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Cycle To Work, Buy A Bike, And Save Money

January 31, 2023
  • Cycle to Work is a government-based incentive designed to entice more commuters from their cars and onto bicycles. It also happens to be a great way to get your hands on a brand-new bike while saving yourself a whole bundle of cash too!

  • Bike ownership

  • But first, let us address the elephant in the room. Namely that of bike ownership. Cycle to Work is based on bicycle hire with no automatic right to ownership at the end of the hire period. But what does this actually mean in layman's terms?

    Well, in short, when your hire agreement concludes, you will be given the option to take full ownership of the bike. Most schemes will transfer ownership at no additional cost or for a nominal fee (£1). Others, may charge a 7% end-of-scheme fee.

    We would always highly recommend you check these details with your companies Cycle to Work provider when you apply for your voucher. Every scheme provider outlines how the process works in easy-to-follow steps on their respective websites.

  • How much could I save?

  • As an employee, you could save as much as 25% - 47% (dependent upon the rate of tax you pay) on the cost of your shiny new bike. As an added bonus, you can even add on any accessories that may be deemed necessary to your journey. These may include items as varied as bike luggage, clothing, mudguards, bike lock etc. However, items such as GPS computers and workshop tools are not permitted under the rules of the Cyle to Work scheme.

    In recent years the government has relaxed its rules regarding the spend ceiling for Cycle to Work. Previously it was set at £1000, however, this failed to take into account the rising popularity of electric bikes. Consequently, deterring anyone who wanted to take advantage of the scheme to get their mitts on one of these magnificent machines.

    Thankfully, the powers that be recognised the need for change and abolished the £1000 limit. So theoretically, at least, its possible to obtain a bike of any amount. But this does not mean that you have carte blanche to order a bike of any amount. Instead it shifts the onus to your employer, leaving them to decide how much they are happy to let you spend.

    Before you submit an application, we advise you first check what limit your your employer allows with your Cycle to Work administrator. You may be fortunate enough to work for an employer with a consumer credit license, thereby enabling you to spend up to a specified limit dictated by the license.

    Cycle to Work doesn't just benefit the employee either. For every Cycle to Work order submitted, the employer stands to receive the full cost of the bike back, plus up to 13.8% in NICS savings. Then there's the added incentive of a healthier, happier workforce who arrive to work feeling energised and motivated at the start of every work day. It, therefore, works in the interest of employer and employee.

    For more information on Cycle to Work and a helpful calculator to show you how much you could save, check out our handy information page.

  • So, how does it work?

  • Cycle to Work is a salary sacrifice scheme. In short, you sacrifice part of your salary to hire a bike for a pre-agreed period. Once the scheme ends, you have the option to take full ownership of the bike.

    A hire fee is deducted from your monthly wage packet. However, because this fee is deducted from your Gross Pay rather than Net Pay, your tax and National Insurance contributions are also reduced. In effect, you only pay Income tax and National Insurance on your wage AFTER your monthly Cycle to Work hire fee is deducted. Win-win!

  • Are you responsible for the Cycle to Work scheme at your workplace?

  • As we alluded to earlier, its not only the employee who benefits from the Cycle to Work scheme. Thanks to the reduced National Insurance contributions, you as a business can save up to 13.8% through reduced NI contributions. Contact us to find out how we can improve participation and engagement for ‘Cycle-to-Work’.

  • Scheme providers

  • If you search the web, you will see there are several scheme providers. Listed below is a small selection of the most popular providers, each working slightly differently.

    Green Commute Initiative

    • Choose your bike and obtain a quote using our quote tool.
    • Once approved, your employer pays GCI for the cost of the bike.
    • Your employer sets up a repayment plan via salary sacrifice. This can be over 12-24 months or up to a maximum of 60 months. Whatever works best for your employer.
    • Once your initial 3-month hire with GCI expires, they contact you with ownership options. They recommend the extended loan option of 5 years and 9 months. This takes the overall hire agreement to 6 years. At this point, ownership can be transferred for the princely sum of £1.
    • If you wish to take ownership of the bike before the 6 years are up, GCI will contact your employer with information on the tax payable for your P11D.


