Budget 2016: Cycle 2 Work scheme to continue

There have been rumours over the last few months that the very popular cycle to work scheme that enables employees of participating employers to buy a bike through salary sacrifice over a period of several years could be brought to an end. However, the chancellor has today announced the C2W scheme will continue.

In today’s budget, George Osborne announced, “The government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”

The C2W scheme allows employees to purchase a bike up the value of £1000 paid for from their gross salary (before NI and Tax is deducted) therefore effectively reducing the amount of salary (hence ‘salary sacrifice) from which tax is eventually deducted.

Technically the employee is renting the bike from their employer for a set period of time with a final option to buy payment added at the end to transfer ownership of the bike. There are other VAT issues buried in there to complicated things appropriately but in the end all the maths adds up to a cheaper bike. The only condition is that you use your bike to ride to work, although we’ve yet to hear of any inspection on that condition being carried out.

Other health related budget measures include a sugar tax on soft drinks manufacturers, which presumably will include energy drinks.

Mark Alker

Singletrack Owner/Publisher

What Mark doesn’t know about social media isn’t worth knowing and his ability to balance “The Stack” is bested only by his agility on a snowboard. Graphs are what gets his engine revving, at least they would if his car wasn’t electric, and data is what you’ll find him poring over in the office. Mark enjoys good whisky, sci-fi and the latest Apple gadget, he is also the best boss in the world (Yes, he is paying me to write this).

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