Frequently asked questions

How does the GCI Cycle to Work scheme work?

Have a look at our description of the process.

The scheme is for employees of organisations who choose to support their staff who would like to cycle to work.

In summary, for most employees, they would choose a bike and/or accessories from an approved local bike shop or manufacturer subject to a spend limit agreed with the employer. The employer or a finance company then pays the up-front cost and the employee pays back monthly (or weekly/fortnightly where appropriate) over an agreed period through a salary sacrifice.

Because of the salary sacrifice the employee pays less tax during the payback period and the employer pays lower NI contributions.

To comply with HMRC rules the employee is hiring and then loaning the bike for the duration of the scheme. At the end of the scheme the employee can pay £1 to own the bike.

Throughout all of this GCI manages all the paperwork.

How long is the agreement for?

There are two separate agreements:

The Salary Sacrifice Agreement is between the employer and employee and covers the repayment for the bike and/or accessories. This can be for any period longer than three months that both parties are happy with. Common terms are 12, 18, 24 months but it could be for as long as 60 months.

The Hire Agreement is between the employee and GCI. There is an initial formal three month hire period followed by a free-of-charge loan until the purchased items are deemed to have no market value.

Can I still get a bike through the scheme if I’m not currently commuting to work, or commute to work only on some days?

Yes, you can. HMRC rules state that the majority of the use of the bike must be for commuting and this can be over the lifetime of the bike. So if you’re not commuting now but plan to do so in the future, that’s ok.

I am self-employed, can I take part?

Sadly, you will not be able to take part because your tax arrangements are different. You may be able to claim business use for a bike though.

Does an employer have to be registered to take part?

No, an organisation does not need to be registered to use the scheme. There are different processes for employers who are registered, and those who aren’t.

As long as an employer agrees to an individual request it can go ahead. We’d normally expect that if an employer agrees to one person’s request then they will allow it for others.

We already have another Cycle to Work Scheme, can we use GCI as well?

Yes, you can! Organisations can choose to run different Cycle to Work Schemes at the same time.

Please remember GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike some other schemes which charge up to 7% of the full value of the bike. GCI ensures you get the full benefit of the tax-break from HMRC.

Do I need to keep mileage records?

Currently, HMRC don’t require mileage records or any logs. However, please ensure the majority of use is for commuting.

Can I get accessories instead of, or as well as, a bike? What about an electric conversion kit?

Yes, your bike package can be for just a bike, a bike plus accessories or just accessories. This includes items that keep the bike road worthy. Please bear in mind that there is a minimum order value of £100. You can include items such as helmets, bells, lights, child safety seats, clothing, tools and spares.

You cannot include bike computers with or without GPS or waterproof clothing that is not reflective, and also servicing is not included.

You can also get a conversion kit to turn your bike electric. The kit must adhere to EAPC regulations and have a maximum power output of 250w and limited to 15.5mph. All conversion kits must include the battery and charger which cannot be purchased separately.

For the full details refer to the DfT guidance document.

What if I don’t know which shop I want to buy from, or want to get a bike from one shop and accessories from another?

If your employer is registered then they may allow you to create a ‘Commuter Wallet’, which is advanced approval to spend a certain amount across one or more suppliers at a time which suits you. You can create multiple Collection Vouchers up to the value of the wallet.

Where a residual balance of less than £10 remains in the wallet, this amount will be donated to charity the month following the expiry of the wallet. You will be prompted to choose a charity from the nominated charity list. When a charity hasn’t been chosen, GCI will randomly select a charity from the list.

Why do you make a point of saying there’s no £1,000 limit?

It used to be common for there to be a limit of £1,000 in similar schemes, and there may still be for some providers, so we want to make it clear that GCI does not have a limit. It’s up to each employer as to whether they want to set a limit or not.

Is Green Commute Initiative regulated?

Yes, Green Commute Initiative is authorised and regulated by the Financial Conduct Authority. Since you’re hiring a bike from GCI, your employer doesn’t need FCA approval. View our FCA registration.

We are compliant with regulations from HMRC and the Department for Transport.

Is there a maximum on how much I can spend?

Employers can set their own limits for employees. GCI does not set any limits. Even given the financial benefits of the scheme employees should still be sure they will be able to afford the repayments incurred.

