Cyclescheme: How it works for you

Deal editor98
Posted 2nd Jun
In a nutshell: Save money and spread the cost on a new bike and accessories by paying for it via your employer's scheme. Seems simple enough, but is it?

I have tried to simplify it below... but by all means, have a read of the official website.


What does it say?

"Save 25-39% on a new bike for work

Tax is complicated; the cycle to work scheme is not. You choose a bike, hire it for an agreed length of time, then snap it up for a faction of its original value. It's like a year-round sale, with interest free credit available in over 2,000 retailers nationwide."



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What does this actually mean?

If your employer is part of the Cyclescheme cycle to work scheme, then you can hire your bike paying monthly instalments. There was a limit of up to £1000 for each agreement, but now you can get more expensive bikes and accessories, depending on your employer’s scheme. For example, e-bikes for those who might need to get up some hills without getting sweaty are now included.

You just need to sign up using your employers details, find a shop that is part of the scheme, and wait for your employer to sign off on the agreement.


On the Cyclescheme site:

“Your employer will review your application and pay for your Cyclescheme package. We'll then instantaneously send you an eCertificate.

You can exchange your eCertificate for your gear in-store or online.”



When you have hired the equipment, you will pay the same amount each month which will come out of your paycheque as a salary sacrifice. However, you’ll pay less NI and tax until the 12 months are up to make use of the tax-free element of the scheme. After this, you have three options...

1. Give the bike back
You can give the bike back after 12 months, but this offers you no real advantage as you will have been paying to simply rent the bike and accessories. Plus, you will need to return the bike at your own expense.

2. Pay to 'own it now'
You can choose to keep the bike by paying the ‘own it now fee’, which is either 18% or 25% of the bike’s market value. 18% if the bike was initially less than £500, or 25% if it was more than £500. For example, if your chosen package was £600 in total and you are on a wage of £30,000, then you would pay £50 per month for 12 months, which is £600 during the hire period. However because this is before tax, it comes out of your wage directly and feels more like £34 a month (so £408 in total) out of your pocket.

After the 12 months you would need to pay £150 (which is 25% of £600) to own the bike. This works out as you paying £558 of the total £600.

3. Pay to 'own it later'
The cheapest option would be to use the ‘own it later’ agreement, which has the same initial hire costs and time of 12 months. Thereafter, you pay Cyclescheme a refundable deposit of 3% or 7%* of the market value of the bike, to use the bike for another three years with no further monthly instalments taken from your paycheque. *Again the percentage is dependent on if your package was under or over £500.

Then when the three additional years are up, you can either give the bike back and get your deposit back, or keep the bike and Cyclescheme keep the deposit.

Using the earlier example of a £600 agreement, you will have paid £600 toward the bike during the initial 12 months, which again will feel more like £34 a month so £408 in total, then you pay 7% deposit to own the bike after a further three years. 7% of £600 is £42, so in total you will have paid what feels like £450 for the bike.

Cyclescheme then transfers ownership of the bike to you, unless you choose to give it back.


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CLEAR AS MUD



Note: It will depend on your employers scheme for the exact amount you need to pay as they may have administration fees, you may be in a higher tax bracket than the example above, and if you live in Scotland or Wales you will pay different amounts of tax.




Watch this video to realise it isn’t as opaque as it sounds…



Cyclescheme End of Hire Process from Cyclescheme Ltd on Vimeo.





Find out where you can get bikes and equipment on the website, but all of the below are involved:


As ever, read the FAQs thoroughly as it will explain everything you may want to know. Here is a link to the employee questions and answers: help.cyclescheme.co.uk/col…ers

It must be noted that should you leave employment with the company or organisation you set up the scheme with before the initial 12 months hire, then you will not benefit from the tax free aspect of the scheme and the remainder of the fees will be taken from your final NET pay, ie. after tax.

This is considered a termination fee and is non-negotiable. Nor can you transfer the scheme between employers, sadly.

