Cycle2Work using Halfords and Fred Baker Cycles, bicycle and cycle safety equipment, via your employer. Save Income Tax, National Insurance and potentially VAT contribution of up to 50% of the value of the equipment.

Background

Halfords pioneered Cycle2Work in the UK. Taking advantage of new legislation enacted in the Income Tax (Earnings and Pensions) Act 2003, an employer is able to provide a bicycle and bicycle safety equipment to employees to be mainly used to Cycle2Work. Halfords developed the mechanism for the legislation to be become operative and now provides the UK’s largest compliant cycle2work scheme to over 300 blue chip organisations.

Benefits To Employees

The employee incurs no Income Tax and National Insurance on this benefit. Where there is a direct business benefit from implementing Cycle2Work (for example as part of a Green Transport Plan or improving employee health/attendance which our schemes all deliver) VAT may be reclaimed and passed on to staff. In total, combined savings on Income Tax, National Insurance and potentially VAT contributions of up to 50% of the value of the bicycle and cycle safety equipment can be achieved.

Benefits To Employers

Running a Cycle2Work scheme incurs no direct costs for employers who also avoid the NI contribution of 12.8% on the value salary sacrificed and achieve the benefits of a green transport or environmental compliance plan.

Halfords Role

The professionally managed service includes account management for the employer and expertise on the complex legislation as well as informed advice on product selection from a partner bike shop - Fred Baker Cycles. The scheme has set the model for the market and provides employees with the largest choice of bicycle and bicycle safety equipment available in the UK, nationwide stores portfolio matching the employee distribution of even the largest employers we work with like Royal Mail.

How the scheme works…

• The employer can administer the scheme, or Halfords can introduce
  an administration service.
• The employee will be given a period of time in which to choose a bike.
• Halfords have the largest choice of bicycles and accessories in the
  UK. There will be a store near you.
• Choose a bike in store or online with Fred Baker Cycles
• Then choose a letter of collection (LoC) value that is nearest to the value of the bike.
  LoCs are available from £100 in £50 increments. The full value of the LoC must be spent on a bicycle in store to achieve the saving.
• Advise the employer or administrator of the LoC value required.
• Once the administration process is complete a voucher will be issued.
• The scheme is financed by the employer, this can be made cash
  neutral. The employee pays back their LoC value monthly from
  their salary.
• The savings come from tax benefits associated with the scheme.