FAQs

About the scheme

  • How does GCI work?

    Your employer buys a voucher which entitles you to the hire of a bike of your choice directly from us. Because we’re authorised by the FCA there is no £1,000 limit.

    The cost of the voucher is the same as the bike so for a £1,500 bike the voucher is £1,500.

    You repay the cost of the voucher by sacrificing a part of your gross (before tax & NI) salary. This means you save the tax and NI that you would pay if you bought the bike from your net (after tax) pay. Your employer also saves 13.8% employer’s NI. So it’s worth them doing it.

    At the end of the initial hire period we can’t give you the bike because you would incur a tax liability. So we make you a free of charge loan of the bike for five years. After which you can buy the bike from us for £1.

    We manage all the end of scheme arrangements so there is nothing for your employer to do and best of all no end of scheme sting as there is on old fashioned Cycle to Work schemes.

  • Is this HMRC approved?

    Yes.  You can see the confirmation in the third paragraph on the Employment Income Manual page of their website.
    “The exemption also covers the provision of a voucher for hiring bicycles and equipment.”

    One of the big four accountancy firms said:
    “Our review of the GCI documentation has confirmed that the scheme arrangements are
    robust and comply with the relevant legislative exemption in respect of cycles and cyclist’s
    safety equipment.”

    Please ask us if you would like to see a copy of their report.

  • 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 of the voucher cost.  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 Ltd.  This is for 12 months and is unaffected by the length of the salary sacrifice.

  • Why no £1,000 limit?

    Green Commute Initiative is authorised by the Financial Conduct Authority for consumer hire up to any value.  Since you’re hiring the bike from GCI, your employer doesn’t need FCA approval.   View our FCA registration

  • Does the scheme just offer E-bikes?

    No, you can get a normal bicycle through the scheme.  You can choose from E-bikes, road or off-road bikes, folders or cargo bikes.  If it’s a bicycle under the Road Traffic Act, it qualifiers.

  • Is there a maximum on how much I can spend?

    The maximum limit is £10,000 but employers can set internal limits for employees which could be calculated as an actual amount or a multiple of a month’s gross salary.  Sound judgement should be made when considering if an employee can actually afford an expensive bike package.

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

    No.  GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike 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.  After the free of charge five-year loan period, there is a nominal £1 fee to transfer title ownership over to you.  GCI only charges the £1 so that it can demonstrate to HMRC when the transaction took place to protect you from any claim from them.

  • How much money will my employer 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 slightly if the employer has opted to use third party finance or if 30-day terms has been agreed.

  • How much money will I save?

    This all depends on which income tax-band you are in.  This coupled with your national insurance contributions will give you the percentage of what you’ll save from your gross salary.

    Example
    Basic Taxpayer Rate = 20%.
    National Insurance contributions = 12%.
    Total saving = 32%

    Higher rate tax payers can save as much as 47%.
    To find out how much you will save on your bike package, use our savings calculator.

  • 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 loan must be repaid within 14 days of leaving the employment.  However, the final salary payment must not take them below the minimum wage.  If the outstanding amount owed is not fully covered by the final salary payment, the employee must pay it through their own means.  This will mean that they lose the tax free benefit on any amount not paid via their salary.

  • I’m a Director of my own company, can I take part?

    If you pay PAYE as a Director you will qualify, providing the required salary sacrifice doesn’t take you below the minimum wage.  You may wish to consult your accountant for advice.

  • 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 the bike though.

  • Taking part in the scheme would take me below national minimum wage, what can I do?

    HRMC says that once implemented, a cycle-to-work scheme must be available to all employees with no groups of employees excluded.  However, a salary sacrifice arrangement cannot be used if in so doing the employee’s gross pay drops below the NMW.  To avoid this, the employee could be offered a lower value cycle package and/or a longer than usual hire period.

    Where employees are paid at NMW and salary sacrifice not permitted, employers must make an alternative offer.  This could include loaning a bike without salary sacrifice or making available a pool of bikes for those staff to avoid them being excluded from the offer of a cycle.

  • 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.

  • 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.

  • Who provides the third-party finance?

    We have relationships with several finance companies, Akira being one of them.  There is an 8% charge when using third party finance but this is more than covered by the employer’s 13.8% NI saving.

  • 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 as such, the employer will repay the loan.  The employer recoups the money from reduced salary payments, minus the commission on the loan.  The cost of the loan is more than covered by the employer’s reduced National Insurance payments.  The employer still saves money.

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

  • Do I need to pay the bike shop a deposit?

