Popularity of the Bike Scheme has surged throughout 2020, but actually cycling to work hasn’t been possible for many.
Remote work and furlough for example have meant employees can’t meet the ‘qualifying journeys’ rule of the scheme.
In response to this, the UK Government have eased some of their rules around the scheme to coincide with the restrictions put in place due to the coronavirus pandemic.
The existing rules around ‘qualifying journeys’
Government rules state that employees must use their bike or accessories acquired through the scheme mainly for journeys to and from work or in the course of work.
Usually, an income tax Benefit in Kind charge is applied where employees don’t meet these rules of the scheme.
However, the Government have now acknowledged the changes relating to COVID-19 and have relaxed this rule for many.
A time limited easement has been introduced meaning this rule will now not apply to existing users of the scheme for a set period of time.
How the time limited easement works
This easement applies to anyone who has acquired a bike or accessories through their Bike Scheme on or before 20th December 2020 and will apply until the 5th April 2022.
Anyone who has applied from 21st December 2020 onwards will still be subject to the existing rules where the primary use of the bike or equipment should be for ‘qualifying journeys’.
What this means for you
If you already run a Bike Scheme or you’ve participated in one yourself, keep this in mind when it comes to yours or your employees’ use of bikes and accessories acquired through the Bike Scheme.
Let your colleagues know of the new easing of these rules and make sure everyone is aware of when the easement of rules ends.
You can read the full statement by Financial Secretary Jesse Norman on the UK Government website here.
What if you don’t already have a Bike Scheme in place?
Unfortunately, this new time limited easement won’t apply to new applicants of the scheme from the 21st December 2020. However, following continued Government investment in greener modes of transport and cycling infrastructure along with a surge in popularity in cycling, the Bike Scheme is a great employee benefit to offer.
Through the Bike Scheme employees can save up to 42% on the cost of a brand-new bike and accessories.