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Cyclescheme FAQs

The Scheme

What is the cycle to work scheme and who are Cyclescheme?

The Cycle to work initiative enables employees to loan bicycles and safety equipment from their employers through a salary sacrifice. This means that employees receive tax and PRSI savings that can be up to 47% of the retail price of the bike and associated safety equipment.

Cyclescheme are an independent limited company created to help both employers and employees make the most of the cycle to work initiative brought into place by the Green Party in the 2008 budget.

What is a salary sacrifice arrangement and how do I make my savings?

A salary sacrifice happens when an employee gives up the right to receive part of the pay due to them under their contract of employment in return for the employer’s agreement to provide some form of non-cash benefit, in this case the purchase of a bicycle and related equipment. You are paying back the purchase of your goods from gross - rather than net - salary for the 12 months following the purchase.  
An employer must operate the scheme. The bicycle can be funded by the employer through salary sacrifice (of the employee) but the employer must purchase it. If employers pay for the bicycle, they can claim it as a tax-exempt benefit-in-kind. Where funded by salary sacrifice there will be savings on tax, PRSI and levies. The scheme means an effective saving of at least 47% on the cost of a new bicycle for a top rate taxpayer.

Is there any limit on the price of the bike I can obtain?

No, there is no limit on the price of the bike, but you will only be able to tax relief up to a maximum of €1,000. The balance of the purchase will be liable to tax in the standard way.

Who can use Cyclescheme?

Employees paying tax through PAYE, who have a contract that outlasts the duration of the salary sacrifice period are eligible, provided they are over 18 years old, earn more than the National Minimum Wage after wages have been reduced by the loan repayments, and have completed the employer's probationary period (if applicable).

What can the bike be used for?

You can use the bike however you like, but at least 50% of the bike’s use must be for cycling to, from and whilst at work. You don't have to cycle to work for a specified number of days throughout the year and you don't have to record your trips or mileage.

Can I get any bike?

You can choose any bike providing your chosen Cyclescheme partner can supply it.

Ownership - Is the bike mine straight away?

Yes, the bike and goods immediately become the property of the employee, but the employee has an obligation to pay back the purchase price, minus the tax savings, to the employer within 12 months.

How long does the scheme last for?

The salary sacrifice reductions will take place over a 12 month period.

How much can I save?

Typical savings are equivalent to 33% of the retail price of the equipment but the precise amount depends on your personal tax band. An individual being taxed at the higher rate will save a bit more (around 47%) than someone who pays standard rate tax.

If the employer uses external finance, to buy the bikes, then savings may be around 5-9% less than quoted above. This is because the cost of finance has to be passed on to the employee to avoid it becoming a benefit-in-kind.

How are the savings made?

Savings are made because salary sacrifice reduces the gross salary – before any tax and PRSI has been deducted – so the amount the amount of tax and PRSI paid is less than usual.

Can an employee opt out of the scheme if the no longer wish to participate?
No, stipulations made by the Revenue Commissioner will not allow you to opt out. Once you have signed the Salary Sacrifice Agreement all outstanding monies need to be paid back.

The Process 

How do you request a Cyclescheme voucher?

• Visit www.cyclescheme.ie or call 01 442 9117 to locate a Cyclescheme partner shop local to you. If any independent bike shop is not partnered with us, let us know and we will get them on board
• Visit the shop and choose a bike and the relevant safety equipment. You will be provided a paper quote by the partner shop
• Either pass your quote to the administrator of your scheme, or send it straight to Cyclescheme. This will be entered onto the Cyclescheme system and your employer will be contacted to ask to either approve or decline your request
• Once approved, Cyclescheme will invoice the employer and send you a loan agreement. Once the invoice has been paid, and the Salary Sacrifice Agreement signed, you will be issued with a secure voucher
• The secure voucher can then be exchanged for the bike and safety equipment in your chosen partner shop

Pay

What is a salary sacrifice arrangement?

A salary sacrifice happens when you give up your right to receive part of your pay in return for the employer's agreement to provide some form of non-cash benefit, in this case the loan of a bicycle and related equipment.

What happens if I leave my job or I'm made redundant?

The agreement to pay the Salary sacrifice is non-cancellable, so you will be obliged to pay the remaining amount in full, without any tax exemptions (i.e. from your net salary). The ownership of the bike will then be transferred to you.

What happens if the bike gets stolen before it's paid for?

If the bike is stolen then you have effectively left the scheme and need to pay all outstanding monies from your net salary.  It is very important to insure the bike, and any goods fitted to the bike, to safeguard against the losses following theft. You can obtain safety equipment from Cyclescheme's partnering shops, where you can ask for  'Sold Secure' D-locks and cable locks to conform to insurance companies' requirements.

Is there a credit check?

There is no credit check.

Maintenance and Responsibility

Who is responsible for maintaining the bike?

It is your responsibility to maintain the bike. The partner shop will be able to advise you about necessary servicing depending on how you use your bike. Many shops offer a free first service and subsequent servicing advice depending on usage.

Whose responsibility is it to insure the bike?

It is your responsibility to insure the bike.

What happens if the bike gets stolen before I’ve paid for it?

It will still be down to you to complete the full payment even if you no longer possess the bike. It is very important to insure the bike, and any goods fitted to the bike, to safeguard against the losses following theft. You can obtain safety equipment from Bike to Work partnering shops, where you can ask for approved ‘Secure’ D-locks and cable locks to conform to insurance companies’ requirements.

What's the best way to insure the bike?

Your Household policies are usually the cheapest option but you must ensure that the bike is insured when in storage away from your home, and that the bike's value doesn't exceed the upper claim limit. If the bike can't be covered on your home insurance a bicycle insurance specialist, such as the CTC may be able to help.

What happens if the bike gets damages beyond repair?

Since you can no longer cycle to work, you have effectively left the scheme and will need to pay all outstanding monies from your next available net pay. This is why obtaining adequate insurance is critical.

Miscellaneous

Can I get a bike through mail order?

Cyclescheme's partner shops are capable of supplying bike packages mail order from their shops, but there are distinct advantages when getting a bike from your local bike shop that will be the first port of call for advice, servicing, after sales and warranty. Some mail-order specialists are not part of the Cyclescheme Partner network.
Please note that no UK-based partner store can supply bikes to the Eire scheme.

How often can I get a bike through the scheme?

Employees can request a bike through the scheme once every 5 years.

Cyclescheme Ltd, PO BOX 3809, Bath BA1 1WX. Tel (ROI) 1 442 9117

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