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Halfords Information
Cycle2Work Introduction
As an employee you can make huge savings on a new bike and safety equipment. The "tax break" allows you to obtain a brand new bike hired from your Employer which is free from Tax and NI. (Up to 50% savings can be made). You simply agree to forgo a small amount of your salary on a monthly basis over 12 or 18 months, so you can get a top quality bike and accessories to commute to work on.
How it works...
Step 1
Your employer needs to sign up for the scheme, you will need to get them on board before you can take part. The tax break allows your employer to provide bikes and safety equipment to you as a tax free benefit. Get your employer to visit www.cycle2work.info for more information.
Step 2
You then choose a bike and accessories from any of our nationwide Halfords store network, giving you 1000's of bikes to choose from. And if you can't find what you are looking for in our stores we will help you to source your preferred bike.
Step 3
You will then be able to apply online with the total value of the bike and accessories that you have selected. Your employer will then approve your request and you will sign a hire agreement.
Step 4
You then take delivery of the bike and the price is then deducted from your salary over a period of time (12 or 18 months). Savings of up to 50% are made because you will not be paying any tax or NI on the amount.
Step 5
After the period of salary sacrifice, your employer may transfer the ownership of the bike to you at a fair market value payment of around 5%.
Your employer has to be willing to run the scheme before you can get your bike and accessories. Please visit www.cycle2work.info to find out more information about the scheme.
How Much Can I Save?
This is an example of how savings are made for Basic and Higher Rate tax payers on a £500 bike package hired over a 12 month period. The bike package refers to the bike and accessories that you have chosen and can start from as little as £100 to a maximum of £1000. You can get cycling for as little as £5 per month!
| Higher Rate | Basic Rate |
Bike package retail price | £500 | £500 |
Tax and NI Savings per month | £14.53 | £10.99 |
Monthly repayments from gross salary | £35.46 | £35.46 |
Net monthly pay | £20.92 | £24.47 |
Total hire cost of package over 12 months | £251.06 | £293.62 |
- Savings are based on a Higher or Basic Rate tax payer participating in a 12 month hire term, where the employer is funding the purchase with VAT savings reclaimed and passed back to the employee.
- At the end of the 12 months the transfer of ownership may be transferred to the hirer for a fair market value payment of around 5%.
- VAT savings is not applicable to all companies.
What Are The Benefits?
The Halfords Cycle2Work scheme benefits both employers and employees. Employers benefit from a healthy, happy and productive workforce and Employees benefit from the massive savings the scheme offers.
How do you benefit as an employee?
- As an employee you get a brand new bike and safety equipment free from Tax and NI
- You can spread the cost over 12 or 18 months and choose from the UK's largest selection of bikes
- Save money on tube, train and bus passes
- Save time on commuting and beat the traffic
- Reduce environmental pollution and your carbon footprint
- Improve health and fitness with increased exercise and activity
How do you benefit as an employer?
- Make savings on national insurance contributions
- Improve staff health, fitness and morale
- Improve your company's environmental image (Green Travel Plans and Environmental Policies)
- Reduce corporate parking problems and traffic congestion
- Offer a tangible benefit to staff encouraging staff loyalty
- Zero cost to employer
- Bikes can be treated as a business asset to recover VAT
Please visit www.cycle2work.info for more information.
