2Work, and benefit from 0.5% savings on the apprenticeship levy.
Employees will also continue to make up to 47% tax and National Insurance savings on the cost of the bike and safety accessories, dependent upon the level of tax they currently pay.
See the tables opposite for examples of savings made by both the employer and employee.
Employee savings
| £1,000 | £1,750 | £2,000 | |
|---|---|---|---|
| Basic rate tax payer saving | £320 | £560 | £640 |
| Higher tax payer saving | £420 | £735 | £840 |
| Additional rate tax payer saving | £470 | £822.50 | £940 |
Above calculations are based on cost of cycle and safety accessories after Tax and Ni savings.
Employer Savings
| £1,000 | £1,750 | £2,000 |
|---|---|---|
| £138 | £228.9 | £261.60 |
Above savings based on 13.08% NIC savings.
£ So what is the process
- Employer enters agreement with Cycle2Work
- Employer set scheme limits
- Employee makes online application
- Employee agrees to a Hire to Agreement with Cycle2Work
- Employee agrees to a salary sacrifice with employer
- Approval carried out
- Letter of Collection issued to employee via email
- Invoice raised and sent to employer for payment
Where can employees redeem their letter of collection?
Cycle2Work is supported by a wide range of specialist bike dealers, catering to everyone regardless of their needs, budget, location or journey to work! This includes:
- Browse in-store at Halfords or online at halfords.com
- Browse in-store at Tredz or online at tredz.co.uk
Independent Bike Shops
Visit our store locator on www.cycle2work.info to see your local options.
What’s more, employees can also benefit from regular discount offers at Halfords or Tredz - saving them even more on their perfect bike and accessories! * subject to employer credit check
What happens at the end of the initial hire period? Cycle2Work offers THREE end of hire options:
- Zero Cost
- Extended Hire
- Most popular option
This allows the employee to opt into an extended rental agreement at NO additional cost. They will have nothing more to pay, and ownership will be automatically transferred to them at the end of the hire period.
- Most popular option
- Take immediate ownership
This allows the employee to pay the HMRC Fair Market Value (usually 18% or 25% of the original value) and then the bike is theirs! - Return the goods to any local Halfords store
Are there any additional benefits to employees?
Of course! When employees enrol onto the Cycle2Work scheme, they will have access to the following fantastic benefits:
- 10% off cycling essentials at Halfords for 12 months
- Unlimited Lifetime Safety Checks on all cycles obtained through the scheme
- Lifetime Guarantee on Halfords brand cycles
- Access to all sale and promotional prices at Halfords and Tredz
- 14 day free cycle insurance
Introducing Scheme Protection
Early leavers are one of the biggest pain points for employers when looking to implement a salary sacrifice benefit.
At Halfords for Business, we’ve developed Scheme Protection to protect employers against the risk of financial loss when an employee who is part of a salary sacrifice scheme resigns from their employment. If, after following the early leaver process you are unable to recover the outstanding funds from an employee, Scheme Protection will make up the difference.
This protects our market-leading salary sacrifice schemes, including Cycle2Work, providing you with added peace of mind. The charges are as follows - 12 months 5% admin charge and 24 month 8% admin charge. We recommend this is funded through the 13.08% NIC savings by running a Cycle2Work scheme.