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Top comments
People should also be aware that salary sacrifice reduces entitlements and benefit payments, such as maternity pay. Furthermore if you leave, you have to pay back the remainder of the cost out your final pay, without any tax relief.
For a stable employee not likely to go on long term leave it’s a great scheme but enter the scheme with your eyes open.
Oneday7703/06/2020 09:41

Rather than just advising people to read the FAQs. Can you please act …Rather than just advising people to read the FAQs. Can you please act responsibly and advise that people are liable for payment form their NET pay not gross should they leave? With today’s job uncertainty it’s the responsible thing to do. Especially as the right up you’ve given seems to list all the positives of these types of schemes.


The write up is meant to be positive. I have added info about leaving companies before the hire period is up, but it is up to readers to learn more about the scheme themselves before signing up, hence the inclusion of the FAQs. Especially since they will have to get consent from their employer anyway. Thanks.
Edited by: "Akira_Cat" 3rd Jun
charliemike03/06/2020 15:06

Discrimination. I’m unemployed and I can’t access this scheme. We should be …Discrimination. I’m unemployed and I can’t access this scheme. We should be more about equality and not discriminate against the unemployed.


I’m sorry but what utter trash, it’s a cycle to WORK scheme, you can’t have an employer lay out for your bike if you don’t have a job.
Rather than just advising people to read the FAQs. Can you please act responsibly and advise that people are liable for payment form their NET pay not gross should they leave?
With today’s job uncertainty it’s the responsible thing to do. Especially as the right up you’ve given seems to list all the positives of these types of schemes.
98 Comments
Decent info! Was only checking this out this morning as my company offer it and I didn’t know. Nice one
People should also be aware that salary sacrifice reduces entitlements and benefit payments, such as maternity pay. Furthermore if you leave, you have to pay back the remainder of the cost out your final pay, without any tax relief.
For a stable employee not likely to go on long term leave it’s a great scheme but enter the scheme with your eyes open.
Rather than just advising people to read the FAQs. Can you please act responsibly and advise that people are liable for payment form their NET pay not gross should they leave?
With today’s job uncertainty it’s the responsible thing to do. Especially as the right up you’ve given seems to list all the positives of these types of schemes.
Oneday7702/06/2020 18:18

People should also be aware that salary sacrifice reduces entitlements and …People should also be aware that salary sacrifice reduces entitlements and benefit payments, such as maternity pay. Furthermore if you leave, you have to pay back the remainder of the cost out your final pay, without any tax relief. For a stable employee not likely to go on long term leave it’s a great scheme but enter the scheme with your eyes open.


Plus, if you don't pay any tax on your earnings, the benefits of the scheme are pretty much zero.
sixgoldstars03/06/2020 09:45

Plus, if you don't pay any tax on your earnings, the benefits of the …Plus, if you don't pay any tax on your earnings, the benefits of the scheme are pretty much zero.


If you’re not paying tax on earnings, then there is a strong likelihood you wouldn’t be eligible. Due to it taking you below National Minimum Wage. Obviously we’ll paid part timers could still technically qualify.
Oneday7703/06/2020 09:41

Rather than just advising people to read the FAQs. Can you please act …Rather than just advising people to read the FAQs. Can you please act responsibly and advise that people are liable for payment form their NET pay not gross should they leave? With today’s job uncertainty it’s the responsible thing to do. Especially as the right up you’ve given seems to list all the positives of these types of schemes.


The write up is meant to be positive. I have added info about leaving companies before the hire period is up, but it is up to readers to learn more about the scheme themselves before signing up, hence the inclusion of the FAQs. Especially since they will have to get consent from their employer anyway. Thanks.
Edited by: "Akira_Cat" 3rd Jun
Akira_Cat03/06/2020 09:50

The write up is meant to be positive. I have added info about leaving …The write up is meant to be positive. I have added info about leaving companies before the hire period is up, but it is up to readers to learn more about the scheme themselves before signing up, hence the inclusion of the FAQs. Especially since they will have to get consent from their employer anyway. Thanks.


