The employee agrees to give up part of their pre-tax salary to the value of the bike and accessories chosen, because the amount is taken pre-tax it decreases the value of the salary and results in the employee paying less tax and national insurance contributions. For standard tax rate payers (Annual salary up to £50,000) you save 32% and high tax payers (salary above £50,001) save 42%. The employee has convenient ownership options after the 12-month rental period is up.
For example, a £3000 electric bike would only cost £170 for 12 months saving £960 for standard tax payers and £145 per month over 12 months saving £1260 for high tax payers..
Electric Bike Access is a salary sacrifice scheme that means an employee agrees to give up an amount of their pre-tax salary in exchange for an electric bike. The value of the bike is shown on the left-hand side of your payslip (pre-tax section) the savings are calculated by reducing the amount of National Insurance and tax the employee would pay by the value of the agreement. For example, a bike at £2000 for the standard rate tax payer would save 32%, this equates to £640 in savings.
The reduced amount is split into 12 payments back to the employer. The value paid by the employee would be £1360 so a monthly payment of 113.33. The remainder is government funded.
During the rental agreement Electric Bike Access owns the bike. After the 12-month agreement the employee has options to return at no cost, upgrade to the latest model and return the old bike or choose to extend the agreement to own the bike. If they choose to upgrade, we collect the old bike free of charge and a new rental agreement starts when the new bike is delivered. Ownership is a simple process, a new agreement is signed to extend the agreement, after 5 years the bike is owned outright by the employee, the extend to own agreement is totally free and offers the employee the most savings.
They are for everyone, electric bikes are for anyone who wants to enjoy cycling that might be put off by particularly hilly terrain, a long commute or carrying a heavier load. Electric bikes make cycling accessible to everyone and remove the barriers that usually prevent people from getting on their bike. Under current regulations electric bikes can provide assistance up to 15.5mph. Although by putting in more energy yourself, it is easily possible to reach higher speeds.
The range of our electric bike vary from 30 miles to 60 miles*, but it all depends on the system, the terrain and how the bike is used. Many other factors influence the range of electric bikes.
The employee agrees to give up part of their pre-tax salary to the value of the bike and accessories chosen, because the amount is taken pre tax it decreases the value of the salary and results in the employee paying less tax and national insurance contributions. In the same way the business now has a reduced national insurance contribution value and saves 13.8% on the value of each rental agreement.
The employee has convenient ownership options after the 12-month rental period is up. After the 12 months the employer has recouped the amount paid for the bike in full.
Electric Bike Access own the bike until the rental agreement has ended and the employee has paid £1 and signed the transfer of ownership agreement. After the 12-month rental agreement is up and the employer has recouped the cost of the bike in full the employee can choose to return the bike at no cost, extend to own for just £1 or upgrade with a new agreement.
Although Electric Bike Access own the bike in the same way a lease works the employee is liable for the bike and we always recommend taking out insurance and keeping the bike secure.
Following a cooling off period of 14 days, the contract cannot be cancelled or amended. The employee is legally obliged to pay back the salary sacrifice amount in full and in some cases without any tax exemptions if they leave the business or are made redundant. All agreements are at the employer’s discretion, its up to the business to set limits and approve all agreements for employees.
For more information from HMRC you can download the guidance on Cycle to work benefits here. If you have further questions visit our contact us page.
We offer a hassle-free process, a direct relationship with the manufacturer and support from a dedicated team here in the UK. You will have complete control through your own portal which offers the ability to set limits, approve and track all agreements. The sign-up process is fast and free and once orders are placed and approved, we offer free next day delivery to an address of the employees’ choice.
Simply adjust the employee’s payroll to recoup the full value of the rental and we do the rest for you. On top of this we offer in house payment plans to spread the cost and help with cash flow.