Cycle Purchase Schemes in the UK: Making Biking Affordable and Sustainable
If you’ve ever wished you could get your dream bike, whether that’s a sleek commuter, a gravel explorer, or an electric bike, without paying the full price upfront, you’re not alone. Across the UK, cycle purchase schemes (often known as Cycle to Work or salary sacrifice bike schemes) have become one of the most popular employee benefits for cyclists.
What Are Cycle Purchase Schemes?
Cycle purchase schemes allow employees to obtain a bicycle and/or accessories through their employer using salary sacrifice — that means giving up part of your salary in return for a benefit (the bike) before tax and National Insurance are applied. This arrangement reduces your taxable income and can lead to significant savings compared with buying the bike outright. The most common form of this in the UK is the Cycle to Work Scheme which was introduced as part of the government’s efforts to encourage active travel and reduce car use.
How Cycle Purchase Schemes Work
Your employer signs up with a cycle scheme provider (e.g., Cyclescheme, Workplace Bikes).
You choose your bike and accessories such as helmets, lights, panniers etc up to a value set by your employer.
The provider issues a certificate or voucher that you can use to purchase from a participating retailer.
Your employer buys the bike up front, and you pay back the cost via monthly salary deductions taken from your gross pay before tax and NI are calculated.
At the end of the hire period (often 12 months), you usually have options:
Buy the bike at a fair market value set by HMRC,
Extend the hire and potentially reduce that value further,
Or return the bike (depending on the scheme).
This system lowers the effective cost of the bike due to savings on Income Tax and National Insurance.
Typical Savings
How much you save depends on your tax band:
Basic rate taxpayers can often save around ~25–30% or more.
Higher or additional rate taxpayers may save up to ~40% or beyond.
Because the deductions come from gross pay (before deductions) you effectively pay less tax overall. A major reason these schemes are so attractive.
Popular Providers in the UK
There are several well-established providers helping employers run cycle purchase schemes smoothly. Some of the most common include:
Cyclescheme — one of the largest providers.
Workplace Bikes — integrates with many employers to offer bikes from major brands
Many bike shops (like Decathlon, Evans Cycles and local independents) will accept certificates from these schemes, meaning you can often choose where you buy.
Why Employers Offer These Schemes
It’s not just employees who benefit:
Cost Savings for Employers – Employers can save on National Insurance contributions when staff take part in salary sacrifice schemes, reducing their employer NI bill.
Health, Wellbeing & Productivity – Encouraging cycling improves staff wellbeing, reduces sick days, and boosts morale.
Supports Sustainability Goals – Offering a bike scheme demonstrates company commitment to sustainable travel and environmental targets.
What You Should Consider Before Joining
While these schemes are widely praised, there are a few points worth thinking about before signing up:
Ownership vs Hire
You don’t automatically own the bike after the salary sacrifice period. HMRC sets rules for how bikes are treated at the end of the agreement. How much you pay to take full ownership varies with time and value.
Job Changes
Leaving your employer before the end of the hire period can complicate things and you may be liable for outstanding costs.
Provider Rules & Fees
Some retailers charge administration costs (e.g., percentage fees) linked to the scheme. Check this before enrolling.
Eligibility
Participants must typically be on the employer’s payroll (PAYE), meaning self-employed people can’t use the standard scheme. Advocacy groups are exploring ways to widen access for lower-income and freelance workers, but these options vary.
Walk Wheel Cycle Trust
There are a number of tax efficient cycle purchase schemes available in the UK whereby employees can purchase bikes at a saving of up to 40% through salary sacrifice. Employers also benefit by saving money through National Insurance Contributions (NICs).
Dont forget your cycle safety accessories.
Cycle purchase schemes include