Which I full understand. However unlike say a lease that people know if they leave a job they can pay elsewhere.

When you leave a place of employment. A £1,000 bike that you have maybe made the first payment on of roughly £83. That after tax an NI only cost their pocket £56. The last 11 payments for a leaver would be 11x83 after tax not 11x£56, out their last wage.

A normal retail purchase is easy to follow, one with Tax implications is very different to follow.

Edit: our comments crossed, thanks for adding in the extra detail.
Edited by: "Oneday77" 3rd Jun
Oneday7703/06/2020 10:02

Which I full understand. However unlike say a lease that people know if …Which I full understand. However unlike say a lease that people know if they leave a job they can pay elsewhere. When you leave a place of employment. A £1,000 bike that you have maybe made the first payment on of roughly £83. That after tax an NI only cost their pocket £56. The last 11 payments for a leaver would be 11x83 after tax not 11x£56, out their last wage. A normal retail purchase is easy to follow, one with Tax implications is very different to follow.Edit: our comments crossed, thanks for adding in the extra detail.


I admit it is a confusing process, but I think the overall benefits outweigh any negative aspects. Cheers!
Edited by: "Akira_Cat" 3rd Jun
I did this years ago. Applied for £300, got a letter I then had to give to Halfords who could process the sale. There were few merchants but I chose Halfords. I also included accessories in my sale.

The process is really clear as mud. At the end of scheme don’t think I heard anything and I still have the bike.

Things worth noting, there were only a few merchants and you had to choose your value up front. So bikes might be cheaper elsewhere or online. I plucked £300 put the sky and bought a £250 bike and luckily was allowed to buy accessories. Would have been great only spending £250 as it would have cost me £300!

A friend bought an £800 bike through this scheme.

Apart from it being as clear as mud it did work. £15 a month or so and saved the tax.

make sure you choose your bike first and hopefully it’s in stock by the time everything is processed
201503/06/2020 10:22

I did this years ago. Applied for £300, got a letter I then had to give to …I did this years ago. Applied for £300, got a letter I then had to give to Halfords who could process the sale. There were few merchants but I chose Halfords. I also included accessories in my sale. The process is really clear as mud. At the end of scheme don’t think I heard anything and I still have the bike.Things worth noting, there were only a few merchants and you had to choose your value up front. So bikes might be cheaper elsewhere or online. I plucked £300 put the sky and bought a £250 bike and luckily was allowed to buy accessories. Would have been great only spending £250 as it would have cost me £300!A friend bought an £800 bike through this scheme.Apart from it being as clear as mud it did work. £15 a month or so and saved the tax.make sure you choose your bike first and hopefully it’s in stock by the time everything is processed


I think different schemes have different rules, but this one has lots of stockists, so you should be able to get the bike you actually want.
Reading through it, there seems to be a lot more merchants now. I did this about 7/8 years ago.
201503/06/2020 10:26

Reading through it, there seems to be a lot more merchants now. I did this …Reading through it, there seems to be a lot more merchants now. I did this about 7/8 years ago.


It has expanded a lot. Even if a scheme provider lists selected stockist. Some will allow you to use a local independent too. Always worth asking
crappy scheme unless your on the higher tax bracket
alternatively just get a 10% off halfords aa card or british cycling and use topcashback. Even gift cards can be bought with a discount.
Also worth noting you often can't get the same deals using the various schemes as you would get if paying normally.

At Giant for example (friend works there) some of the schemes charge the store up to 17% of the cost of the voucher to use the voucher.
So if you've got an end of season 20% off deal then you probably can't use a voucher for it because if they discount the bike by 20% and then the shop has to pay the scheme another 17% then the store ends up losing money.

