You can save on the cost of a bike and safety equipment, thanks to a partnership between the University and Cyclescheme.
How to go about making a saving with Cyclescheme
Important notes
The whole process takes two to three weeks on average from entering your quote on the website.
Please have a look at our frequently asked questions below and the FAQs on the Cyclescheme website. If you want to check the progress of your application or have any queries that are not answered below, email Vikki Pendleton.
I'm a student/postgraduate, can I take part in the scheme?
Evans/Halfords run their own schemes - can I buy a bike through one of these?
What if I want to buy a bike that costs more than £1000?
Why do I need to pay an additional sum after the initial 12-month period?
I've already participated in the scheme once, but I want to get a new bike. Can I do it again?
The way salary sacrifice works is that the total value of the bike is deducted from your gross salary so that you do not pay tax or national insurance on the amount you have ‘sacrificed’. Therefore the total deductions shown on your payslip will match the total value of the voucher, but you are paying less tax and NI than you would normally do.
To participate in the scheme you must…
Scheme guidelines state that you should also:
The Cyclescheme savings calculator can give you an approximate guide. Click on 'advanced details' and enter the University's employer code, 35222; please note the University cannot claim back VAT.
The Cyclescheme calculator may be inaccurate if your earnings lie between the bottom of the 40% tax bracket and around £50000. If you are concerned about how much you will save for this reason, please contact a member of Finance.
Staff in the BPAS, USS, or NHS pension schemes with earnings below £40040 will save marginally less than the figure quoted by Cyclescheme. This is because you already pay a slightly reduced rate of NI, at 10.4% rather than 12%, as these schemes are contracted out of the state second pension. The likely rate of saving is therefore 20% in tax and 10.4% in NI, i.e. 30.4% of the value of the bike. It should be noted that this will be a difference of no more than £16 from the quote given by the Cyclescheme calculator.
You also need to make a small payment (to reflect the final market value of the bike) after the initial 12-month period.
There is no minimum spend. However, Cyclescheme supports local independent bike shops, and the cheapest bikes tend to cost around £200. This may seem quite expensive, but once you take into account the salary sacrifice saving of around 30%, you are left with 12 monthly payments of £11.77; there is then a small payment (to reflect the final market value of the bike at the end of the hire period) to buy the bike at the end of the scheme.
Unfortunately this sort of scheme is only available to tax payers. This is because the savings are a result of salary sacrifice, which means that the total value of the bike is deducted from your gross salary before tax or NI are paid, and tax and NI are only paid on the rest of your salary. If you do not pay tax, you cannot take part in a salary sacrifice scheme.
Evans 'Ride2Work' and Halfords 'Cycle2Work' schemes are separate to the scheme run by the University, and as an employee of the University you cannot buy a bike using these schemes. When we set up the scheme, we consulted with staff as to which scheme to go with; we chose the Cyclescheme as it offered a wide choice of local independent shops which have a high level of after-sales service.
However, as of 26 September 2011, Evans is also a Cyclescheme partner, and you can now order a voucher for a bike from Evans via Cyclescheme. It is still not possible to buy a bike from Halfords through the University's salary sacrifice scheme.
This scheme only covers bike packages up to £1000. If you want a package costing over £1000, you should discuss this with the bike shop.
The way that cycle-to-work schemes operate, as set down by HM Revenue and Customs, is that the employer buys the bike and then leases it to the employee. Therefore at the end of the hire period a small payment must be made in order for the employee to buy the bike from the employer. The exact amount cannot be stated until the end of the scheme due to HMRC regulations.
Following a new ruling from the HMRC, in order for the University to continue to charge a relatively low final market value, for vouchers purchased after 1 April 2011 this payment will be taken from your salary three years after the final salary deduction.
If you leave the University within three years, the payment will be taken from your final salary instalment.
The way salary sacrifice works is that the total value of the bike is deducted from your gross salary so that you do not pay tax or national insurance on the amount you have ‘sacrificed’. Therefore the total deductions shown on your payslip will match the total value of the bicycle, but you are paying less tax and NI than you would normally do.
There's no reason why you can't go through the scheme more than once, provided you still fulfil the criteria and have reached the end of your previous hire period. However, the online form does not allow the same email address to be entered again, so you will need to input an alternative email address. The email address given will be used to notify you that your voucher has arrived in Finance, but will not be used for any other purpose.
There are a few things you should be aware of:
- Please make sure your bike is insured, as if it is stolen during the hire period you will still have to make the remaining payments.
- Once you join this scheme, it is not possible to cancel.
- If you leave the University before the end of the agreed hire period all remaining payments will be taken from your final net salary.
