The key updates made by the DfT are:
– official recognition of GCI’s £1,000+ model
– minimum 12-month salary sacrifice period
– no top-ups allowed
– credit broking consideration
Firstly, it’s important to understand that the legislation has not been changed and despite reports, the £1,000 cap has not been removed. Rather, the guidance now includes the mechanism pioneered by Green Commute Initiative (GCI) to enable providers to exceed the cap. This formal recognition has led to a flurry of activity from other providers, rushing to copy GCI’s model. However, caution must be taken before using new plus £1,000 schemes, as there are finer points to the legislation which may be mis-interpreted, meaning you could end up with a non-compliant scheme.
Fundamentally, with GCI’s model, it is GCI who is hirer of the cycles and as such the hire agreement is separate to the salary sacrifice agreement. As GCI has FCA permission for Consumer Hire, the £1,000 cap is removed.