It's a great scheme if you're buying something at RRP, but can be less useful if you're planning on shopping around at sale time.
Edited by: "dhope" 3rd Jun
dhope03/06/2020 14:40

Also worth noting you often can't get the same deals using the various …Also worth noting you often can't get the same deals using the various schemes as you would get if paying normally.At Giant for example (friend works there) some of the schemes charge the store up to 17% of the cost of the voucher to use the voucher.So if you've got an end of season 20% off deal then you probably can't use a voucher for it because if they discount the bike by 20% and then the shop has to pay the scheme another 17% then the store ends up losing money.It's a great scheme if you're buying something at RRP, but can be less useful if you're planning on shopping around at sale time.


I would've thought you can only get bikes at RRP as that makes the market value easier to calculate? Good point though.
It should also be noted that the passing of the ownership to the employee cannot be guaranteed otherwise it is not eligible for the tax benefits however this is invariably what happens at the end of the scheme.
Every company I ask says "no"
The first para of the post needs correcting - says: "Seems simple enough, but it is?" but should be "Seems simple enough, but is it?"
Our company refuse to support this, very frustrating.
I'd really recommend choosing a bike first!

I've done this multiple times over the years and it's a convenient interest free loan with a respectable saving.

The biggest savings are in autumn when current models get reduced to make way for next years'.
Most retailers will keep a bike aside for you though I have found some small independents don't like dealing in discounted bikes as Cyclescheme takes a hefty cut!
theRainMan03/06/2020 14:46

The first para of the post needs correcting - says: "Seems simple enough, …The first para of the post needs correcting - says: "Seems simple enough, but it is?" but should be "Seems simple enough, but is it?"


Living up to your name! Thanks
Brydo66603/06/2020 14:50

Our company refuse to support this, very frustrating.



You can get similar savings shopping around and getting a 0% purchase card.
201503/06/2020 10:22

I did this years ago. Applied for £300, got a letter I then had to give to …I did this years ago. Applied for £300, got a letter I then had to give to Halfords who could process the sale. There were few merchants but I chose Halfords. I also included accessories in my sale. The process is really clear as mud. At the end of scheme don’t think I heard anything and I still have the bike.Things worth noting, there were only a few merchants and you had to choose your value up front. So bikes might be cheaper elsewhere or online. I plucked £300 put the sky and bought a £250 bike and luckily was allowed to buy accessories. Would have been great only spending £250 as it would have cost me £300!A friend bought an £800 bike through this scheme.Apart from it being as clear as mud it did work. £15 a month or so and saved the tax.make sure you choose your bike first and hopefully it’s in stock by the time everything is processed


Great advice! I did the same too. Picked a budget and went to my local Rutland cycling and they advised me on which bikes they had in stock to meet my needs and budget. Like you said people do need to find out what they can spend which their employer should specify
Akira_Cat03/06/2020 14:42

I would've thought you can only get bikes at RRP as that makes the market …I would've thought you can only get bikes at RRP as that makes the market value easier to calculate? Good point though.


The value is just based on the price of the voucher.

If you get a £1100 bike for £1000 then it's worth £1000 as far as cycle schemes are concerned as that's what's on the receipt
At work I have a £1000 limit still. I am wanting an E-bike for a commute. They run it through cycle solutions seems simple enough to apply however no use for me at present given the price of the E-bikes are much higher than £1,000! Reading up Cyclescheme are able to offer the ebikes but its all dependent on the employers limit. Some are removing the limit some are sticking with it despite the Government making it more flexible.
Brydo66603/06/2020 14:50

Our company refuse to support this, very frustrating.


I don't understand why companies would refuse. They save money by doing it as they're lowering your salary and so they end up paying less in national insurance contributions.
Monkeyboy117103/06/2020 14:55

At work I have a £1000 limit still. I am wanting an E-bike for a commute. …At work I have a £1000 limit still. I am wanting an E-bike for a commute. They run it through cycle solutions seems simple enough to apply however no use for me at present given the price of the E-bikes are much higher than £1,000! Reading up Cyclescheme are able to offer the ebikes but its all dependent on the employers limit. Some are removing the limit some are sticking with it despite the Government making it more flexible.