    • Apply for your ‘letter of collection’, which is then used to make payment to the retailer.
    • Once the scheme starts, the salary sacrifice will be deducted from your pay packet over 12-18 months.
    • The bike is loaned to you for a period of 12 months.
    • Once your hire period expires, Halfords will get in touch to discuss your options. This includes the opportunity to extend the hire period at no additional cost until HMRC deem the value to be negligible. This is typically 4 or 5 years. Once the agreement concludes, you become the rightful owner.


    • Apply for an e-certificate, which can be exchanged on-line to pay for the bike.
    • The bike is loaned to you for a period of 12 months.
    • Once your hire agreement and salary sacrifice conclude, Cyclescheme will contact you with ownership options.

    Please contact us if you require any further clarification or advice regarding how a specific scheme works..

  • The order process

    • First and foremost, you should check that your employer is signed up for one of the many scheme providers. Additionally, it is also recommended that you check the maximum spend that your employer and/or scheme provider permits.
    • Next, search for the bike you would like and any accessories you may require up to the value your employer has specified.
    • The employer then completes a hire agreement with the scheme provider.
    • In due course, an e-certificate is provided and is exchanged for the goods when you submit your order with the cycle retailer. If you are unsure exactly what payment each provider uses, please contact them directly or ask the retailer.
    • The cost of the bike is then deducted from your salary on a monthly basis. (It is, therefore, necessary to be a National Insurance and PAYE contributor).
    • At the end of the hire agreement, your cycle scheme provider will be in touch to discuss ownership options.
  • How to checkout

  • One of the most frequent questions we receive is how to check out using the various Cycle to Work vouchers. There are so many options that it can feel a little overwhelming. So let us assume that you have selected which bike you wish to purchase, added it to the basket, entered your delivery details and are now at the payment screen.

    How do you complete your purchase? It will largely depend upon which Cycle to Work provider you choose. Some providers, like cyclescheme.co.uk, will email you a voucher that includes a unique code to enter at checkout. Others will instead email a voucher or letter of collection that can be used after the order has been placed.

  • Cyclescheme.co.uk

  • The most important thing to note here is that you must have received your voucher from Cyclescheme before you complete your order.

    • Select the Cyclescheme / Cyclescheme.co.uk option from the drop-down list.
    • Enter the certificate number, which is located at the top of the voucher.
    • Once the certificate has been validated, you will be asked to input payment details for any outstanding balance above the voucher amount.
    • Once your order is completed, it becomes live on our system.

    Please get in touch if you experience any issues with redeeming your voucher at checkout.

  • Vivup

  • There is a popular misunderstanding regarding the wording of this scheme that may lead you to think that Vivup actually orders the bike for you. However, this isn’t the case. In all instances, you will need to place the order yourself. If you don’t, we have nothing to match the payment to when Vivup pays for the bike.

    • Select the Vivup option from the drop-down menu and enter payment details for any amount above the voucher total (if applicable).
    • The order will register on our system but isn’t ‘live’ until we receive payment from Vivup. Any quoted delivery times will be from the date we receive payment, not when the order was originally placed.
  • Other providers

  • Many scheme providers will send you a voucher either electronically or through the mail. This is then redeemed against the goods. With this payment method, it is possible to place the order in advance of the voucher being in your possession.

    • Select your scheme provider from the dropdown menu and enter payment details to settle any outstanding balance.
    • Once you have placed the order, email a copy of your voucher to accounts@ribblecycles.co.uk along with your order reference number.
  • Please note that until we receive a copy of your voucher, the order is not LIVE on our system. Therefore any delivery estimates quoted are null and void until such time as we receive your voucher.