How does the cycle to work scheme work?

In March 2024, the UK Government announced an increased investment in the cycle network with over £100million of funding across walking and cycling routes. As the UK’s cycle infrastructure improves, it’s becoming more and more feasible for people to switch up their commute and start cycling to work – especially with the added benefit of the cycle to work scheme.

The cycle to work scheme was first introduced in 1999 in the UK. After 25 years of the scheme, we understand that there are bags of information out there which can be daunting if you’re thinking of using the scheme for the first time. In this guide, we’ll explain exactly how the cycle to work scheme works and who can benefit.

What is the cycle to work scheme?

The cycle to work scheme allows cyclists who work in the UK to purchase a bike tax-free, saving up to 42% on the cost of a bike or eBike in addition to cycling equipment like helmets, lights and bike locks.

It works similarly to a company car where you sacrifice a part of your salary every month against the cost of the bike for an agreed period of time. You’ll still get your bike straight away, as when you sign up for the scheme you’ll be issued with a voucher against the cost of the bike. Once you receive your bike and/or accessories the monthly agreed fee will be deducted from your pre-tax salary, you’ll see the deduction on your payslip and the savings will be translated into your take-home pay.

What is a salary sacrifice?

A salary sacrifice is an agreement between you and your employer. It reduces your total salary before tax deductions in return for goods. Meaning the cost of your purchase is tax-free. In this case, the salary sacrifice is against the hire of your bike and equipment.

Own now vs Own later

Through the Cycle to Work Scheme you have the option to either own your bike and accessories straight away, or after a 12 month period, or a 4 year period. Choosing the ‘own it later’ option gives you the option of purchasing the bike for a nominal fee after the initial hire period, and gives the largest discount on your chosen bike. If you select the ‘own now’ option you’ll pay the market value for your bike and accessories with a saving of between 18%-25%.

Who is eligible for the cycle to work scheme?

To benefit from the cycle to work scheme, you must meet the following criteria

• Minimum age of 16
• Earn more than minimum wage after the cost of the scheme is taken from your pay
• Your employer pays you through the Pay As You Earn (PAYE) system
• You pay tax through the Pay As You Earn system

Can I use the cycle to work scheme if I am unemployed?

No, as the scheme is funded through a salary sacrifice, if you are unemployed you won’t be eligible to take part.

Is there a price limit on the cycle to work scheme?

No, there’s no longer a price limit on the bike you choose for the cycle to work scheme, making it a great choice for eBikes.

Do I have to cycle to work every day?

While the name ‘cycle to work’ implies you need to be on your bike every day. We know the British weather means that it’s not always the optimal conditions to cycle to work. You don’t have to cycle to work every day, or even every week. Many people opt into the cycle to work scheme and use their bikes primarily for leisure, cycling to work in fair-weather or just when they feel like it.

How do I take part in the cycle to work scheme?

To apply for the cycle to work scheme, simply chose the bike you want. Then fill in the details on the CycleScheme website. Some employers have additional savings so don’t forget to include them on your application.

How can EBCO eBikes Help?

Once you receive your voucher, simply select the store where you’d like to collect your EBCO bike from, check out using the code CYCLESCHEME and we will be in touch to redeem your voucher. Then all you need to do is collect your eBike!