A green alternative – cycle to work

One of the long-standing tax breaks for employees, put in place many years ago, is the tax-free bicycle.

If an employer lends or hires cycles or cyclists’ safety equipment to employees, there is no benefit in kind if:

• the cycles or equipment are available generally to all employees and
• the employees use the cycle or equipment mainly for qualifying journeys, namely primarily for ordinary commuting. Other use of the cycle i.e. private will not disqualify the exemption provided that the other use is not the main use of the bicycle and employees are not expected to keep detailed records to show that they meet this test.

The exemption also covers the provision of a voucher for hiring bicycles and equipment and also electrically assisted pedal cycles.

Such a scheme may take various forms e.g. loans and/or purchase and may also involve salary sacrifice arrangements.

Explore detailed guidance:

Employment Income Manual - EIM21850 >

Cycle to work scheme implementation guidance >