As more businesses prepare for further easing of restrictions and gradually gear up for a return to the workplace, employers must consider how their workers can safely travel to their place of work.

It is expected that the level of traffic on our roads will rise and there will be an increasing pressure on the public transport network as social distancing measure reduce capacity and change the way that we travel. In addition, Transport Secretary, Grant Shapps announced on 4th June that face coverings are to be become compulsory on public transport in England  from 15th June.  

Walking and cycling where possible will reduce pressure on the public transport system and the road network and the latest advice from the World Health Organization is that “whenever feasible”, you should consider cycling or walking for essential journeys. This is where a cycle to work scheme could pay dividends.

What is a cycle to work scheme?

Cycle to work is a Government initiative introduced in 1999 to encourage cycling as a means of transport to work. All public, private and third sector employers can run a cycle to work scheme and all employees in an organisation can hire bicycles and safety equipment through the scheme.

What are the benefits?

As well as supporting employees to secure a new bike at a reduced cost and commute to work more cheaply, the key benefits to you as an employer include:

  • A cost effective means of enhancing positive engagement with your employees
  • Support for employee health and wellbeing which could result in increased productivity and reduced sickness absence
  • It is environmentally friendly and reduces carbon footprint
  • Secure savings on National Insurance Contributions
  • A reduced need for employee parking spaces and associated costs

How do these schemes operate?

You can offer a loan scheme or a workplace pool cycle mode. Under a loan scheme you will provide a loan to an employee to purchase a cycle for active travel and/or safety equipment for their individual use. Such loan schemes may be subject to regulation by the FCA.

Under a pool scheme the employer will purchase a suitable fleet of cycles for active travel and make them available for employees either on a one to one or pool  basis.

Salary sacrifice

Under a salary sacrifice arrangement your employee will agree to give up a part of their pre-tax salary in exchange for the benefit of the hire of a cycle for active travel and/or safety equipment. The employee spreads the cost and makes savings on their tax contributions and as the employer you make a saving of 13.8% on National Insurance Contributions.

Researching the options

Before deciding on a cycle to work scheme it is advisable to:

  • review the company benefits package and identify whether employees would find such a scheme beneficial
  • consider whether to administer the scheme in-house or to through a specialist provider
  • Decide whether to loan the equipment free of charge or through a salary sacrifice arrangement