Reasons That Make Cycling To Work Advantageous For Employees
If you are looking for a cheaper, healthier and greener way to travel to work
, the cycle to work scheme may prove to be advantageous for you. Different individuals use different means of transport to commute to work. However, too much use of motor vehicles affects your health, your finances and your environment.
It was to curb the adverse effects of too much use of motor vehicles to work, that the UK Government introduced the
cycle to work scheme in the Finance Act (1999). As per this scheme, the employers buy bicycles and cycling gear and loan them to employees for a particular period.
A previously agreed salary sacrifice arrangement recovers the costs of the bicycle and cycling gear during the loan period, which usually lasts for 12 months. In this arrangement, the employee accepts a lesser amount of money as salary in lieu of the rented bicycle and cycling safety equipment.
The employer and employee may avail of tax benefits with the implementation of this scheme. How does this work? The employer does not need to pay VAT on the purchase of the bicycles and safety equipment under this scheme. The employee does not have to pay high income taxes as they accept a lower salary under the salary sacrifice arrangement.
The most important concern that an employee has is regarding eligibility. Employees working for employers in public, private and voluntary sectors are eligible for availing of the advantages of this scheme. If you work in any of these sectors, and fulfil the following conditions, you may get a bicycle under this scheme.
You are at least 18 years of age (you may also get a bicycle and cycling gear if you are 16 years or above under some schemes; however, this requires a guarantor).
You are paid through the Pay as You Earn (PAYE) system.
Your salary does not go below the National Minimum Wage after deduction as per the salary sacrifice arrangement.
If you think you are eligible for this scheme, you need to get in touch with the administrative or human resource department of the organisation and ask for participation details. The cycle to work scheme needs to be available to all groups of employees, if they fulfil the conditions.
The tax advantage is not the only advantage you may avail of from this scheme.
Cycling to work offers health benefits as well. You get your regular exercise when you cycle to work. Moreover, it lessens traffic congestion. Cycling is perhaps the most eco-friendly way to travel, and helps in the preservation of the environment.
In most cases, employers let employees choose a suitable bicycle and safety equipment on their own. You may choose any type of bicycle for your commute to and from work, between two workplaces, or to and from the train station, where you board a train to get to work. However, you need to restrain your choice within the specified limit, 1000.
Find out the details about the scheme from your employer to avail of its advantages.
by: Daniel Smith
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