Cyclescheme operates on behalf of NES to provide this salary sacrifice scheme to NES employees. NES purchases the bicycle and accessories at full retail value and the employee then hires the goods from NES.
Monthly loan repayments are recovered from your salary prior to the deduction of tax and National Insurance. At the end of the loan period, the ownership of the goods reverts to Cyclescheme, with an option to purchase the goods at a Fair Market Value payment. This allows you to save the cost of the tax and national insurance deductions from the value of your purchase. However, please be aware that a salary sacrifice scheme means your salary, for the purposes of mortgage applications etc, is reduced by the loan amount until repaid.
The Government, in order to encourage more commuting by bike, provide a salary sacrifice scheme whereby you can forego part of your salary each month in order to take advantage of tax and National Insurance savings on the cost of a bike and safety equipment.
The maximum purchase value available (including VAT) is £3,500 as long as your gross salary less the purchase value is no less than the national minimum wage (if you are between school leaving age and 22 years) or national living wage (if you are 23 or over).
NES works with Cyclescheme Ltd who operate the scheme. The hire agreement is between Cyclescheme and the NES employee. You are asked to enter into a Salary Sacrifice agreement with NES whereby the purchase value of the bicycle and equipment is recovered from your salary over 12 months. The deductions are taken before tax and National Insurance deductions therefore providing you with savings.
Please click on the link below which will take you to the Cyclescheme website personalised for NES employees. Here you will find full details of the scheme and the process you need to follow.
The scheme is open to all NES full-time or part-time employees whose term of employment is more than the period of the loan (12 months from when the purchase is authorised). In order to take advantage of the tax breaks that result from salary sacrifice please also note that the following criteria must be met.
- They need to be a UK Taxpayer.
- They need to be over 18 years of age to comply with the consumer credit act legislation.
- If they are aged under 23 then they need to be earning £6.83 if aged 18-20 or £9.18 if aged 21 to 22 (i.e. National Minimum Wage)
- If they are aged over 23 then they need to be earning £9.50 per hour (National Living Wage)
Any queries as to whether a NES employee qualifies for the Cyclescheme within NES can only be answered by Finance (email@example.com) and not Cyclescheme.
It is important to bear in mind that the goods and the Bike are the property of Cyclescheme but that the employee is totally responsible for the bike during the initial hire period.
When your Hire Agreement and Salary Sacrifice ends, you can keep your bicycle/equipment by making an additional payment. Cyclescheme will contact you regarding ownership options at the end of your Hire Agreement. Please make yourself familiar with these options as they are additional costs incurred.
You can log into the cyclescheme website and use their savings calculator to work out your personalized savings estimate.
When you purchase your bicycle/equipment you will be asked to sign a Salary Sacrifice Agreement to give NES permission to sacrifice your salary. Part of that agreement includes the terms of settlement of any outstanding monies should you leave NES before the end of the initial hire period of 12 months. The outstanding monies will be recovered from your final net salary payment and any balance will be invoiced. Settlement will be taken from your Net Pay because once you leave NES, you will also leave the Salary Sacrifice scheme, and you are no longer eligible for tax/NI concessions on the outstanding balance. This may also include a sum equating to the fair market value at the time of the termination (to transfer ownership of the Bike to the Employee) You will be advised at the time of leaving of any purchase/administrative sums due.