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FAQsWhat happens at the end of the loan period?
There's no automatic entitlement for your employees to take ownership of the cycles and safety accessories at the end of the loan period. However, you may choose to give them the option to transfer the ownership.How much does it cost to set up a Halfords Cycle2work scheme?
Nothing. Halfords don't charge a fee or any administration costs to set up and run the cycle to work scheme. You should factor in any internal administration resource such as payroll involvement.Will a salary sacrifice affect employees' entitlement to benefits?
It's possible, although in most cases any effect is likely to be small. However, your employees need to be made aware of the implications of paying less tax and NI contributions and accepting a reduced salary. They should get professional advice if they have any concerns or need more information.Can you only supply Halfords bikes?
We have the largest selection of bikes and cycling safety equipment in the UK. You can check out a huge range of top brand products from over 800 independent bike retailers and over 470 Halfords and Cycle Republic stores. Find stores in your area here. If they still can't find what they're looking for they can contact the Halfords Cycle2work team, tell them what they need and we'll be happy to suggest the options available.
Products on Halfords.com not sold and sent by Halfords are excluded from Cycle2work.What if a bike is stolen or accidentally damaged?
To protect against this, we recommend that employees take out separate insurance, or check if their bike is covered under their home contents insurance policy. If their insurer covers the bike, they must inform them that you (or their nominated agent) owns the bike. Reductions won't stop or be suspended due to loss or damage to the bike.What if an employee leaves early or is made redundant?
If an employee leaves before the end of the hire period, they must pay their employer the balance of the amount still to pay. This will deducted from their final net pay. They may then have continued use of the equipment without further payment until the hire period expires, when you may offer them the opportunity to purchase the equipment for its then fair market value. However this transfer of ownership is the subject of a separate agreement and is not governed or influenced by the Hire Agreement for this scheme.What equipment is available through the scheme?
Exactly what's covered isn't defined under statute and HMRC stipulates that a common sense approach should be taken. (http://www.hmrc.gov.uk/manuals/eimanual/eim21664.htm) Please see below a list that can be used as a guide on what is and isn't available through Cycle2work:
- Cycle helmets conforming to European Standard EN 1078
- Bulb horns
- Lights including dynamo packs
- Mirrors and mudguards to ensure the riders visibility isn't impaired
- Cycle clips
- Dress guards
- Luggage carriers and straps to ensure luggage is carried safely
- Locks and chains that safely secure your cycle
- Puncture repair kits, tool kits and tyre sealant to allow for minor repairs
- Reflective clothing
- White front reflectors
- Spoke reflectors
- Child seats
- Sat Navs
- Cycle computers
- Go pro camera
- Turbo trainers
- Cycle racks
Please note: Items such as frames and forks are cycle components, not safety equipment: safety equipment is something that is added to the cycle or the cyclist to make cycling safer. If an employee were to access cycle components through the scheme, that Employer's Cycle2work scheme would be non-compliant. As a minimum, HMRC would pursue the employer for incorrect P11D reporting and tax/NIC for the non-compliant items. As HMRC would not be able to determine which employees have chosen non-qualifying equipment or indeed the employer, HMRC could deem the whole scheme non-compliant.
Products on Halfords.com not sold and sent by Halfords are excluded from Cycle2work.Can an employee enter into more than one Hire Agreement concurrently?
An employee can have more than one Hire Agreement for Cycle2work with you at a time. However you must make sure that any combination of Hire Agreements does not take the employee below the National Minimum Wage. You may chose to remove this option restricting employees to one hire term at a time.When can they collect their bike?
If it's in stock at their chosen Halfords, Cycle Republic or one of our partnered independent bike shops, your employee simply surrenders their LoC and presents a form of ID. If it's not in stock, they can have their chosen bike ordered in to that store. Their bike will then be built and inspected by a qualified bike mechanic, ready for them to ride away.How long should my scheme be open to my employees?
To ensure the smooth running of a scheme and encourage take up, we recommend an election window of no more than a month. We find that having a targeted approach makes schemes more successful.What is a group consumer credit license?
Cycle to Work schemes allow employers to loan bicycle and bicycle safety equipment to employees free of any income tax liability. The OFT issued a group licence to cover consumer hire agreements entered into by employers participating in the Cycle to Work schemes. Under the FCA regime, Cycle to Work schemes will be exempt (for a bicycle or cyclist's safety equipment up to the value of £1,000) so an employer will not need to be authorised for the consumer hire activity just because it runs such a scheme. See more at: https://small-firms.fca.org.ukWho can launch a scheme within a company?
Anyone in your organisation can promote and manage the process. An authorised representative must sign Halfords' Supplier Agreement, and sign any leasing document. During the scheme, an authorised representative must sign the employee Hire Agreement so that it can be executed. Please also ensure that you engage HR and Finance from the start.Who owns the equipment?
The legislation states that the employer must own the equipment and there's no automatic right for the employee to own the equipment at the end of the agreement. That's why the Cycle2work scheme operates as a loan. The employer is technically loaning the equipment to the employee for a fixed-period of time.What if my employee doesn’t use the bike for commuting after they’ve joined the scheme?
Employees will no longer qualify for the tax relief for this benefit. If so, your payroll department need to arrange for the remaining salary reductions to be taken from the employees' net pay, i.e., after tax and National Insurance have been deducted.What if an employee can't get to a store, will they miss out?
No, they can still participate. If there isn't a Halfords store near their home or work, or they're unable to visit a store, Halfords can arrange to get the bike to them.Can a Letter of Collection be used to get a bike for a family member, partner or friend?
No. The cycle must only be used by the employee, mainly for commuting to work. For example: journeys made between the home and workplace, or part journeys (e.g. to the station), or for journeys between one workplace and another.They already own a bike. Why would they want a new one?
When your employees cycle more and more, they might need a higher quality bike that helps them to ride more efficiently. In Summer and Winter, they may also take different routes when travelling to work that need different types of bikes..What bikes are available through the Halfords Cycle2work scheme?
Halfords gives employees the choice from the largest selection of bikes and cycling safety equipment in the UK. You can check out a huge range of top brand products in over 800 independent bike retailers and over 470 Halfords and Cycle Republic stores. To find your local store click here. If they still can't find what they're looking for, they can contact the Halfords Cycle2work team who'll tell them what they need and be happy to suggest the options available.
Products on Halfords.com not sold and sent by Halfords are excluded from Cycle2work.How does VAT impact the salary sacrifice process?
We are happy to discuss this in more detail, if you have any questions on VAT and the scheme please contact the Cycle2work team on 0345 504 6444.
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