A government-backed scheme introduced by the University makes it easier for staff to cycle to work – and save money at the same time
In a cycle-savvy place such as Cambridge, many of us who can cycle to work are doing so. The 2007 University Travel Survey showed that 39 per cent of employees use a bike to get work, compared with a national average of 19 per cent of all workers.
Despite having what could be described as a green transport profile, the University is committed to helping more staff travel to work in a healthy and environmentally friendly manner.
Cycling remains a central part of that commitment, as the Human Resources Division’s recent implementation of the government’s Cycle to Work initiative shows. Under the scheme, employers lease bicycles and associated safety equipment – usually over a 12-month period – to staff through a salary sacrifice scheme.
Salary sacrifice occurs when an employee agrees to give up part of their pay in return for some kind of non-cash benefit. Savings are made because salary sacrifice reduces gross salary before tax and National Insurance are deducted, so the amount paid for both is also reduced.
At the end of the hire period, employees have the option of purchasing the bike at a fair market value, typically 5 per cent of the original value plus VAT.
Anyone is eligible to join, as long as they have 12 months remaining on their contract of employment. Staff are expected to use the bike for ‘qualifying journeys’ – getting to and from work and from one building to another.
The fine detail of the Cycle to Work scheme operates as follows:
• Employees choose a bike from an approved supplier worth up to £2,000 including VAT. Second-hand bicycles are excluded but you can add safety equipment such as helmets and lights.
• The University scheme is run in collaboration with Cyclescheme, which helps the government administer tax-free bicycles and equipment for participating employers. Once staff know which model they want to buy, they fill in an online voucher via the Cyclescheme website (non-computer users can call the company on 01225 448933 to place their order) and sign the hire agreement online (or by post if they have used the number above).
• Cyclescheme then posts a secure voucher to the employee that can be redeemed at the bike shop with University photo identification.
• The employee pays monthly reductions from their gross salary via salary sacrifice.
The bike remains the property of the University throughout the hire period but the employee can potentially purchase the bike at a fair market value plus VAT at the end. For a 12-month-old bicycle, that cost is estimated to be around 5 per cent of the original price.
How much you save depends on your salary tax band. Cyclescheme has an online calculator (see Find out more box) that enables you to estimate this and the cost of monthly hire.