Here's an example of how Pedal2Work helped 'David'. He is a company employee and pays tax via PAYE.
David's chosen Pedal2Work package
Commuting Bike - £ 500.00
Helmet - £ 30.00
Lights - £ 10.00
Reflective Jacket - £ 60.00
Total price before savings: £ 600.00
Healthy Living..
Cycling is recommended
by the NHS as part of active living.

Look Better...
Cycling uses fat for fuel. Your work journey will help you lose weight.
 
Explanation and Savings made using Pedal2Work
1. Under his employer's Pedal2Work scheme, David chooses to have the loan of a bike and accessories retailing at £600 - (£500 bike, £30 helmet and £70 of safety related accessories)
2. His employer reclaims the VAT - reducing the cost to £515.11
3. This net amount is met by David agreeing to a salary sacrifice whereby his gross pay is reduced by £42.93 per month over 12 months
4. The monthly net cost to David will be £28.76 because he doesn't pay tax or national insurance on the gross pay (£42.93) that he has sacrificed
5. At the end of the 12 month period David's employer offers the ex-loan bike for sale at a fair market price, typically 5% of the original value +VAT. e.g. £35.25
6. The cost to David is:
- Net salary given up £28.76 x 12 months = £345.12
- Cost to buy the bike at end of the period = £35.25
- Total cost to David (63% of retail price) = £380.37
 
Total saving to David: £ 219.63 - 37%!
'Fair market price' is usually five percent of the original package price. So, after a 12 month 'loan' for a bike package costing £600, the employee takes full ownership for just thirty five pounds. This is as yet untested by HMRC.
The actual discount available to an employee will be based upon their own personal tax circumstances (higher tax payers get higher discounts) and whether their employer can recover all VAT. Some public sector employers, charities and some others may not be able to recover all the VAT.
In rare cases, where employers decide to directly bear all scheme costs themselves, employees need no budgets at all, with the full cost of their loan bikes then legally treated as 'non cash tax free benefits'.

 

Feel Better....
Exercising, especially outdoors, boosts your immune system.

Alertness......
Riding to work will help you become more alert, ready to accept the challenges of the day.
Pedal2Work is a division of South Downs Bikes Ltd. With many years of experience in the bike trade they have an excellent reputation for friendly, personal and efficient service. Dealing with bike experts will give you the confidence that you will be purchasing the right package for your needs, something you will really enjoy using.
*Savings are affected by a company’s tax status, finance arrangements and your personal level of taxation. Pedal2Work, South Downs Bikes Ltd, The Forge, 38 High Street, Storrington, RH20 4EE