The aim of the Cycle to Work Scheme or C2W is to promote healthier commutes and reduce stress on the environment. Introduced in the Finance Act 1999, the cycle to work scheme introduces an annual tax exemption, which allows employers to loan cycles and cyclists' safety equipment to their employees as a tax-free benefit.
In this post we're going to look at:
- The benefits of the C2W scheme for the employee
- The benefits of the C2W scheme for the employer
- What's included in the C2W schemes
- How do you implement a cycle scheme
- Outsourcing of C2W
TEN Cycling Benefits for Employees
There are dozens of reasons to get involved in cycling, we've collated our top ten most important:
- Biologically younger - Research carried out by King's College London compared 2,400 identical twins and found that those who rode the equivalent of three 45-minute bike rides per week were nine years biologically younger. This is AFTER discounting other influences such as BMI and smoking. Stanford University also found that cycling regularly can protect your skin against the effects of UV radiation and reduce signs of aging.
- Lose weight - The calories you burn per trip will depend on how hard you are cycling, for example cycling at 5mph for thirty minutes will burn between 75-150 calories depending on your weight and other factors.
- Feel happier - Sunshine will boost the levels of vitamin D - I know here in the UK this often seems redundant but its true!
- Save money - Discounting the cycle to work scheme for a second, you will save money by reducing fuel consumption if you drive, or money spent on public transport. For me the biggest save was in time - I spent less time stuck in traffic which ultimately made me happier.
- Fall asleep quicker - Research carried out by the Stanford University School of Medicine asked sedentary insomniacs to cycle for 20-30 minutes every other day, this resulted in the time taken to fall asleep to reduce by half, overall sleep time increased by almost an hour as well.
- Less time being ill - North Caroline University researchers found that people cycling 30 minutes per day, five days a week take about half as many sick days as those who don't.
- Solve mental blocks - It's well reported that highly regarded artists, musicians and business people (such as Lord Alan Sugar) solve problems and make decisions while cycling.
- Improved heart health - The US based Purdue University have provided research showing that you can cut your risk of heart disease by up to 50% by cycling regularly. The British Heart Foundation tells us that around 10,000 fatal heart attacks every year could be avoided if people kept themselves fitter.
- Fundraising - For some, cycling becomes more than a way of commuting and more than a hobby - it becomes a force for change. Millions of pounds are raised every year through various cycle related fundraising.
- Better mental wellbeing - For some cyclists it's the freedom, the head space and the time to think, for others it can be the social interaction but cycling in general has been widely reported to improve mental well being, I know it did for me.
TEN C2W Scheme Benefits for EmployersThe benefits of the cycle to work scheme aren't only for employees, we have another list here of benefits the employer will see from implementing a cycle to work scheme:
- Improved productivity - People who are healthier are known to be more productive, take a look at what Livestrong have to say about it: https://www.livestrong.com/article/422836-how-does-exercise-improve-work-productivity/
- Better attendance - Improving physical health, as well as improving productivity has been shown to improve employee attendance through positive effects on mental wellbeing and stress levels. As previously mentioned people who cycle 30 minutes per day, five days a week take about half as many sick days as those who don't.
- Reduced parking requirements - You can fit 20 bikes in one parking space, if parking is tight where you're based, encourage your employees to switch to cycling.
- Employee retention - It has been reported that staff who partake in the cycle to work scheme are more likely to postpone switching jobs.
- Low cost implementation - The scheme itself is relatively low cost to implement and is a long term investment.
- Capital expenditure - As the cycle to work scheme is classed as a capital expenditure you can claim capital allowance against it - you should seek further advice on this from your accountant.
- Corporate Social Responsibility - CSR in general has been under heavy fire in recent years by organisations, the media and consumers. A cycle to work scheme has multiple benefits for CSR, for example, employees feel that their wellbeing is looked after. A reduced carbon footprint benefits both the environment and the business.
- Reduction in National Insurance Contributions - Save up to 13.8% of the total value of salary sacrifice in reductions in National Insurance Contributions.
- Better recruitment - Studies have shown that prospective employees are looking for more than wages. As well as company culture, prospective employees are also looking at the perks offered, cycle to work scheme potentially being one of them.
- Reduced carbon footprint - We mentioned this within the CSR segment, however its worth noting that the cycle to work scheme saves the C02 output of a city the size of Hereford each year nationally
Who can take part in the Cycle to Work Scheme and what's included?
As an employer, no matter how big or small, the industry you operate in or the products or services you offer, any private, public or voluntary organisation can implement a cycle to work scheme. To qualify for the taxation benefits, the equipment you loan to your employee must be available to everyone without excluding any groups.
As an employee, as long as your employer is signed up to a cycle to work scheme you can take part. Different employers will operate the scheme in different ways, as such you should ask your manager for more information.
The equipment which can be loaned under the C2W scheme include cycles and the related safety equipment. The tax exemption defines cycles as a bicycle, tricycle, or a cycle having four or more wheels, this does NOT in any case include a motor vehicle. An electrically assisted pedal bike can be included under the scheme (Gov.uk)
The safety equipment side of the scheme isn't defined within the Government's legislation on the matter, however a common sense approach should be taken, for example:
- Cycle helmets (must conform to EN 1078)
- Locks and chains
- Reflective Clothing
- Front bike reflectors and spoke reflectors
- Luggage Carriers to allow safe transport of luggage
- Puncture repair kits, pumps, etc.
It is recommended to double check with your accountant which safety equipment will definitely be included as this is not an exhaustive list.
What do I need to do to set up the scheme as an employer?
There are two ways you can go about setting up a Cycle to Work scheme:
- Salary Plus
The first way to look at offering the scheme is for an employer to buy the bikes and loan them out to employees on a long term basis. This, known as the 'salary plus' arrangement, means the employee's weekly or monthly wage is not affected. In these circumstances, in order to recover the cost of the bike, a weekly or monthly contribution from the employee will be decided upon.
- Salary sacrifice
The most popular way of implementing the scheme is the 'salary sacrifice'. Either weekly or monthly, depending on the way in which your employees waive a part of their salary in return for their employer providing them with a bike and the necessary equipment. This method affects the National Insurance Contributions so it is best to seek advice from your accountant on this.
Outsourcing the cycle to work scheme
There are various ways in which you as an employer can outsource the Cycle to Work Scheme, it is worth taking a look at these for further information:
Please note we do not recommend or endorse any one company in particular and the links above are provided for information purposes only.
For a breakdown of potential savings, we recommend reading Michelle Arthurs-Brennan's Cycling Weekly Article - Is the Cycle to Work scheme still relevant in 2018?
CiA cost often associated with the Cycle to Work scheme are bike racks and security, however these should be provided regardless of whether or not an official cycle to work scheme is in place. Having bicycle security in place allows employees to feel cared for and make sure that you have their best interests in mind.
Prices for bicycle security can vary for example:
Provides parking for a single bike, with a zinc plated steel construction and adjustable upto 180 degrees.
Attractive, durable and functional bike security.