Is the cycle to work scheme worth it for employees and businesses?

Summary:

What is the cycle to work scheme and how does it work?

Benefits for employees and businesses

So, is it worth it?

How to set up a cycle to work scheme

 


Is the cycle to work scheme worth it for employees and businesses?

Cycling is one of the UK’s most popular physical activities, but it can be hard to find the time to get active in between work, chores and family life.

It’s something you should care about as an employer, with four out of ten workers saying that a health condition has affected their work.

With that in mind, how can organisations encourage their employees to get more exercise?

Cycle to work schemes are a great way of promoting a healthier lifestyle, but are they really worth implementing?


What is the cycle to work scheme and how does it work?

The cycle to work scheme was introduced in the Finance Act 1999 by the UK Government, and is a tax exemption (also known as a salary sacrifice scheme) that’s intended to encourage people to be more active, promote healthier commutes and reduce CO2 emissions.

Cycle to work schemes allow employees to give up part of their pre-tax salary in exchange for the hire or purchase of a cycle (including electric bicycles, tricycles, or four wheeled cycles that are not a motor vehicle), and/or related equipment.

Organisations of all shapes and sizes can implement a cycle to work scheme. To be eligible to take part in a workplace cycle to work scheme, employees must:

  1. Be aged 16 or over
  2. Be paid through the PAYE system
  3. Be paid more than the National Minimum Wage, while their salary must not drop below the National Minimum Wage after the salary sacrifice has been applied.

Because employees must be paid through the PAYE system, self employed people and contractors are ineligible.

Note that, although 16 and 17-year old employees are eligible, many organisations choose to not allow under 18s to take part in the scheme as a result of the law relating to contracts with minors.


Benefits for employees and businesses

So, that’s how a cycle to work scheme works, but what are the benefits of implementing one for employees and businesses?

Savings on bikes and equipment

The headline benefit for employees is being able to make significant savings on both bikes and cycling equipment.

And cycle to work schemes such as Cycle2Work with Sodexo compare very favourably with interest free finance.

For example, a bike valued at £1,000 would cost as little as £55.70 per month over 12 months. That’s just £688.40—a massive saving of £311.60!

That’s not the only way your employees will be saving money either, with an average saving of over £3,000 per year available for staff who swap their cars for bikes.

Cycle2Work with Sodexo, in partnership with Halfords, includes Tredz (a Halfords company), as well as a wide range of specialist and independent bike shops all over the UK.

The scheme allows employees to choose from any adult bike, including electric, folding, hybrid and road, as well as a great range of safety equipment and other cycling accessories.

NIC savings—for the employee AND employer

Employees participating in a cycle to work scheme don’t just save money on the bikes themselves. They also make significant savings on their National Insurance Contributions (NICs)—and so do you as the employer.

With Cycle2Work with Sodexo your workforce can save between 33.25% and 43.25%, while the organisation can save up to 13.8% on your NI bill.

Health and wellbeing benefits

On average, Brits spend almost nine hours per day sitting down—10 hours for office workers—and this is very bad for our health. In fact, sitting for more than four hours per day increases the risk of heart disease, diabetes, cancer, back pain and muscle degeneration, so it’s essential to find ways to get more active.

Regular cycling doesn’t just reduce the risk of serious illnesses, including heart disease, diabetes and stroke, but it also boosts your mood and helps improve the symptoms of some mental health conditions, such as depression and anxiety.

Simple to set up

Cycle-to-work schemes provide a number of great benefits to employees and businesses, and they’re also incredibly simple to set up.

They don’t need to be approved by HMRC, and to take advantage of the tax and Class 1A NICs exemption an employer simply buys a cycle or cycling equipment, reclaims the VAT, and then recovers the cost of the bike from the employee’s salary.

Easy to manage

We make the process of managing your cycle to work scheme easy.

With Cycle2Work with Sodexo we’ll manage every aspect of the scheme, providing an administrative portal that keeps your workload to a minimum. Access any aspect of the scheme from this easy-to-use portal, whether in the office or working remotely. You can even login from your mobile device.

We’ll also work with you to develop a communications strategy for your new cycle to work scheme, ensuring your people know about the opportunity and that they’re signing up.

When you choose Sodexo Engage for your cycle to work scheme, we do all the hard work for you!

So, is it worth it?

That’s a lot of benefits on offer to businesses and employees from a single scheme, so is a cycle to work scheme worth it?

That depends on whether you want to:

  • Reduce your organisation’s carbon footprint
  • Encourage your workforce to be healthier, happier and more productive
  • Support employee financial wellbeing by helping them to save money on their tax and NICs, and stretch their salary further
  • Reduce the organisation’s NI costs

A no-brainer, right?

How to set up a cycle to work scheme

As mentioned above, it couldn’t be simpler to set up a cycle to work scheme, but if you want the legwork taken out of it, get in touch with the team here at Sodexo Engage.

We’ve got decades of experience in helping organisations implement award-winning employee engagement and wellbeing solutions, and Cycle2Work with Sodexo is no different.

Your dedicated account manager will work with you closely to successfully implement your cycle to work scheme, supporting you in promoting the scheme internally and making sure your workforce understands all of the benefits associated with it.

Ready to put the pedal to the metal?

Get in touch with the team here at Sodexo today and discover how Cycle2Work with Sodexo can benefit your organisation.