Taken from the website
"Cycle to Work is a tax incentive aimed at encouraging employees to, er, cycle to work, thereby reducing air pollution and improving their health.
The scheme allows employees to benefit from a long term loan of bikes and commuting equipment such as lights, locks and panniers completely tax free.
Employers benefit from fitter, more punctual, more wide-awake staff. Employees benefit from better health and better bikes because their money goes further. With a budget of, say £400, an employee in the high tax-band can now afford a bike, plus accessories, worth nearly £800."
Some more info on this site http://www.bikeforall.net/content/cycle_to_work_scheme.php
I did do a search for this but to my surprise couldn't find previous posts about it.