What Is the Cycle to Work Scheme?
The Cycle to Work Scheme is a government backed salary sacrifice scheme available to PAYE employees in the UK. This means the cost of a new bike and/or cycling equipment is deducted from your salary as a non-cash benefit, so you save on tax and national insurance.
Your employer buys the bike for you to ride to work and you ‘hire’ it from them. The ‘hire’ period is usually 12 or 18 months with monthly payments taken directly from your payslip before tax deductions.
As you don’t pay income tax or national insurance on the scheme payments you will save between 32% and 42% (depending on your tax band) on the overall cost of your new bike and accessories. Although your employer owns the bike, effectively it’s yours to use as you wish throughout the ‘hire’ period.
Which Cycle to Work Schemes to we partner with?
Our preferred partner is gogeta, they offer unbeatable value, they have swift easy admin and offer 24/7 support to employers, employees and retailers alike. Thanks to the low cost of accepting gogeta vouchers, we do not include any surcharges, which means gogeta customers enjoy the best savings.
We are also authorised for the below schemes and are hoping to offer the Halfords Cycle2Work scheme in 2024. If you are on a scheme not listed, then please get in touch with us at shop@redskybikes.co.uk and we will see if we can join the scheme.
CLICK ON ANY OF THE CYCLE TO WORK SCHEMES BELOW THAT WE OFFER TO FIND OUT MORE DETAILS:
What is the process for the cycle to work scheme?
1. Contact your Employer
- Find out which cycle to work scheme your employer uses
- Confirm how much you can spend as this limit is set by your Employer
2, Choose your Items
- Come into store to speak to one of the team so we can help you find the right bike for you and any equipment you might want
- We can give you a quote for everything whilst you are in the shop
- Alternatively, you can go to our online shop and work out the total cost of everything
- Any problems contact us on 01845 444464 or email us shop@redskybikes.co.uk
3. Apply for your Voucher
- Submit the total value of the goods from your quote to your cycle scheme and be sure to select RedSky Bikes as your chosen retailer
- Once it’s been signed off by your Employer you will be issued with a Voucher or Certificate (the cycle schemes have different names for them)
4. Collect your Goods
- Once you are in receipt of your cycle scheme confirmation either drop us an email with a copy of it to shop@redskybikes.co.uk or pop into the shop to let us know
- Once we have the voucher confirmed we can start getting your bike all set up for you and arrange a convenient collection date
GOGETA IS REDSKY BIKES PREFERRED CYCLE TO WORK PARTNER
gogeta is not your average tax free cycling provider, they offer unbeatable value, they have swift easy admin and offer 24/7 support to employers, employees and retailers alike.
Thanks to the low cost of accepting gogeta vouchers, we do not include any surcharges, which means gogeta customers enjoy the best savings.
Maximise savings with the UK’s most generous scheme
In addition to the tax savings, gogeta enables access to Sale prices and Discounts that are not usually available to Cycle to Work buyers. Total savings are often in excess of 50%.
Never any hidden costs
Gogeta charge a 6% Platform Fee which allows gogeta to maintain their marketplace, finding you the best deals, as well as running their support teams. Unlike other cycle to work schemes it ensures that Retailers never add a Surcharge to use your voucher (even on discounted bikes).
The platform fee is applied to your salary sacrifice amount, which means you get the benefit of saving tax on this and spreading the cost. So the net effective cost is just 2.3% for a higher rate taxpayer and 2.7% for a basic rate taxpayer.
£1 Ownership Fee
As the bike is technically hired for the duration of the salary sacrifice, there needs to be ownership fee at the end to satisfy HMRC. Other schemes charge 7% of the bike price! Rest assured gogeta charges a mere £1.
NEW gogeta flexi vouchers
All vouchers issued by gogeta can be spent flexibly over 12 months. Unlike other providers’ vouchers they don't have to be spent in one go.
This means that you have more control over what you buy and when. You could get a bike in the summer. Lights in Autumn. Gloves in winter. All on the same voucher. And across as many transactions as you like. With a gogeta flexi voucher you could make your whole year’s spend on cycling tax free. Find more info here https://gogeta.bike/flexi-voucher
SHOW ME HOW GOGETA WORKS
1. ChooseWork with RedSky Bikes to select your bike and enter the value in the package details on the gogeta website (RedSky Bikes may ask for a refundable deposit to reserve the bike in store). But you will never be asked to pay a surcharge for using a gogeta voucher
2. Share with HROnce you have completed an application form you will then get an email with all the relevant details and an invoice to pass to your Employer
3. Receive your voucher
As soon as the invoice is paid by your Employer we will email you your paperwork and your gogeta collection voucher
4. Ride!Bring the voucher to us at RedSky Bikes and enjoy your new bike at a tax free price
Happy cycling!
