The Cycle to Work scheme has now been running for 20 years, but recently the government announced a change which will allow you to buy an e-bike tax free.
Previously the scheme was capped at £1000, but there are few electric bikes available for less than this amount, so the government has now removed this cap. This means that employers’ schemes can now provide e-bikes and equipment worth more than £1000.
These changes have been made to promote the use of e-bikes, which the Department for Transport hopes will help tackle congestion and therefore speed up commuting time. The move will also cut travel costs for businesses, as well as reduce air pollution in order to help with the government’s target to reach zero carbon emissions by 2025.
Our director Jonathan Stafford has already bought himself an e-bike and is a big fan! “I always wanted to be able to ride to work, but I didn’t want to turn up looking disheveled. Having an e-bike means I can make the ride as challenging as I want, so I can have a leisurely ride to work in the morning, but then get some real exercise on the way home when it doesn’t matter what I arrive looking like!”
Employees can pay off bikes purchased through the scheme in interest-free installments over 12 months, after which the company can take the bike back. Alternatively the employee can purchase it themselves for ‘fair market value’ (up to 25% of the original value). However, depending on the provider you choose for the scheme there are other options, including leasing the bike for another 2-3 years after which it becomes yours at no extra cost.
Directors of Limited Companies can also use the Cycle to Work scheme, and depending on your tax bracket you could save up to 45%. Alternatively, you can buy the bike and claim the VAT back via your business.
Despite its name, the Cycle to Work scheme isn’t just for work, you are free to use your bike and equipment for leisure purposes too. So find out more about the scheme here and then get on your bike!