BLOG4th Aug 2022

As we approach National Cycle to Work Day on 1 August 2024, the significance of cycling for both personal health and environmental well-being continues to grow. 

Originally introduced by the UK government in 1999, the Cycle to Work scheme aimed to encourage healthier commuting and reduce environmental pollution. Fast forward to 2024, and environmental consciousness is at the forefront of public awareness and integrated into many business strategies.

Government statistics report that over 1.6 million commuters, collaborating with over 40,000 employers, have embraced the Cycle to Work scheme since its inception. With approximately 1.1 million companies considered employers in 2021, the question arises: is it time to further promote and encourage more employers to adopt the cycle-to-work initiative? At AAB, we uphold a dynamic environmental strategy, actively supported by our employees. As part of our commitment, AAB offers employees various opportunities to contribute to environmental sustainability, including participation in the salary sacrifice Cycle to Work scheme.


The Department for Transport provides a useful guide outlining the various options available to businesses interested in implementing a Cycle to Work scheme.


For individuals, participation in the scheme translates to cost-effective commuting, improved health and well-being, and potential tax and National Insurance savings. On the other hand, businesses may experience increased footfall in town centres, positively impacting local businesses. Offering such schemes can also enhance recruitment and retention rates, crucial in the current employment landscape. While these schemes are generally cost-neutral for businesses, certain considerations need attention, as outlined below. Additionally, cycling contributes to reduced emissions, promoting a healthier environment for society.


Employers can implement a Cycle to Work scheme in various ways, such as loan schemes or pooled schemes. However, salary sacrifice schemes, due to additional taxation and National Insurance Contribution (NICs) benefits, tend to be the most popular. Any employer can run a Cycle to Work scheme, but tax and NICs benefits apply only to those treated as employees for PAYE tax purposes. For self-employed individuals, seeking specialist tax advice is advisable if using bicycles and equipment for business purposes.


The Cycle to Work scheme includes bicycles for active travel and any necessary cyclist safety equipment. While providing safety equipment is optional, if offered by the employer, it must conform to required safety standards.

Salary Sacrifice

Although certain employees may not benefit from a salary sacrifice scheme (e.g., if entering a scheme would reduce their hourly rate below National Minimum/Living Wage rules), many employees find significant benefits in using salary sacrifice to access a bicycle for commuting. Employers also enjoy NICs savings (currently 15.05% and 0.5% for the Apprenticeship Levy). This arrangement involves employees forgoing a portion of their salary in return for a bicycle loan, reducing pay subject to tax and NICs. Formal agreements with employees must be in place, and the scheme must be offered to all employees, with the requirement that the bicycle is used for work travel at least 50% of the time. There is no limit on the value of the bicycle or safety equipment supplied.

Other considerations

  • Restrictions may apply for loans to individuals under 18 years of age
  • Employers should consider initial cash flow implications if a significant number of employees opt for the salary sacrifice scheme
  • Choosing the right scheme and supplier is important to appeal to all experience levels

If you are interested in understanding the benefits of a Cycle to Work scheme or exploring salary sacrifice arrangements (applicable to pension contributions as well), please contact Karen Thomson or our Employee Benefits team by filling in the form here.

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