13 February 2015

Cycle to work: Save money and keep fit

With the Tour de Yorkshire kicking off in May 2015, we take a look at the benefits of pedal power and the Government’s Cycle to Work scheme. Here’s an overview of the initiative, showing how much it could save you, and we compare the cost of cycling with running a car.

How does it work?

If your employer is signed up to the Cycle to Work scheme you could get a new bike at a discount price because of the tax benefits. These tax breaks are available on the understanding that your employer is hiring the equipment out to you for cycling to work.

You can choose a bike and accessories up to the value of £1,000, and once your application has been approved by your employer you’ll pay for the equipment in monthly instalments through salary sacrifice – giving up part of your salary in exchange for a non-cash benefit.

You'll pay less Tax and National Insurance on the 'benefit' so this can work out a lot cheaper than purchasing a new bike outright. There’s a lot of support for the scheme, with operators including major chains and reputable bike shops up and down the country. Each provider is slightly different, but in most cases your employer will own the bike and hire it out to you for an agreed period. Although you don’t technically own the bike, you can use it outside of work if you also ride it to work regularly. At the end of the hire period, you may also be given the option to take over ownership of the bike.

Why cycle?

We all know that travelling in the rush hour isn’t much fun, but with two wheels you could beat the traffic and not have to worry about parking once you reach your destination. Cycling can have a positive effect on your physical and mental well being, too. Regular exercise is proven to boost fitness levels and reduce stress, which could help you feel more energetic and focused at work. You’re also doing your bit for the environment by reducing your carbon footprint, as cycling cuts congestion and pollution.

What can I save?

By cycling to work, you could save on transport costs like bus, tube, tram or train fares, parking and petrol or diesel costs. Higher rate taxpayers could also save up to 42% on the cost of a new bike, while basic rate taxpayers can make savings of up to 32%. 

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