Cycle to Work General FAQsWhat is the Tax free bike scheme?
The Tax free bike scheme was introduced by the UK Government to encourage greater participation in cycling.
The Scheme enables employers to offer their employees the opportunity to get a bike and cycling accessories via their salary.
This means the employee reduces part of their gross salary before tax, in exchange for a bike and accessories, and benefits from not paying Income Tax or National Insurance on the value of the bike and gear.
Employees can use the bike for commuting as well as for leisure.
Cycle to Work savings are typically 32% - 42% depending on your earnings.
The scheme also acts as a form of interest free loan via salary, to further improve the affordability of getting a new bike.
Neither the employer or the employee is required to keep a log of their use of the bike.
How do I join the scheme?
To start your employer must register with one of the many cycle to work schemes to make the scheme available to employees. It is not possible to have a salary sacrifice without the employer offering it.
Then use the scheme to find your chosen authorised Retailer to find your bike and cycling accessories, see how much this will cost and the total salary sacrifice amount, plus the estimated tax savings.
When you apply to join the scheme your employer will review your application, and when it is approved you will sign a salary sacrifice agreement and a hire agreement.
Your employer then notifies the cycle to work scheme and you get a voucher or certificate to redeem for your new bike from your preferred bike retailer. Happy cycling!
What bikes and cycling accessories are available?
You can get any adult bike, including electric bikes, plus a wide range of cycling equipment and clothing. You can select cycling equipment with a bike, or if you already have a bike and are cycling to work you can choose to get equipment only, with all the same tax savings.
The only cycle to work scheme purchases that are exempt are:
GPS ride trackers and navigation devices
Nutritional products / foodstuffs
Gift Vouchers
Bike racks for cars
Power meters
Turbo Trainers or Rollers
Cameras
Headphones
Childrens Bikes
Is there a limit on how much an employee can spend via the scheme?
Your employer will set the minimum and maximum scheme limits. You will be notified of these when the scheme is promoted to you.
How are the savings made?
The Tax free bike scheme savings are made by reducing your gross salary in exchange for your new bike. That’s called salary sacrifice.
By reducing your salary before tax you are not paying Income Tax or National Insurance on the amount which is the value of the voucher you want to redeem for your new bike.
So the cycle to work amount you will see in your payslip each month is before tax. The true net cost of your bike will be lower because you are not paying tax on it.
Plus don’t forget another nice benefit is the option to pay for the bike interest free through your salary.
What happens at the end of the scheme?
The tax benefits available through the Tax free bike scheme are provided on the basis that employees are hiring the equipment from their employer. This avoids the scheme becoming a benefit in kind, which would attract additional tax.
A hire agreement is supplied when the employee joins the scheme.
This agreement is between the cycle scheme and the employee, so there’s nothing employees will need to do, except to see out the hire term with no further charges or deposits.
This offers the best benefit, with no hidden transfer of ownership fees.
When the Fair Market Value of the goods becomes negligible the government insist that employees pay a fee to transfer ownership. Check with the scheme to find out what this fee is as some of the schemes will charge 3-7% of the market value. Gogeta our preferred scheme only charge a nominal fee of £1.
Employees also have the opportunity to buy the goods early or return the bike, if they wish.
How often can I join the scheme?
Your employer will decide this but it’s usually once an existing Tax free bike scheme salary sacrifice has ended.
If I work from home can I join the scheme?
Yes, if you use the bike for work related trips such as to a co-work space, to the post office or to collect work-related items.
What happens if I leave my job during the scheme?
If you leave during the salary sacrifice period your employer will deduct the outstanding balance from your final net pay.
What happens if I take maternity / paternity / adoption or sick leave?
The salary sacrifice will continue as long as your salary remains at an acceptable level to ensure affordability, and it does not drop below National Minimum Wage. Your employer will confirm this with you.
Who owns the bike?
Your Employer technically owns the bike during the term of the hire agreement.
This ensures the tax benefits are maintained.
At the end of the hire term the employee is given the option to take ownership of the bike after paying the applicable Ownership Fee.
Who is responsible for maintaining the bike?
It is the employee’s responsibility to ensure the bike is well maintained.
What happens if there is a problem with the bike?
Should there be any issues with the bike, in the first instance contact the bike supplier.
In the event of a warranty issue and subsequent replacement the bike supplier will handle this for the employee, and the scheme will continue.
