By Daniel Hunter
Leading Peterborough accountants Rawlinsons have recorded a surge in clients asking for information about the cycle to work scheme which offers tax exemptions for the provision of 'company bikes'.
“Since the incredible results Team GB’s cycling team had both in the velodrome and on the road more and more people have been encouraged to take to two wheels,” said partner Ken Craig.
"Biking to work is the ideal starting point for those keen to become hobby cyclists and the schemes that are available make it beneficial to companies to help their staff get in the saddle.”
The government’s cycle-to-work scheme allows businesses to offer their employees use of a bike without it counting as a benefit in kind liable to tax or National Insurance. After a year, employers can sell or give their bike to an employee. Even then, as a benefit in kind, the amount chargeable to tax is quite small.
“The figures stack up well,” said Ken. “A bike which costs less than £500 when new can be given to an employee after a year and trigger a benefit in kind charge of just 18% of its original price. So an employee who pays basic rate tax would owe just £18. It’s a very beneficial deal all round.”
There are basic conditions — namely that bikes must be offered to all employees, employees mustn’t own the bikes at the outset and they must be used for mainly work-related journeys although there is no requirement to keep a record of use.
“The benefits aren’t just financial,” said Ken. “Biking fits well with 21st century travel plans and enhances the eco-credentials of companies. It also helps employees get — and keep — fit which increases well-being.”
Staff at Rawlinsons are now working with a number of clients to introduce the cycle to work scheme.
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