Is there anything to pay at the end of the scheme?

GCI does not charge a ‘sting-in-the-tail’ exit fee. Other schemes may charge a percentage at the end – we know of at least one that charges 7% to keep the bike.

If an employee keeps a bike to the end of the free-of-charge Extended Loan period then there is a £1 (yes, one pound) fee to take ownership of the bike.  This is simply a tax marker to protect you from any future claim from HMRC.

The GCI scheme ensures you get the full benefit of the tax-break from HMRC.

If the employee wants to own the bike outright before the end of the loan period they can do so and GCI will advise on the tax implications.

How much money will I save over just buying a bike myself?

You can expect to save between 28% – 47% of the value of the bike through reduced tax and NI contributions. The exact amount will depend on which personal tax band you are in.

Use our savings calculator to find out exactly how much you will save on your bike package.

Will I lose my tax-free benefit if I leave my employment before the end of the agreement?

When an employee leaves before the end of the agreement, any outstanding amount on the Salary Sacrifice Agreement must be repaid within 14 days of leaving the employment. The outstanding amount can be taken from employee’s gross salary as long as it does not take them below minimum wage – this means they still receive the tax-free benefit.  If this does not fully cover the outstanding amount, the money can be taken from the employee’s net salary or the employee can pay it through their own means. However, this does mean that the employee loses the tax free benefit on any amount not paid via their gross salary.

Taking part in the scheme would take me below National Minimum Wage, what can I do?

Employees are not able to take part in a salary sacrifice scheme if doing so would take them below the National Minimum Wage.

Employees are encouraged first to look at potential lower-priced packages and/or longer repayment periods if available.

If this is not possible, some of our registered employers offer a net salary reduction scheme to lower paid employees which we call ‘Everyone Cycle’. We also offer short-term bike subscription packages.

Employers may also offer pool bikes.

Will my state benefits be affected by salary sacrifice?

Where a salary sacrifice arrangement is used your gross pay is affected which in turn impacts upon your tax and National Insurance Contributions (NICs). As entitlement to some benefits is based on the amount of NICs that are paid and others on earnings, entering into a salary sacrifice arrangement may affect your current or future entitlement to a range of benefits. This is not something that GCI are able to offer advice on and you should seek independent financial advice if concerned.

Will salary sacrifice affect my workplace pension?

Yes, reducing your gross salary will most likely reduce your pension contributions which in turn affects your final pension pot.

However, your employer might have different pension arrangements in place. Please consult your pension provider for more details.

Do I need to pay the bike shop a deposit?

We recommend that employees place a deposit to secure a bike.

If you do proceed, the deposit will be refunded back to you by the shop when you collect your bike and give them your Collection Voucher.

If the bike shop has had to place a special order for you, they may decide to withhold the deposit if the deal does not go through. You should ensure both you and the shop are clear on this point.

How does GCI make money?

We charge a commission to bike shops and manufacturers.  This is just 5% which is used to cover our costs as a not-for-profit organisation.

Should I include the cost of delivery in my bike package?

Yes, you should include this in the total price of the package.

What if GCI goes bust? Do I lose the bike?

As a social enterprise, GCI’s constitution prevents it from incurring debts which means that it cannot go bust and no one else can have any claim on its assets.

In today’s retail environment this is a vital safeguard.

Who owns the bike?

GCI owns the bike for the duration of the hire and loan periods but we’re contractually obliged to hire it to you during the hire period, and always offer an ongoing loan. At the end of the loan period you can pay £1 to own the bike/accessories.

If you want to own the bike before the end of the loan period you can choose to do so and GCI will advise you on the tax implications.

What if the bike is stolen?

You must continue to repay your employer for the cost of the Collection Voucher. GCI will terminate the Hire Agreement and you won’t owe GCI anything. It is strongly recommended that you insure the bike.

Can I insure a bike that is owned by GCI?

Yes, you can. Just tell the insurer that you are taking part in a Cycle to Work Scheme. Due to FCA rules, GCI cannot recommend a specific insurer.

Laka and Sundays offer our customers 30 days free insurance – you can find the information here greencommuteinitiative.uk/bicycleinsurance-specialoffers/ 

What if the bike breaks down or needs repairs?

