Cycling to Work Scheme

In 1999, the Finance Act introduced a tax exemption allowing employers to loan cycles and cycling safety equipment to employees as a tax-free benefit. This scheme came about to encourage healthier journeys to work for both the cyclist and the environment, as the scheme aims to reduce environmental pollution. This exemption was one of a series of schemes introduced under the Government's Green Transport Plan.

Who can apply?

Companies of any size working in public, private and voluntary sectors can implement a tax exempt loan scheme for employees. To qualify for the tax exemption, the cycles and safety equipment purchased and loaned by the employer under the scheme must be freely available to all employees generally and must not be restricted for use by directors or offered to them favourably.

What equipment is eligible?

Eligible equipment includes cycles and cyclists' safety equipment. An electrically assisted pedal cycle can be included under the scheme. Cyclists' safety equipment could include the following:

• Cycle helmets (conforming to European standard EN 1078)
• Bulb horns and bells
• Lighting mirrors and mudguards
• Cycle clips, dress guards, panniers and luggage carriers to allow the safe transportation of luggage
• Chains and locks to safely secure cycles
• Cycle tools such as pumps, puncture repair kits and tyre sealant for minor repairs
• Reflective clothing, in addition to white-front reflectors and spoke reflectors

The safety equipment offered is of the employer's choice, but they may wish to confirm with their local Tax Inspector if the provided equipment falls within the tax exemption.

How much can equipment cost?

There is no set limit on the total value of the equipment, including the cycle itself. However, the Office of Fair Trading (OFT) has advised that the group consumer credit licence will cover schemes up to a value of £1,000.

The Department of Transport's website can offer further information on setting up a Cycling to Work Scheme.