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Introduction

There are a number of exemptions in relation to the provision of bicycles and cycling equipment to employees. There are further rules in relation to the transfer of ownership of these items to the employee at the end of the hire period which need to be considered when providing this benefit. These are all addressed below. The exemption also includes vouchers provided by employers to employees allowing them to hire bicycles and equipment.

HMRC guidance is at EIM21664–EIM21668. See also Simon’s Taxes E4.715A.

Exemption for the loan of bicycles and safety equipment (known as Cycle to Work)

There is an exemption from tax and NIC where the employer provides of bicycles and associated safety equipment to employees where certain requirements are met. This is widely known as Cycle to Work, which refers to the combination of this exemption with salary sacrifice.

The requirements are as follows:

1. •

   there is no transfer of ownership of the bicycle or equipment to the employee

2. •

   the employee uses the bicycle or equipment mainly for qualifying journeys, and

3. •

   bicycles or equipment