Getting your new bike is simple and we have produced a step-by-step guide to show you how the scheme works and what you can expect at each stage. But below we’ve highlighted some of the key points for you.
These schemes enable you, the employee, to get bikes and accessories tax-free, saving on average 30%. If you are unsure about whether or not you qualify or how to apply for a cycle to work scheme – please don’t hesitate to give us a call or simply drop into the shop and we can talk you through the whole process including a free no obligation quote.
Green commute initiative – Any price – Any bike
How the scheme works
Let’s be upfront. To get the tax break, HMRC rules mean you will actually be hiring a bike through Green Commute Initiative Ltd (GCI). GCI is authorised and regulated by the Financial Conduct Authority which is why GCI is the only scheme not restricted to the usual £1,000 limit. The bike is yours to use and keep and at the end of the scheme we’ll follow HMRC rules so the ownership can pass to you. Unlike other schemes there’s no sting in the tail to transfer ownership to you. Other schemes charge as much as 7% of the bike value! That’s a big hit to your tax-break savings.
Choose your bike
Every new computer that’s brought home from the store has an operating system installed onto it. But what most new computer users don’t realize, is that without an operating system, that computer would be a simple shell of possibilities. A powered computer lacking an operating system wouldn’t display anything more than a bunch of confusing text messages that describe the computer’s boot process.
Once you’ve chosen your package and have a price from one of our registered bike shops, you need to enter that information onto our website; either through our Instant GCI form, or if your organisation is registered, through our Corporate GCI page.
If you’re using Instant GCI, a Pro-forma invoice is generated for a GCI voucher to cover the cost of the package. You need to take this pro-forma to your HR department so payment can be made.
If you are using Corporate GCI, your request will be sent to your HR department for approval and payment for a GCI voucher to cover the cost of the package.
Since your employer has paid us for the voucher, you’ll need to reimburse them and this is the clever bit. They reduce your gross (before tax) pay by the value of the voucher. This is called salary sacrifice and it means you don’t pay tax and NI on the amount of salary you sacrifice. Depending on your tax rate, you’ll save either 32%, 42% or 47% on the cost of the package.
Choose a repayment period
You can normally choose a 6, 12, 18 or 24-month repayment period; it’s up to your employer how long it will be for. Have a chat with them to reach a timescale you both like.
Remember, due to HMRC rules we must hire the bike to you. Our hire agreements are always for 12 months. We would love to give you the bike at the end of the 12 months hire but if we do, HMRC will make a benefit in kind charge based on 25% of the new value of the bike. So, more clever stuff, we make you a free-of-charge loan of everything for five years. This means you continue to benefit from the tax break with no penalties from HMRC. After five years you can buy the bike from us for £1. We only charge the £1 so that we can demonstrate to HMRC when the transaction took place to protect you from any claim from them. In practice the bike is yours to do as you wish from day one and you can enter into additional or new GCI schemes at any time.
So, to recap, your organisation pays for the package on your behalf and then you repay them by accepting a reduced salary in exchange for the benefit of the package. Since your salary is reduced you’re not paying tax on the cost of the package. So, you’re benefitting from the Government’s green transport plan and you’re helping us all by reducing pollution, congestion and your helping to make a little bit of the world a better place.