Cycle to work for a Covid-secure commute
This summer, many people will be donning suits and heels again as offices open up to employees. After more than a year of working from home, the prospect of a change of environment, and time spent face-to-face with colleagues rather than on Zoom, will be refreshing and motivating.
Navigating the daily commute might be a little more challenging, though, as the prospect of being on crowded trains and buses will be stressful, even for those who have received the vaccine. Driving could be a solution for some but travelling by car into central London, which comes with the problem of traffic jams, congestion charges and parking fees, is equally off-putting. It also comes with a higher carbon footprint that is wise to avoid.
With this in mind, non-profit organisation Green Commute Initiative (GCI) is working with employers to encourage uptake of its innovative “cycle to work” scheme, which helps fund the acquisition of bicycles and e-bikes by employees via simple monthly pay check payouts. There is no limit on the cost of the bike users can get funding for, and people also benefit from daily exercise during their commute, which is an important boost to physical and mental wellbeing.
As cities across the country invest in new cycle lanes to make commuting by bike safer, GCI is working hard to support independent bike shops (GCI has more than 1,300 suppliers) and advocate for the roll-out of electric e-bikes. Powered by batteries, e-bikes require far less energy from the rider, allowing them to take on hills with ease and cover long distances without breaking a sweat – so no change of shirt required when you get to your destination.
Of course, e-bikes in particular are costly (commuter quality e-bikes cost more than £2,500), which is why GCI’s cycle to work scheme gives between 32 per cent and 47 per cent off of new bikes, with repayments to employers spread over 12 to 60 months. There are no end-of-scheme fees either, and the cost of cycle accessories can be bundled in to the voucher value too (handy, as helmets and locks can be pricey).
To comply with FCA and HMRC rules, users actually hire the bikes from GCI. For this reason, the Hire Agreement is between the employee and GCI which is entirely separate from the Salary Sacrifice Agreement the employee will have with their employer. Each agreement will run for different but concurrent periods of time. Whilst Salary Sacrifice Agreements will be for at least 12 months, the Hire Agreement is for three months. After the hire period has ended, GCI will offer a free-of-charge extended loan to take the bike to six years old. After that, under a separate arrangement, the ownership title is transferred for a nominal £1 processing fee.
Almost anyone on PAYE can receive funding for a bike of their choice (so long as their repayments don’t take them below the national minimum wage). And in practice, the bike belongs to the user from day one. Plus, collective uptake of bikes instead of other modes of private and public transport means lower emissions and less polluted cities. So all in all, the scheme is a hugely beneficial.
How does it work for employers? By coming to GCI, companies can buy a voucher for the hire of a bike package to provide to an employee. The employee subsequently sacrifices the same amount of salary as the price of the voucher. As it is taken from gross pay, lower rate taxpayers save 32 per cent, while higher rate taxpayers save 42-47 per cent. For example, on a £2,500 bike package, a basic rate taxpayer would save £800.
For bigger companies with more than 1,000 members of staff, there is a Corporate GCI platform that comes with its own dedicated portal for managing cycle scheme requests. At the same time, to help ease cash flow, companies can also apply for third-party funding to buy the vouchers. There is a modest charge of about 7 per cent for this, but companies still benefit from savings of up to 13.8 per cent on reduced employer national insurance contributions.
With happier, fitter staff, enhanced corporate social responsibility and a more pleasant urban environment, Green Commute Initiative is helping everyone feel better about their return to office life.