Cyclescheme tax-free bikes for work. Find a shop, check your savings and request a Certificate online at:

Transcription

1 Cyclescheme tax-free bikes for work Find a shop, check your savings and request a Certificate online at: The window is open for you to sign-up to Cyclescheme now!

2 Background What is the Cycle to Work scheme? The Cycle to Work scheme is a government initiative to encourage alternative travel and reduce environmental pollution. Not only does it show respect for the environment but enables those who wish to cycle to work access to a tax-free benefit. We work with Cyclescheme, who are the UK s number one provider of the Government s Green Transport Plan Initiative. Cyclescheme offers a great choice of bikes and equipment as they are partnered with over 1,840 independent bike shops throughout the UK.

3 Cyclescheme Help Desk: Telephone:

4 Frequently Asked Questions Who can apply for the scheme? All Newcastle upon Tyne Hospitals NHS Foundation Trust employees can apply for the scheme. How does the scheme work? The Trust will pay for the bike and cycling equipment and then, through a Hire Agreement, you hire them from the Trust for a minimum of 1-year. If you pay tax and National Insurance (NI) you will save money as payments are taken from your pay before tax and NI have been deducted. If you pay into the NHS Pension Scheme your savings will be greater. This is called a salary sacrifice arrangement. Is there a limit on the total value of the bike and cycling equipment that I can hire? There s a calculator on Cyclescheme s website that will work out how much you can spend. Please note the calculator will not show savings you can make on superannuation if you pay into the pension scheme. The highest total value for all employees is 10,000 (including VAT) as the Trust hold a Consumer Credit Licence but your salary cannot go below the National Minimum Wage so it may be less than this. What is a salary sacrifice? A salary sacrifice scheme is where you sacrifice / give up a part of your salary from gross pay (pay before deductions) for an agreed time, in exchange for a non-cash benefit, such as hiring a bike for work. What are my responsibilities? You need to insure the bike to protect it from loss and theft. This is a condition contained within the Hire Agreement that you sign. If your household insurance policy cannot be used to cover the insurance on your bike, you can obtain a 10% discount on insurance policies at or shop around for a policy of your choice. You also need to maintain your bike. All bikes come with a free first service and a minimum of a year s warranty. After this it is then your responsibility to maintain the bike. Your local partner shop will be able to give you advice about ongoing service requirements for the bike. What happens if the bike is stolen before the end of the Hire Agreement? You are responsible for the bike and when you sign the Hire Agreement you are agreeing to insure the bike. If the bike is stolen, your monthly gross salary reductions will continue until the end of the Hire Agreement. Can I come out of the scheme, if I no longer wish to cycle to work? No, Consumer Credit law does not allow the Hire Agreement to be cancelled. Once you have signed the Hire Agreement, all outstanding monies will have to be paid back. Once you have collected the bike there is a 7-day cooling off period when you can change your mind. After this you can t come out of the scheme. What happens if I leave during the year of the Hire Agreement? If you leave, you ll have to pay the total amount left for the year, and you won t benefit from the tax and National Insurance exemptions on this. This will be deducted from your final salary or you will be invoiced for any amount outstanding. Do I need to use the bike for work? Yes, its main purpose should be for travelling to and from work. On making your selection you are confirming that at least 50% of the bike s use will be for eligible work use. Eligible use includes cycling from home to the train station, cycling from the station to work, cycling from home to work (the reverse journeys of these are of course also eligible), cycling from one office to another. There is no special requirement for you to record your trips.

5 Does this mean I have to cycle to work for half the year? No. The percentage of the bike s overall usage is the important factor (50% must be for eligible work journeys). Who owns the bike? The Trust owns the bike for the duration of the Hire Agreement. What is HMRC s valuation for bikes after 12-months? Currently, HMRC estimate that at the end of the 12-month period the bike can be valued at 18% of its original value (for bikes below 500) or 25% of its original value (for bikes equal to or greater than 500). The Trust also has a Condition Assessment process for valuation after 12-months. Details of the Condition Assessment can be found in this leaflet under What happens at the end of the hire period. When will the salary reduction begin? Normally in the month you receive your Certificate. What happens if I do not use the full amount I have selected? It is important to consider carefully the amount you can afford and the type of bike that suits your needs. Once you have chosen your value and completed the Hire Agreement you will not be able to increase or decrease the amount you have chosen. Your salary will be reduced by the amount that you originally agreed within the salary sacrifice letter even if you do not use the full amount. What happens if the Certificate expires before I have selected my bike? The Certificate is valid for 60-days If you are having difficulties using your Certificate by the expiry date, we recommend that you contact the Cyclescheme Help Desk on Can I participate even though I am under 18? Yes, however a parent or guardian will need to sign the Hire Agreement on your behalf. What happens if my salary falls below the National Minimum Wage? The Trust will decline an order if your salary falls below the National Minimum Wage. You will however still be allowed to participate in the scheme. In this case you will be offered a bike Certificate for a fixed amount payable over a period as a net deduction (not a salary sacrifice) for any amount that would allow you to fall below the minimum wage. What happens if I leave during the term? If you leave the Trust for any reason during the term of the hire period you will become liable to pay a termination fee of an amount not exceeding the outstanding Monthly Salary Reductions. The termination fee will be paid from your net salary in accordance with the salary sacrifice letter. If your final net salary is insufficient to pay the fee you will be required to pay the outstanding monies to the Trust within 14-days. DO NOT assume deductions will transfer with you to another employer even within the NHS. Any further questions? Please call the Cyclescheme Help Desk on Cyclescheme Help Desk: Telephone: info@cyclescheme.co.uk

6 How do I apply for the scheme? 1 Use the online calculator to find out how much you can spend and locate your nearest cycle shop by visiting 2 Go to the cycle shop to choose your bike and equipment and get a quotation for the total cost 3 Go back to to fill in your details, request your Certificate and to read and digitally sign your Hire Agreement 4 If your request is approved, you will receive an allowing you to download your approved Hire Agreement* and you will be sent your Certificate in the post 5 Take the Certificate back to the shop to collect your bike and equipment * If you do not have a valid, working address or you are under 18, Cyclescheme will send your Hire Agreement in the post to your home address for you to sign and return. Please call Cyclescheme on to discuss this with them.

7 What happens at the end of the hire period? The bike and cycling equipment remain the property of the Trust throughout the hire period. At the end of the Hire Agreement period, the Trust will: 1. Send you a letter asking you to complete a Condition Assessment Form, which will require information about how the bike has been used and the condition it is in. You will be required to return this within 7-days or will be charged in accordance with the HMRC valuation table. 2. If the Condition Assessment Form is returned, you will receive a second letter giving you three options: a) Take ownership of the bike by paying the Trust the value determined by the Condition Assessment Form. b) Take ownership of the bike and pay the Trust the value in accordance with HMRC s published valuation table. c) Return the bike to the Trust and agree to the Disposal Fee set by the Trust. Cyclescheme Help Desk: Telephone: info@cyclescheme.co.uk

8 Contact information For further information please contact the Cyclescheme Help Desk on: a: Cyclescheme Ltd, PO Box 3809, Bath BA1 1WX t: e: Register online at: