Employer FAQs

Who is eligible for the cycle to work scheme?
Employers of all sizes across the public, private and voluntary sectors can implement a tax-exempt loan scheme for their employees. To maximize the benefit of implementation, it is desirable that participation in a scheme should be as broad as possible. To qualify for the tax exemption, the cycles and cyclists’ safety equipment loaned by the employer under the scheme must be available to employees generally with no groups of employees excluded. 

How much does it cost to set up a cycle to work scheme?
Co-operative Flexible Benefits do not charge a fee or any administration costs to set up and operate the cycle to work scheme. Please note, there may be a requirement for internal administration resource eg: payroll involvement, which should be factored into your own internal implementation. 

Do I have to be a Director to run the scheme?
No. Anyone in an organisation can promote and manage the process. An authorised representative must sign Halfords' Supplier Agreement, and sign the leasing document should there be one in place.

During the scheme, an authorised representative must sign the employee Hire Agreement so that it can be executed. (Please ensure that you engage HR and Finance in the initial set up and discussion.)

How long should my scheme be open to my employees?
To ensure the smooth running of a scheme and encourage take up we would recommend an election window of no more than a month. This targeted approach will influence the success of the scheme. 

Who owns the equipment?
The legislation that governs a cycle to work scheme states that the Employer must own the equipment. There can be no automatic right for the Employee to own the equipment at the end of the Agreement. If they do, they cannot claim the tax exemption. Therefore a cycle to work scheme operates as a loan: the Employer is technically loaning the equipment to the Employee for a fixed-period of time. Although Employees do not actually own the equipment, they remain custodian of the equipment and are free to use it as they wish, providing it is mainly for cycling to work. 

What happens at the end of the loan period?
There is no automatic entitlement for employees to take ownership of the cycles and safety accessories at the end of the loan period. However, employers may choose to give employees the option to purchase the equipment.

What is the maximum value of equipment an employee can obtain through cycle to work?
The Office of Fair Trading has issued a Group Consumer Credit License allowing any employer to run a cycle to work scheme. The license allows employees to hire equipment up to the value of £1,000 inclusive of VAT. An employer can then choose to offer whatever range of values within the £1000 limit that they deem appropriate. 

Can a Letter of Collection be used to get a bike for a family member, partner or friend?
No. The cycle must be used by employees, mainly for commuting to work. For example: journeys made between the home and workplace, or part journeys (e.g. to the station), or for journeys between one workplace and another. 

How soon can an employer run a second scheme?
Employers can run a second scheme at any time after the first one has completed. Our recommendation would be to speak with your local Account Manager to arrange an annual plan.

What is a Group Consumer Credit License?
The Office of Fair Trading has issued a Group Consumer Credit License allowing any employer to run a cycle to work scheme. The license allows employees to hire equipment up to the value of £1,000 inclusive of VAT.

When can employees collect their bike?
If it is in stock at your chosen Halfords store simply surrender your LoC and present a form of ID. If it is not in stock, you should request that your chosen bike is ordered in to that Halfords store. Your bike will then be built and inspected by a qualified bike mechanic, ready for you to ride away.

What happens at the end of the scheme?
After the agreement period is over, an organisation may offer to sell the equipment to employees for its fair market value at that time (inc VAT). ie: the amount that a buyer would pay to a seller to purchase the bike taking account its second hand value and current condition.

What if a bike gets stolen/accidentally damaged?
It is recommended employees obtain separate insurance, or check the bike is covered under home contents insurance policy. If home contents insurer covers the bike, employees must inform them that the Employer (or their nominated agent) owns the bike. Payments will not stop or be suspended due to loss or damage to the bike.

What if an Employee leaves early or is made redundant?
If you leave before the end of the hire period, you must pay your employer the balance of the amount still to pay and this will deducted from your final net pay. You may then have continued use of the equipment without further payment until the hire period expires, when you may be offered the opportunity to purchase the equipment for its then fair market value. However this transfer of ownership is the subject of a separate agreement and is not governed or influenced by the Hire Agreement you sign for this scheme.

For more information contact our helpdesk on 0800 458 7929