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Nothing. We don't charge a fee or any administration costs to set up and run your Cycle2Work scheme. We have simple, speedy online processes that maximise choice for the employee and minimise effort for the employer, but you will need some internal administration resource such as payroll involvement.Who do I need to involve from my organisation to launch a scheme?
Anyone in your organisation can promote and manage the process. An authorised representative must sign Halfords' Supplier Agreement and the Hire Agreements between the organisation and the employee.How long should my scheme be open to my employees?
We can run windows of any length, but we recommend a window of about a month as we find that having a targeted approach makes schemes more successful.Do you only supply Halfords bikes?
No. We have the widest range of bikes and accessories in the UK through our 460+ Halfords stores, 21 Cycle Republic stores and the network of independent bike shops we work with. We have something from everyone; from beginners to enthusiasts and road cyclists to mountain bikers, including the biggest national and global brands.
There are a small number of products on Halfords.com that are not sold and sent by Halfords. Unfortunately these are excluded from Cycle2Work.
The cycle to work legislation doesn’t include a list of ‘approved’ products so HMRC stipulates that a common sense approach should be taken. Permitted equipment includes:
- Cycle helmets conforming to European Standard EN 1078
- Bulb horns
- Lights including dynamo packs
- Mirrors and mudguards
- Cycle clips and dress guards
- Panniers, luggage carriers and straps
- Locks and chains that safely secure your cycle
- Pumps and puncture repair kits, tool kits and tyre sealant to allow for minor repairs
- Reflective clothing and reflectors
- Child seats
Accessories that are not available include forks, frames, Sat Navs, cycle computers, Go pro cameras, turbo trainers and cycle racks. Items such as frames and forks are cycle components not safety equipment: safety equipment is something you add to the cycle or the cyclist to make cycling safer. If an employee were to access cycle components through the scheme, the 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.
More detail on HMRC guidance is available hereCan a Letter of Collection be used to get a bike for a family member, partner or friend?
No. The bike must be used by the employee, mainly for commuting to work. That includes journeys made between the home and workplace, or part journeys (e.g. to the station), or journeys between one workplace and another.When can the employee 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 presents 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.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. The employer is loaning the equipment to the employee for a fixed-period of time.Can an employee enter into more than one Hire Agreement at the same time?
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 choose to remove this option restricting employees to one hire term at a time.What if an employee leaves early or is made redundant?
If an employee leaves before the end of the hire period the outstanding balance of the amount is deducted from their final net pay. They may then have continued use of the equipment without further payment until the hire period expires. Then you may offer them the opportunity to purchase the equipment for its fair market value. Transfer of ownership is the subject of a separate agreement and is not governed or influenced by the Hire Agreement for this scheme.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 my employee doesn’t use the bike for commuting after they’ve joined the scheme?
If the bike is not primarily used for commuting then employees will no longer qualify for the tax relief for this benefit; your payroll department need to arrange for the remaining salary reductions to be taken from the employees' net pay.What happens at the end of the hire period?
There is no automatic entitlement for your employees to take ownership of the cycles and safety accessories at the end of the hire period. However, you may choose to give them the option to transfer ownership.Will joining Cycle2Work affect employees’ pension or other 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.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.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 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.uk
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