CYCLE TO WORK SCHEME The government, in ... - Pilgrims Hospices

CYCLE TO WORK SCHEME
The government, in order to encourage more commuting to work by bike, have
created a tax break that gives huge savings on the purchase of a bike. Employees
enter into a ‘hire agreement’ with Pilgrims Hospices and the cost of this is deducted
directly from your salary. It is spread over 11 months with one final payment being
made in the 12 th month to secure ownership.
There is an expectation that the bike is used for at least 50% of your travel time to
work.
HOW THE SCHEME WORKS
• You visit one of over 1,000 participating bike shops to select the bike and
equipment that you want.
• You will be given a quote from the shop and you can then ask them for an
invoice for the goods to be sent directly to us.
• As soon as the bike is paid for by Pilgrims Hospice, you can collect your bike.
• Your hire payments are deducted from your gross monthly salary over an 11
month period. At the end of the hire period one further payment will be
deducted (of a value to be determined at the time) at which point, you will own
the bike outright.
• You are able to continue using the bike on a loan basis from Pilgrims for up to
4 years as the longer you do this, the less the final amount payable will be.
As an example, for a bike costing £300, if you decide to take ownership at the
end of 12 months, £54 will be due. If you wait for an additional 3 years, only £9
will be due. This is on a sliding scale depending on the length of time you have
been using the bike. Until the final payment is made, the bike remains the
property of Pilgrims.
WHO IS ELGIBLE FOR THE SCEME
All permanent Hospice employees are eligible.
Flexi bank staff are not eligible as there is no guaranteed income from which to make
regular deductions.
Fixed term contract staff must have a contract that lasts for over 12 months to enable
all the deductions to be made.
All those applying for the scheme must have at least 26 weeks service with Pilgrims
Hospice.

WHO OWNS THE BIKE
The bike and goods remain the property of the Hospice until the hire period finishes.
At the end of the hire period, a final 12 th payment will be deducted and at this point,
the bike ownership transfers to the employee. If the hire period extends beyond 12
months as described above, a refundable deposit of 3% or 7% is required at this
time.
The scheme will be run on a ‘first come first served’ basis. The hospice will allocate
£5,000 annually to the scheme. Once these funds have been exhausted, other
interested staff will need to wait until a hire period has completed for further funds to
be released. HR will hold a ‘waiting list’ if staff are not able to join the scheme at their
preferred time.
WHAT HAPPENS IF THE BIKE IS STOLEN
If the bike gets stolen you will be liable for any outstanding monies without any tax
exemptions, so it's very important to make sure the bike is insured. You can obtain
safety equipment, including Home Office-approved 'Sold Secure' D-locks and cable
locks, as part of the scheme.
WHAT HAPPENS AT THE END OF THE HIRE PERIOD
A final 12 th deduction is made to enable you to pay the ‘fair market value’; this is the
amount that a buyer would pay to a seller to purchase the bike and equipment. The
table below explains how much might be due.
Age of cycle Acceptable disposal value percentage
Original price Original price
Less than £500 £500+
12 months 18% 25%
18 months 16% 21%
2 years 13% 17%
3 years 8% 12%
4 years 3% 7%
AM I RESPONSIBLE FOR MAINTAINING THE BIKE
Yes
WHAT HAPPENS IF I LEAVE MY JOB FOR ANY REASON
You will be required to pay the remaining amount in full, without any tax exemptions.
If you opt to take ownership of the bike you may have to pay an increased fair market
value.

Lead and Author Head of Human Resources
Date March 2011
Policy Version No
Policy application Hospice wide
Approving body
Review May 2012