Cycle to Work Scheme: Can you claim for electric bikes?
With the recent COVID pandemic, bicycles have become ever more popular. Not just for keeping fit during lock-down but increasingly as a preferred mode of transport for commuting...
I've had my eye on an electric bike (an 'ebike') for a while.
The balmy (?!) summer months combined with the new 'COVID world' that we inhabit makes the prospect of hopping on a bike as a mode of transport more appealing than ever.
The 'electric' bit is not (wholly) due to my laziness or lack of fitness (!) but mainly due to my wish to use it for home to work commute - so, importantly, I want to be able to use it to rock-up at work without feeling all sweaty, red-faced and panting...
The problem is that many of the better ebikes - such as the Van Moof that I've had my eye on - are fairly pricey and so the decision becomes harder to justify.
But could this is be where the UK Cycle to Work Scheme comes to the rescue?
What is the Cycle to Work Scheme?
In a nutshell, the Cycle to Work Scheme was introduced as a tax efficient way to encourage bike usage by employees for their daily commute.
Currently over 40,000 employers have implemented the scheme helping more than 1.6 million workers get fit while commuting to work.
It works by the employer company buying the bike (recovering the VAT and getting tax relief on the net capital cost in the process) and then deducting 'hire' charge from the relevant employees' gross salaries - a form of 'salary sacrifice'.
The company can also buy and offer safety equipment such as protective helmets as part of the package.
This saves on income tax and employee NIC for the employee PLUS employer's NIC for the employer. A win-win.