What is Cyclescheme?

Cyclescheme is an employee benefit that saves you 25 – 39% on a bike and accessories. The payments are taken tax efficiently from your salary by your employer over a set period of time using salary sacrifice.

In the past the cycle to work scheme had a £1000 upper limit, however an update to the guidance now means employees can be offered packages over £1000. In this blog I’m going to discuss the recent changes and explain how the Cyclescheme works.


So, from an employee perspective, how does the Cyclescheme work?

First, you need to decide on your package. Whether it is just a bike, a bike and accessories, or just accessories, Cyclescheme lets you use an online calculator to see how much you could save on your chosen bike (this is the most important part). Once you have your budget you can select your retailer. You’ll be able to find retailers offering Cycelscheme online or even by just approaching your local retailers. Now it’s time to get the ball rolling. Once you’ve chosen your bike and retailer its time to get started. First of all, your employer will be required to review your application and pay for your scheme (don’t forget your employer pays for your bike etc upfront). After your employer has reviewed the application and submitted it to Cyclescheme you will be able to log in and print your certificate/voucher for your bike. Now comes the best part, you can exchange your voucher for your bike!


When your Cyclescheme ends and all deductions have been taken you can keep your bike by making a small additional payment. This will be dealt with at the end of your contract by your Cyclescheme provider.

We’ve gone through how an employee registers for the Cyclescheme, is it just as easy for the employer? The answer is YES!

It’s as easy as 1,2, 3…

  1. As an employer you would register the company with Cyclescheme. This is a simple process that only has to be completed once
  2. The employee chooses their bike and applies online. This then prompts you as the employer to review the application and pay for the bike. After this the voucher we mentioned previously is sent to the employee
  3. The employee uses the voucher to pick up the bike and as an employer you can now deduct the payments from the employees’ wages. Cyclescheme issue a schedule so you know the amount to deduct from the employees wages each month. After a year you will have recovered the cost of the bike along with the generated savings on National Insurance.


What are the recent changes?

Previous guidance from the Department for Transport stated that employers could loan packages worth up to £1000. Employers who had their own FCA authorisation were able to offer packages over £1000. However, a recent government update has stated all employers can now offer schemes worth £1000 plus.

This means that the £1000 limit no longer stands but still ensures employers remain compliant with HMRC. The change also benefits the employee as they can now be offered a wider range/style of bikes.


For more information on Cycleschemes or salary sacrifice deductions please contact our dedicated payroll bureau team on 01472 604628 or email – payroll@blowabbott.com