Most new bikes come with at least a 12-month manufacturer’s warranty to cover any faults that may develop (unless you get a second hand bike with at least a three month warranty). However, you are responsible for any repairs required that are not covered under warranty.

Can I sell the bike?

Not until you have gone through the process to own the bike during or at the end of the Extended Loan Agreement, unless we agree otherwise in writing.

Who else can ride the bike?

You can allow anyone over 14 years old to ride the bicycle, however you are still responsible for it.

Can I have more than one bike?

Providing your employer agrees, yes you can.

Can I buy a second-hand bike?

Yes, you can get a second-hand bike through the scheme as long as the retailer provides the bike with at least a three month warranty.

What types of bikes can I get?

You can get anything that’s classed as a bicycle under the Road Traffic Act. This includes ebikes (limited to 250w and a maximum speed of 15.5mph), road or off-road bikes, folders , cargo bikes, and disability cycles.

Scooters are not allowed.

What if a spare part is included and it wears out?

If the part is covered under warranty you will be able to get it replaced for free, otherwise it’s your responsibility to replace it if needed. There is no requirement to keep or tell us about worn out parts.

How do I find an approved bike shop or manufacturer?

You can search for an approved shop here greencommuteinitiative.uk/gci-registered-bike-shops/

The list of approved manufacturers from whom you buy direct is here: greencommuteinitiative.uk/buying-directly-from-a-bicycle-manufacturer/

What if the shop I want to use isn’t signed up?

Most bike shops are delighted to work with GCI because they get more customers. You can suggest to them that they register with us.

At this time, we do not deal with Halfords, Cycle Republic or Wheelies because they only accept vouchers from the Halfords scheme.

There isn’t a shop near to where I live or work. What can I do?

Many of our registered shops will ship orders directly to you and the cost of delivery can be included in the overall package.

You can also buy remotely from manufacturers.

If you want to try a bike out you will need to travel – or use a local non-registered shop but let them know you’re not buying now. You want to be fair and they still want your business for other items.

If there is a local non-registered shop you could suggest they register with us.

Are there shops I can’t use?

At this time we do not deal with Halfords, Cycle Republic or Wheelies because they only accept vouchers from the Halfords scheme.

Occasionally, GCI chooses not to work with a bike retailer for ethical and social reasons.

I’ve found the bike I want cheaper online.

As a social enterprise, GCI is a strong advocate for local independent bike shops who can offer excellent customer service and after-sales care.

Local bike shops will struggle to compete against online only retailers who benefit from bulk order discounts which enables them to offer heavily discounted prices. But this is balanced with a reduced level of customer service which can be diffcult to access when you need them.

Because we don’t work with these retailers you won’t get the tax benefits of the salary sacrifice scheme through us if you purchase from them.

How much money will employers save?

Employers can typically save 13.8% of the total value of the salary sacrifice due to the reductions in Employers’ National Insurance contributions. The savings will reduce if the employer has opted to use third-party finance.

Who provides the third-party finance?

We have a relationship with Akira. Their charges are detailed below but these are more than covered by the employers 13.8% NI saving.

12 month loan – incurs a total interest charge of 8.5% (i.e. £85 interest on a £1,000 bike)
18 month loan – incurs a total interest charge of 10.75%
24 month loan – incurs a total interest charge of 13%

With third party finance, is the employer or employee responsible for the loan repayments?

Finance taken out with a third party is between the employer and the finance company and the employer will repay the loan. The employer recoups the money from reduced salary payments, minus the interest charge on the loan.

Akira can time their payments so they are due after the salary payment date.

I’m VAT registered. Can I reclaim the VAT on the Collection Voucher?

VAT has been payable by employees on salary sacrifice schemes since 2012. As a VAT registered business, you can either claim the VAT back on day one and then at the end of the salary sacrifice issue an invoice to the employee for the gross amount of salary sacrifice including VAT. This invoice is shown as paid via salary sacrifice, so the employee doesn’t pay twice (the salary sacrifice amount includes VAT). Or you can simply not claim back the VAT, making a note in your accounts to this effect. We recommend the second method but either is fine. As long as the VAT is paid HMRC is happy.

Will it create lots of administration for my organisation?

