Cycle to Work Now dot com – Your tax break to fitness

Very little. Just tell your employees about CycleToWorkNow.Com and give them the employer reference code that you receive when you register as an employer. They go to the site and order. You confirm their order once they've signed the agreement that they will have printed out. You pay for the bikes and then simply give Payroll the gross salary reduction printout. That's it.

At the end of the scheme simply ask your employee if they want to buy the bike at Fair Market Value (see below) and send them an invoice.

Once your employees have signed the C2W agreement, their gross salary will need to be reduced. You can simply print off the list from www.CycleToWorkNow.Com and hand it to Payroll.

No. You also don't need to include Cycle to Work on your employees' P11D.

You choose who to offer the scheme to. As a guide, you should offer it to all employees who have completed any probationary period and meet the requirements described in the list below. Any employee participants must be:

• Over 18;
• Paying UK PAYE;
• Earning enough that their salary reduction does not take them below the national minimum wage.

You cannot offer the scheme to directors on preferential terms.

No. It's absolutely free. There is also no contract or commitment for you to enter into.

Whilst there is no limit on the value of the equipment provided, the loan of the bike is a regulated agreement under the Consumer Credit Act. This means you would normally need a Consumer Credit Licence but, in order to facilitate Cycle to Work, the Office of Fair Trading has issued a group licence which covers all employers setting up Cycle to Work schemes up to the value of £ 1,000 per agreement.

No. The OFT has issued a group licence for all companies running Cycle to Work schemes. You can download it here and there is more information here.

Yes you can restrict the total maximum expenditure of the scheme or the value of individual employee orders. Of course if you do, you reduce the value you gain from reclaiming the capital allowances.

No. You could even run a scheme for a single employee, if you wanted to! You can also run a scheme as often as you like, so it's possible to include your workforce one by one, if that's what's required.

No. There is no requirement for record keeping, only that the main use of the bike should be for commuting.

No. Cycle to Work is about getting the workforce healthier. Providing that the main use of the bike is for commuting, it doesn't matter how far away your employees live.

Again, as long as the main use of the bike is for commuting, other use is irrelevant.

Yes. There is no restriction on the bike for work. Employers should ensure their insurance cover is adequate for this.

Fair market value is what a willing buyer and seller agree on. This is likely to be between 3% and 5% of the original purchase price (£ 25 to £ 42 on a £ 1,000 bike). It's important this sum actually changes hands so that the tax benefits are not lost.

It is a condition of the hire that the employee keeps the bike in good condition. All the bikes are covered by a one year manufacturer's warranty.

Alternatively, you can arrange for the bikes to be serviced by a local dealer, which normally costs between £ 20 and £ 40. This is a business expense and therefore fully deductible against tax.

The employee remains liable for the salary reductions for the term of the agreement. We strongly recommend the employees insure the bikes or add them to their household insurance.

In the unlikely event that your employees don't want to buy the bike after the hire period, there are lots of charities who would be delighted to receive it. Mail us for details. This also applies to employees' bikes that are no longer required because they've been replaced by a new Cycle to Work bike.

There is a very small risk an employee may abscond with a bike. In other schemes, this has never been more than 2% of those who took it up. You can easily minimise this risk by only allowing employees who have been employed with you for a certain period of time or any other criteria you select. The bike value is, of course, likely to be covered by the final salary due.

If you have car parking spaces, you will be charged business rates on every car parking space you provide. Cycle to Work allows you to reduce the number of spaces provided and save money.

It's possible to lease the equipment if you wish. However, you will lose the capital allowances since they will be claimed by the lease company who will also charge you interest on the sum leased, making the whole deal less attractive. We suggest it would be better to raise the finance yourself because the returns make it profitable to do so.

This is possible. Please contact us to arrange it.

The bikes will be delivered directly to the address that your employees specify during the ordering process within a few days of your payment being processed. There is more information about delivery on our delivery page.

At the moment no, it's just too difficult and time consuming to involve all the 3rd-party bike shops. There is also the risk that their staff may not understand the tax rules and unknowingly cause an infringement which you or your employees would be liable for.

The agreement is terminated along with their contract of employment. They are then liable to pay you any outstanding amounts from their net salary. www.CycleToWorkNow.Com makes the calculations easy to do.

You should make any pay awards based on the un-reduced salary.

Yes. Student loan repayments are 9% of the salary above £ 15,000 which NIC is paid on. A salary reduction will reduce your employees student loan repayment.