The scheme enables employees who are basic-rate taxpayers to save 40 per cent of the cost of a bicycle, and higher-rate taxpayers can save 50 per cent..

Under the scheme, the employer buys the bicycle (reclaiming the VAT on the purchase) and leases the bicycle to the employee. The employee pays an agreed amount each month out of pre-tax earnings, thereby reducing everyone's income tax and National Insurance contributions. Then, at the end of the agreement (typically, between one and three years), the employee can buy the bicycle for a nominal amount.

Savings Example based on normal Tax Bracket

Your tax calculation:

Total cost of bike and accessories:

£650.00

VAT saving on bike and accessories (NB helmets are exempt from VAT):

£89.36

Net cost of bike and accessories:

£560.64

Income tax saving over hire period:

£112.13

NI saving over hire period:

£61.67

Final cost of bike & accessories:

£386.84

Total saving:

£263.16

Gross monthly salary sacrifice, based on 12 month hire period:

£46.72

Net monthly salary sacrifice, based on 12 month hire period:

£32.24

Percentage saving over RRP:

40.5%

**Please note :A Fair Market Value payment is payable upon cessation of the agreement or at the end of the lease period this is normally around 3% of the value of the bike

We at Mc Convey Cycles can facilitate your cycle to work scheme from start to finish and help with all the form filling and documentation from Hire agreements to Liaising with payroll to make it a simple task. We also work with other bodies such as Cyclescheme and are only too happy to help. If you have any questions regarding cycle to work scheme please Phone Eamon on 02890 330322 or mobile 07789 204633.