There has been a “huge” increase in interest and demand for cycle-to-work scheme since the coronavirus crisis began, a leading employee benefits consultancy has said.
As more people begin returning to work, it is thought that more workers will take up cycling to avoid public transport. Bike chain Halfords has reported that sales of some cycling equipment had risen by 500% since the lockdown, and bike sales have doubled this month.
Cheryl Brennan, Director of Corporate Consulting at Howden Employee Benefits & Wellbeing, said that the tax benefits on offer to employees who buy a new bike from official stores through cycle-to-work schemes are also continuing to fuel interest.
Brennan said that Howden Employee Benefits & Wellbeing has seen growing demand from clients keen to set up cycle-to-work schemes following the government announcement to ease lockdown restrictions on 10th May.
Brennan said: “Since the Prime Minister’s announcement, we have seen a surge in employers wanting to set up cycle-to-work schemes. Such schemes can have a really positive impact on employees’ overall health and wellbeing, they are a tax-efficient employee benefit and cycling offers obvious environmental benefits.
“We anticipate more firms will offer such schemes as part of their overall health and wellbeing programmes in the coming months. However, they need to set up the scheme properly and ensure they communicate the benefit clearly to employees.”
Cycle-to-work operates as a ‘salary sacrifice’ employee benefit[iii]. The salary sacrifice is taken from the employee’s gross salary (before tax), which means they will pay less Income Tax and National insurance.
Employer savings relate to National Insurance Contribution rates, meaning that, in general, employers contribute 13.8% to employee NICs and can, therefore, generate up to 13.8% savings on any funds processed via salary sacrifice.
Brennan said: “A cycle-to-work scheme is open to employers of all sizes across the public, private and voluntary sector. Organisations can set up and run their own salary sacrifice scheme or choose a cycle-to-work scheme provider.
“We can offer tailored advice to employers on the best approach and how to implement a scheme quickly and efficiently. We specialise in intelligent employee benefits and help employers find and provide benefits that people really value because they genuinely improve their lives.”