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Half-price bikes – the real deal

There’s been no end of confusion about the Booost scheme for workers to get tax reductions on bikes through their employers, including a fair bit of clear-as-mud slinging on the forum. So what’s really going on? We went straight to the horses’ mouths of Booost and Halfords, who are one of the major retailers involved in the scheme, and this is what they came up with.

“In 1999 the Inland Revenue issued its guide to Green Travel Plan (IR176) which outlined a number of tax and national insurance concessions which can be offered by employers to their staff to encourage greater use of alternative modes of transport. The guide lays out a framework through which a standard rate taxpayer may save 22% tax and 11% NIC off bikes and cycle safety equipment in an employer run scheme.

The scheme allows employers to purchase bicycles and safety equipment for their staff. The bike is loaned to the employee for a defined period – usually 18 months. The employee pays the employer back over the period via salary sacrifice. At the end of the period the employee may be given the chance to own the bike for a nominal payment, which represents its fair market value. VAT (where eligible) may possibly be reclaimed on the purchase of the bike by the employer, and that amount may then be passed onto employees as an additional saving. Halfords and Booost can provide advice on how this may be achieved.

Savings of up to 50 per cent off RRP are a reality, but could be offset slightly by the costs of finance depending on how your employer purchases the bicycles. If the purchase is financed, then the cost is usually passed on to the employee. This is still however a much more efficient way to use your money to get a bike than opting for high street finance.

Unfortunately the lack of clarity regarding how the scheme can be implemented has meant that only a few organisations have so far chosen to make the scheme available to staff. Two companies who are doing their best to increase awareness and rectify this situation are Halfords – who developed their Bikes4work scheme – and BOOOST who offers considerable experience in employee relationship marketing (ERM) and has been instrumental in establishing a network of independent bike dealers (IBDs) for an even wider choice of brand name bikes.


So what do we think?

BOOOST and Halfords continue to develop and market the scheme. In their opinion any scheme, which encourages individuals to take a journey by bike rather than by car can only be a good thing, both in terms of the environment and people’s health. Congestion charging, toll roads and work place car park tax will at some point be waved at us all, and it will not be long before commuters look for faster and healthier means of transport to get to and from work rather than being stuck in the never ending UK traffic jam.”

For more information on how your company can implement the scheme contact: –
Booost – 01582 406111 www.booost.uk.com
Halfords Business Services – 08700 660511 www.halfordsb2b.com.


FAQs

Q: – Is there a limit on the amount an employee can spend on a bike?

A: – No, there is not, although employers often impose their own limit.
Q: – What if I leave the company?
A: –
You will be responsible to pay back any amounts outstanding, which will be taxable
Q: – Can I just buy a frame?
A: –
The intention of the scheme is that complete bikes are purchased

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