Do I have to spend the full amount of my voucher in one go?
With all cycle to work schemes apart from gogeta you do have to spend the full amount in one go. However with gogeta, your voucher is flexible so you can spend the balance over different transactions with different retailers. You must spend the full value of your voucher within 12 months.
What happens if my new bike is stolen or I have an accident?
It is your responsibility to insure your bike should you wish to.
If your bike is stolen during the salary sacrifice periodthe employee remains liable for any remaining payments. If the bike is insured and replaced then the agreement continues as normal.
It's therefore worth considering getting insurance for your new bike.
Gogeta offer14 days FREE insurancewith Bikmo on all new bikes to give you peace of mind in those first few days of riding. No payment details or cancellation is required!
14 days FREE insurance with gogeta? How does it work?
Once you have completed your cycle to work voucher request, you will be given the option to register to receive an activation email from Bikmo.
This email will contain a link where you must activate your 14 days free insurancewithin 7 days of purchasing, receiving or collectingyour new bike.
No payment details or cancellation is required. It covers accidental theft and damage only, and is only valid on new bikes.
Before the 14 days free cover expires, you will receive an email from Bikmo, offering you exclusive savings on their hassle-free full policies.
Do I need insurance?
Insurance is not a requirement when buying a bike, although we would highly recommend it, as if anything happens to the bike, you (the employee) remain liable for any remaining payments.
Dedicated cycling insurance is something to consider, as it offers cover for both you and your bike. Not all home insurance covers your bike away from home, and there’s often a maximum value of bike hidden in the small print.
What if I change my mind?
There is a 14 day cooling off period after you collect the bike if you change your mind. After that the salary sacrifice agreement with your employer cannot be cancelled.
What is the gogeta Platform Fee?
To unlock the full value of marketplace deals and salary sacrifice, gogeta charges two small fees:
The first is a 3% fee to retailers, which is by far the lowest in the industry (legacy schemes charge up to 15%!). You as an employee don’t see this fee, but it’s worth mentioning because it’s actually really helpful!
Thanks to our uniquely low retailer fee the retailers guarantee to offer you their very best pricing, including all available discounts, with no hidden surcharges. This is very different from the legacy schemes, whose high fees mean that the retailer is often forced to charge full suggested retail price, or even charge a ‘handling’ fee on top.
Our only other fee is a 6% Platform Fee we apply to your salary sacrifice amount. This platform fee allows gogeta to maintain our marketplace, finding you the widest range of bikes and the best deals, as well as running our support teams.
The platform fee is applied to your salary sacrifice amount, which means you get the benefit of saving tax on this and spreading the cost. So the net effective cost is just 2.3% for a higher rate taxpayer and 2.7% for a basic rate taxpayer.
Here’s a real world example:
- You have chosen a bike that (after any available discounts) is priced at £2,500.
- You will receive a voucher for £2,500 to pay for the bike, and your total gross salary sacrifice amount will be £2,600.
- So the gogeta fee is £100 gross, £58 net (which works out at just £4.83 a month).
At the end of the agreement there’s a £1 charge to formally take ownership of the bike. Again this is a massive saving compared to the 7% that some other schemes charge. That’s it!
It’s the most tax-efficient, fairest route for everyone. You make a great overall saving on your new bike, and there are no other fees, no hidden charges.
We’re completely transparent about costs at every stage, with calculators available throughout the site to enable you to see the total costs.
How does the gogeta Flexi voucher work?
- Is it still just a single application?
Yes, you’ll complete a salary sacrifice agreement and a hire agreement when you first apply to join the scheme. We’ll then update your hire agreement with the details of what you spent your voucher on, each time you use your voucher.
- Can I spend my voucher in one go, in a single transaction?
Yes
- Is there a limit on how many times I can use my voucher?
No. You can use it as many times as you want, until you have no remaining balance. Be sure to check your account balance before using your voucher.
- What can I spend my voucher on?
A bike, clothes, lights, helmet, shoes, accessories as well as repairs and maintenance.
- If I don’t spend the full amount can I get a refund on the balance?
No. As you have entered into a salary sacrifice agreement with your employer, you are committed to the amount you selected when you applied. Any amount you do not spend will still be repaid via your salary sacrifice, so it's important to select the correct amount and then to fully spend it.
- How do I know what my voucher balance is?
Your account will always show your initial voucher amount, the deducted amount(s) and the remaining balance.
- How long is my voucher valid for?
It's for 12 months. We strongly encourage you to spend your voucher in that period. However if you don't, we can extend the expiry period.