Cycle to work scheme

[The1nonly1]

Hi,

Can somebody explain how this works? I understand that you get a certificate to take to the place you are getting your bike from but how is it paid for? Do I pay out of my wage from my employer?

Lots of information would be greatly appreciated.

Thanks

 

[The1nonly1]

Your employer loans you the money to buy the bike and qualifying accessories, and then you pay it back out of your gross salary, so you save the tax and NIC on the cost. At the end of the term of the deal the bike reverts to your employer, but your particular employer will probably either give it you, in which case you'll pay tax on it as a gift, or you'll pay an agreed value for the bike, like 25% of the cost or something, which can be settled in various ways with varying consequences.

That's a rough general summary. The specifics will depend on the particular deal on offer and on how much you, your employer and the bike shop bend the rules.

Thanks, so if im paid £1300 per month now (net wage), will the cycle scheme payment be taken from this, reducing my monthly net wage?