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 for commuters and to improve the future of 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.
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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.
Why should I cycle to work?
Driving to work may seem like the easiest and most convenient way to travel to your work, but there are many reasons why you should consider cycling to work instead:
You will save yourself £1,000s by cycling to work rather than driving because:
- The price of petrol is at an all time high so fueling your car costs more.
- The price of insurance is also increasing.
- The replacement of broken bike parts are cheaper than the cost of replacing broken car parts.
- Also, using a car just for short journeys is bad for your car as it increases engine wear and tear and means your car will need to be fixed more often.
Maintaining a vehicle is much more expensive than maintaining a bike:
- If you replace your car for a bike you will not need to spend money servicing your car and having your car MOT’d.
Driving a car is extremely bad for the environment because:
- Cars release CO2 which increases the speed of Global Warming.
- Cars are made from crude oil which is a non renewable resource and will one day run out.
- The drilling of oil needed for fuel is harmful to the environment as there is a risk of oil spills which kills natural habitats and wildlife.
Cycling has no impact on the environment so cycling would make the world a greener place.
If more people cycled to work:
- There would be less cars on the road which means less congestion.
- The government would also spend more on maintaining cycle paths.
What if cycling to work is not an option?
Cycling to work is not an option for all commuters as not everyone lives in cycling distance of their work. Therefore PetrolPrices.com has guides on how to drive efficiently to save money and reduce the environmental impact of driving a car. Alternatively commuters could consider using public transport to get them to work to reduce the amount of cars on the road and save money.