The Cycle to Work Scheme is a salary sacrifice scheme that’s part of the UK Government plan to improve the environment, cut road congestion and improve the health of the nation. However, employees and employers who signed up for the scheme could not have predicted the dramatic changes in working patterns since the pandemic struck and coronavirus restrictions that were imposed.
If you are an employer or an employee taking part in the Cycle to Work scheme read on for some key points to be aware of.
The Government announced a ‘time-limited easement’ for employees who joined an employer-provided scheme on or before 20 December.
Employees joining a scheme from 21 December 2020, who is currently cycling to work and meet the qualifying journeys condition, are eligible for the tax exemption on the provision of a cycle.
What if you are working from home?
For new scheme entrants who are working from home an option to join the scheme is available. However, they may be liable to a tax charge if they are not traveling to or from work or in the course of their work. It is worth taking up the option when there is more certainty around working arrangements.
Can Schemes remain open?
Yes, the Government continues to back the scheme. Employees that meet the ‘qualifying journeys condition’ are encouraged to take part in the scheme.
Can an employer close their Scheme?
Yes, but you should seek expert advice as the cycles provided will become a taxable benefit in kind.