    The bike shop may wish to charge a deposit in order to secure the deal, however they should refund this back to you in the event your organisation decides to not take part in the scheme.  If you do proceed, the deposit will be refunded back to you when you collect your bike.  However, if the bike shop has had to place a special order for you, they may decide to withhold the deposit in the event the deal does not go through.  You should ensure both you and the shop are clear on this point.

  • I’m VAT registered. Can I reclaim the VAT on the 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 are happy.

  • Is my organisation already signed-up?

    Your organisation does not need to be signed up for you to use Instant GCI.  Instant GCI works on an individual basis, so as long as your employer agrees to your request, you can go ahead.  If they have already allowed other individuals to take part in the scheme, it is likely that the scheme will be advertised internally on either staff noticeboards or the intranet.

    For Corporate GCI, your organisation will have an GCI code which allows you to access the dedicated portal.  Your HR department or intranet will provide this.

  • We already have a cycle-to-work scheme, can we have GCI as well?

    Yes, you can!  Organisations can choose to run different cycle-to-work schemes at the same time.  There are no rules that say otherwise.  Some clients use their current providers for traditional bikes under £1,000 and GCI for bikes over £1,000.

    Please remember GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike 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.  After the free of charge five-year loan period, there is a nominal £1 fee to transfer title ownership of the bike.

  • 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 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 deal.  But it’s not overly onerous and shouldn’t take too much time away from other tasks.

  • What happens when an employee leaves their employment before they have repaid all the money?

    When an employee leaves before the end of the agreement, any outstanding amount on the loan must be repaid within 14 days of leaving the employment.  However, the final salary payment must not take them below the minimum wage.  If the outstanding amount owed is not fully covered by the final salary payment, the employee must pay it through their own means.  This will mean that they lose the tax free benefit on any amount not paid via their salary.

  • What is a pro-forma invoice?

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

  • What is a framework agreement?

    This is an agreement between a contracting authority and one or more of its suppliers.  Its purpose is to establish the terms (e.g. price) governing contracts to be awarded during a given period.  Usually, framework agreements are compliant with all UK/EU procurement legislation.

    Typically, framework agreements are used by public-sector bodies such as health trusts and councils, and often they will be shared with other public-sector bodies to appoint suppliers.  This enables other organisations to avoid the tender process, thus saving time and money.  The maximum duration of a framework agreement is four years.

    Green Commute Initiative continues to work with councils and health trusts and has put together a framework agreement with Somerset County Council.  This has subsequently been used by other public bodies.

Resellers questions

  • How do I sign up to become a registered reseller?

    Simply fill in your details and we will send you an information pack.  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 resellers who are not VAT registered.

  • How much commission do you charge?

    On Instant GCI orders, we charge a 5% commission.  For Corporate GCI this rises to just 7.5% to cover the extra costs involved.  As you can see, our commission rates are much lower than other schemes which can be as high as 17.5%, and with our higher order values, you stand to make much more money with GCI.

  • How quickly will you pay me?

    GCI aims to pay resellers within 24 hours of payment being made to us by the employer.  This is done through internet banking so you will have the money in your bank almost instantly.

  • What is a self-invoice?

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

    It is through the self-invoice that the reseller receives the unique voucher code to match up with the employee’s voucher.

About the bike

  • Who owns the bike?

    GCI owns the bike for the duration of the hire but we’re contractually obliged to hire it to you.  At the end of the scheme you will be offered an extended free loan.  A part of the loan agreement is that GCI appoints you as our agent to dispose of the bike to a third party of your choosing.

  • What if GCI goes bust?

    GCI Ltd.’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.

  • What if the bike is stolen?

    You must continue to repay your employer for the cost of the 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 doesn’t belong to me?

    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 so simply do your own research online.

  • What if the bike breaks down or needs repairs?

    All the bikes GCI hires come with a 12-month warranty to cover any faults that may develop.  However, you are responsible for any repairs required that are not covered under warranty.

  • Can I sell the bike?

    Not until the end of the extended free loan period, 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.

  • 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 have more than one bike?

    Providing your employer agrees, yes you can.

  • Can I buy a second-hand bike?

    You cannot have a second-hand bike or just the kit to convert a normal bike to an e-bike.

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

    Most resellers (bike shops) are delighted to work with GCI because it’s a much better deal for them (and therefore you).  Ask them to get in touch to become a registered reseller.

    We cannot deal with Evans or the Halfords Group (Halfords, Cycle Republic, Tredz or Wheelies) because they will not take other provider’s vouchers as they run their own schemes.  GCI supports local bike shops and therefore does not work with the big online-only suppliers.

  • Are there suppliers I can’t use?

    Yes, GCI does not deal with the Halfords Group (Halfords, Cycle Republic, Tredz, wheelies) or Evans. because they run their own schemes and do not take other providers’ vouchers.