As an employer, there are many benefits to be gained from offering a cycle to work scheme, both directly and indirectly. Straight away your organisation will save money from reduced National Insurance payments, and you’ll also have more car parking spaces available. Your employees will generally experience:
✓ A happier demeanour
✓ A healthier lifestyle
✓ Improved mental wellbeing
✓ A ready-to-work attitude
✓ Effective working
✓ Punctual attendance
All of these will surely make a happier workplace for everyone in your organisation and improve staff retention. And don’t forget about all the environmental benefits too. With all these positive benefits from cycling to work, you will have lots to support your action on corporate social responsibility.
How the scheme works
Essentially your employee hires the bike through Green Commute Initiative for a 12-month period. Why hire and not buy? These are the rules set by HMRC which all cycle-to-work schemes work to. GCI is also authorised and regulated by the Financial Conduct Authority. It’s because of this that GCI can offer bikes over the traditional £1,000 limit. At the end of the scheme, ownership can pass to the employee.
Now the rest of the paperwork needs to be completed. Firstly, we need to deal with how the voucher will be paid for. There are two financial mechanisms you can use to acquire the GCI vouchers:
You can pay for the vouchers immediately and then we’ll release the bikes to your employees. It means there might be a slight delay in your employees getting their bikes but if you pay the invoice quickly, this can be minimal and there is no cost to you.
Once the voucher has been paid for, you’ll want to know how to get your money back from the employee. It’s quite simple really, they accept a new rewards package where they give up or sacrifice part of their cash salary in exchange for the non-cash benefit of the bike. Hence the term ‘salary sacrifice’. The salary sacrifice arrangements are between you, the employer, and the employee, and are independent of the 12-month hire period they will have with GCI. As their employer you can choose a 6, 12, 18 or 24-month repayment period, but you should discuss this with your employee so its agreeable to you both.
Green Commute Initiative provides an HMRC compliant Salary Sacrifice Agreement and also the Hire Agreement. We use state-of-the-art electronic document signing so there is no need for time consuming paper documents.
All that remains now is for GCI to send the employee the voucher to take to the bike shop to claim their bike package and start cycling to work, reaping all the benefits it will bring to their lives.