HR Services. Employee Handbook General Policies. UEL Cycle to Work Scheme. Background. Procedure to Purchase a Bike
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1 HR Services Employee Handbook General Policies UEL Cycle to Work Scheme As part of our increasing awareness of environmentally sustainable working practices and enhancing our reputation as a progressive employer offering a wide range of flexible staff benefits, UEL is pleased to announce the launch of Cycle to Work Scheme. Background To promote healthier journeys to work and reduce environmental pollution, the 1999 Finance Act introduced an annual tax exemption, which allows employers to loan cycles and cyclists' safety equipment to employees as a tax free benefit. The Cycle to Work Scheme is essentially a 'salary sacrifice scheme' where staff enter into a hire agreement with UEL over an 18 month period without having to pay Tax or National Insurance on payments. Therefore, by combining tax and national insurance savings, the cost of hiring a bicycle and cycle equipment may be reduced by up to 33% for basic rate tax payers and up to 41% for higher rate tax payers. At the end of the 18 month hire period, Cyclescheme will contact and present the staff member with three options in line with HMRC legislation to own or return the bicycle package. The option recommeded by Cyclescheme for ownership is to pay a small refundable deposit, 3% of the original value for bicycles valued at or below and 7% for bicycles valued at or below In order to benefit from the Tax and National Insurance savings the main use of the bicycle and equipment must be for travel to work or between campus sites. Staff who intend to use a bicycle to travel to a local rail or tube station are also covered. Procedure to Purchase a Bike 1. Go to the following link find your
2 local retailer. Enter your home post code and it should give you a list of the nearest approved retailers. 2. Visit an approved retailer, explain you are shopping as part of the 'Cycle to Work' initiative and they will give you an itemised written quote. If you don't already have one, make sure your package includes a cycling helmet - lights and clothing as these are also covered as part of the package. 3. Use the following link and as instructed complete the bicycle request form. 4. Your eligibility will be checked by HR Services. To be eligible you will need to have passed your probation and have a contract of employment covering the repayment period of 18 months. If eligible your application will be approved, you will be contacted to get you to sign the cycle agreement and a voucher will be sent to you, so you can pick up your bicycle package - this should take no more than 2/3 weeks. 5. You will attract tax and NI relief on the gross cost of your bicycle package, the net amount will be repaid over a fixed 18 month period. To own the bicycle, under a seperate agreement with Cyclescheme you will need to make a final payment to them, which will be 3% of the original value for bicycles valued at or below and 7% for bicycles valued at or below 1000 of the gross amount. This process involves taking out a 4 year Hirer Extension enabling staff to be charged the reduced market value of 3% or 7%. Alternatively, if you wish to take ownership of the bicycle 'immediately' you can do so by paying Cyclescheme a much higher percentage valuation. Cyclescheme will contact you at the end of the 18 month period to discuss all the options available. 6. Staff can reapply for the scheme after the initial hirer period. How UEL's Cycle to Work Scheme Will Work Staff will have the option of participating in the scheme via deductions from their salary over an 18 month period; the maximum amount of the total package will be Refer to the following example: Potential tax and NI savings on a package valued at 1000 over the stipulated 18 months lease period. Basic Rate ( ) Higher Rate ( ) Total Value of Package Period (months) Monthly salary nomination
3 Tax and NI savings Reduction to Net Salary Total cost through scheme Savings through the scheme The scheme will be administered by Cyclesheme an independent company, with a proven track record of successfully working with the HE sector. Cyclescheme represents independent high street retailers. Cycle to work schemes by Evans and Halfords do not apply. Cyclescheme and UEL 's Senior HR Manager (Strategy & Change) will promote the scheme and advise interested staff, putting them in touch with a Cyclescheme approved bicycle shop i.e. the vast majority of independent bicycle retailers. The member of staff visits a Cyclesheme approved retailer and selects a bicycle package and obtains an approved quote. The quote is then authorised by UEL's Senior HR Manager (Strategy & Change) and Cyclescheme issues the member of staff with a voucher which authorises the collection of the bicycle package. The application process typically take 2/3 weeks. UEL then deducts 18 X one monthly amounts from the member of staffs' wages, and then may Cyclescheme will offer an end of lease payment of 3% or 7% of the original value - if this option is taken up the bicycle package then belongs to the member of UEL staff. Frequently Asked Questions Q. Why choose Cyclesheme as our 'Cycle to Work Broker' A. They were a direct referral from Bath University the first University to offer a 'Cycle to Work scheme', they have also worked with Nottingham University and Dartington College of Arts and represent the majority of high street independent bicycle retailers.
4 Therefore by contracting with Cyclescheme consumer freedom is built into our scheme and UEL is more likely to support local businesses. Q. Is their a minimum level you need to spend? A. Yes 300, as we wish to encourage staff to purchase a good quality bicycle, with basic safety equipment, such as a helmet, lights and reflectors as a minimum. Q. What happens if the bicycle is stolen before it is paid for? A. It is the responsibility of the member of staff to honour any outstanding repayments and all applicants to the scheme will be strongly urged to insure the bicycle and purchase effective locks. UEL offers lockable bycle shelters at all campus locations. Staff are charged 24 per annum for the use of these facilities and enquires should be directed to Sara Kassam s.kassam@uel.ac.uk Q. Can staff spend more than 1000 on a bicycle package? A. Yes but any amount over the 1000 will have to be paid upfront and will not attract tax and NI breaks. Q. Who is eligible to apply? A. All staff who have passed probation and have a contract of employment of 18 months plus. Q. How do staff prove that they are using their bicycles mainly for commuting? A. We would not require staff to keep mileage logs or to clock their bicycles in, we would rely on trust and good faith. Q. Can a member of staff upgrade their package during the 18 month repayment period? A. Not before they have honoured all their repayments? Q. What equipment can be purchased? A. Typically, helmets, reflectors, lights, bicycle pumps, locks, clothing, puncture repair kits, luggage carriers and car racks if part of the commuting journey is
5 undertaken by car.. Q. What are the health benefits to staff? A. Cycling reduces the risk of serious conditions such as heart disease, high blood pressure, obesity and the most common form of diabetes. ( One rough calculation suggests that new cyclists covering short distances can reduce their risk of death (mainly due to the reduction of heart disease) by as much as 22 per cent (bupa.co.uk). Regular cycling, such as to and from work, can be an easy way to achieve the recommended 'half an hour a day' of physical activity for health.
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