I suppose it depends on the scheme your work is on too. Fingers crossed other schemes will follow suit and up the limit.
Just an extra note, I did this and went via Quidco when making the final purchase.. was surprised that it actually tracked and confirmed.. haven't had a payout yet but looking good. Cycle Republic are also members of the scheme too -useful for me as I wanted Halfords Voodoo Bizango but couldn't use cyclescheme with Halfords (they use "cycle2work" depends whuch scheme your employer is part of)
Really wish the services would do this had it in the NHS wish I could in the army
dhope03/06/2020 14:54

The value is just based on the price of the voucher.If you get a £1100 …The value is just based on the price of the voucher.If you get a £1100 bike for £1000 then it's worth £1000 as far as cycle schemes are concerned as that's what's on the receipt


Good to know!
I've bought two bikes through this scheme over the last 7 years. Worth noting that some retailers won't sell you a bike that's reduced in a sale through this scheme so check, and secure your bike first then apply for the voucher amount.

All in all it's a simple process with emails to guide you after the first year ends. Would recommend it if your employer is a member of the scheme, a decent saving can be made.
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deleted117581
Another heads up; I've looked into this scheme before and always thought the value of the new bikes to be a little excessive for the needs of most cyclists. Eg. I went into my local Giant store, and I think the bikes they were trying to sell me started at £600 for a basic bike, rising to £999 for something I would consider riding. I'm certain that this scheme has just resulted in inflating the prices of bikes to near the 1k limit.

If you are considering this, and budget is tight, don't forget the 2nd hand market, there are plenty of 2nd bike stores (well there are where I live) or smaller independent bike shops that will sell you a basic bike for much less. Sure you wont get the bike on the cycle scheme, but you will get a decent bike for your money.

If you are considering riding to work, I cannot recommend enough getting a bike that has pannier rack for luggage, sure you could pop stuff in the backpack but the rack is SO much easier. Full mud guards and decent tyres are a good idea too..

Good info though and it's certainly one way to buy a bike.. .
dhope03/06/2020 14:55

I don't understand why companies would refuse. They save money by doing it …I don't understand why companies would refuse. They save money by doing it as they're lowering your salary and so they end up paying less in national insurance contributions.


They always say it's too much work to setup.
I’ve had 2 bikes through this scheme, 1st bike around 7 years ago I didn’t have to make any additional payments at the end of term, my more recent bike I’ve ‘loaned’ for an additional 3 years, also Evans cycles honours sales prices
Surely only a good scheme if your employer takes part in it, which mine doesn't.
Discrimination. I’m unemployed and I can’t access this scheme. We should be more about equality and not discriminate against the unemployed.
djp2k803/06/2020 15:04

Surely only a good scheme if your employer takes part in it, which mine …Surely only a good scheme if your employer takes part in it, which mine doesn't.


Well, indeed. Maybe harangue them enough and they'll get involved?
charliemike03/06/2020 15:06

Discrimination. I’m unemployed and I can’t access this scheme. We should be …Discrimination. I’m unemployed and I can’t access this scheme. We should be more about equality and not discriminate against the unemployed.


It's a cycle to WORK scheme, if you were allowed a bike through it where would you go on it?

You wouldn't be able to use it.
I got my certificate through 4 weeks ago and have pre ordered my bike and accessories from Sigma. Should be delivered in 2 weeks.... It seems like a great scheme. I’m getting an £800 bike and accessories for £38 a month.
charliemike03/06/2020 15:06

Discrimination. I’m unemployed and I can’t access this scheme. We should be …Discrimination. I’m unemployed and I can’t access this scheme. We should be more about equality and not discriminate against the unemployed.


I’m sorry but what utter trash, it’s a cycle to WORK scheme, you can’t have an employer lay out for your bike if you don’t have a job.
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