No! GCI handles all the admin using standard templates for the Salary Sacrifice Agreement and the Hire Agreement which are sent out electronically. Once those have been signed, GCI ensures all parties receive their copies and send out the Collection Voucher.

For Corporate GCI customers, a scheme manager does need to be appointed to oversee the portal. The scheme manager sets parameters, approves or reject applications, and checks their progress, informing staff of the status of the application but it’s not overly onerous and shouldn’t take too much time away from other tasks.

What is a proforma invoice?

The proforma is simply a quote and not binding on anyone unless it’s paid.

Can I procure through a framework agreement?

Yes you can.

Framework agreements are typically used by public-sector bodies such as health trusts and councils.

Green Commute Initiative is a supplier on the Crown Commercial Services – Employee Benefits and Services framework (RM6273).

We’re also on NHS Shared Business Services: Sustainable Transport and Infrastructure Framework Agreement Reference: SBS/10235

There are other Cycle to Work schemes. Why should we choose GCI?

Our key differentiator is that GCI is the only scheme set up as a not-for-profit social enterprise whose constitution prevents it from taking on debt. Therefore, it can never have creditors and cannot become insolvent. This means the bikes are safe and will always end up with the employee. No other provider can currently offer this safeguard.

We have a great reputation for efficiency with many automated processes, particularly if you become one of our registered Corporate GCI members with your own portal.

We offer some services over APIs for bike shops if you have the technical capability to use them.

We are always available to offer advice.

We also don’t charge fees to the employer or employee and so you both get the maximum financial benefits from the scheme.

How do I sign up to become a registered bike retailer?

Fill in your details and we will send you an information pack.

You will need to provide some information such as insurance details and sign up to a code of conduct. This will all be explained in the process.

Once you’ve signed the reseller agreement, we will add you to our online store locator and then we are ready to go!

Does my bike shop need to be VAT registered?

Yes, GCI cannot work with bike retailers who are not VAT registered.

Do you charge me commission?

Yes, we charge 5% commission which is lower than other schemes which can be as high as 17.5%. The scheme is popular and is a good way of generating additional revenue from customers who otherwise would not buy from you.

How do I get paid and how quickly?

You provide a quote to an employee of a company which if approved results in them getting a Collection Voucher for the value of the bike and/or accessories. The employee can collect their bike upon presentation of the Collection Voucher and ID. You then redeem the voucher using GCl’s payment portal and we typically pay within 24 – 48 hours (except at weekends).

We pay using Faster Payments via internet banking so you won’t have to wait long for the payment to hit your account.

We have also signed up to the Prompt Payment Code.

How does invoicing work?

GCI uses self-invoicing as part of its agreement with bike shops. GCI prepares the shop’s invoice for the bike package and forwards a copy to the shop along with the payment. This ensures the invoice accurately reflects the ordered package and the shop has the confidence that the paperwork is fully compliant with VAT regulations. It also helps with GCl’s fast turnaround times.

There is a unique code on the self-invoice that enables the shop to link it with the employee’s Collection Voucher.

What can I sell on the scheme? What if someone wants something that’s not included?

In addition to selling anything that’s classed as a bike/cycle, you can include, or sell standalone, accessories that contribute to safety, including keeping the bike roadworthy. You can include items such as helmets, bells, lights, child safety seats, clothing, tools and spares.

You cannot include bike computers with or without GPS or waterproof clothing that is not reflective. You also cannot include servicing or power meters.

You are only permitted to sell ebikes limited to 15.5mph and 250w power output as only bikes that can be used on public roads may be acquired through the scheme. Any ebike that goes over these limits cannot be legally used on UK roads and therefore cannot be used to cycle to work. Please refer to your Reseller Contract and GCI’s Supplier Code of Conduct for further information.

You can also sell electric conversion kits that adhere to EAPC regulations and have a maximum power output of 250w. All conversion kits must include the battery and charger which cannot be purchased separately.

If the employee wishes to buy anything else they may do so as a normal private transaction with you.

Can I charge a non-refundable deposit?

We recommend that employees pay a refundable deposit to secure a bike which you refund to the original form of payment when they collect the bike and give you the Collection Voucher, or if they are unable to proceed (e.g. if their request to join the scheme is turned down).

There is an exception if you have had to place a special order and the sale does not proceed.