RG Cycle to Work is a salary sacrifice arrangement. This is an agreement between an employer and an employee to change the terms of the employment contract to reduce the employee's entitlement to cash pay. Through Cycle to Work the employee has the use of their selected bike and safety equipment for the hire period in return for reducing their cash payments.
In order to comply with legislation, all employees must be able to access a loan cycle when a cycle to work scheme is in place, employees must also not enter the scheme if it takes them below National Living Wage. For the employees who would fall below the NMW, Halfords have a unique solution, outside of salary sacrifice. For a single small payment, they will loan a bike directly to the employee – ensuring everyone has access to a loan cycle.
What is Halford’s unique solutions?
For a single payment of 19%† of the bike’s RRP – based on Benefit in Kind rules – Halfords will hire a specific bike to the employee for the duration of the Hire Period. Alternatively, for additional flexibility, Halfords also offer the employee the option of a simple 10% discount off any bike sold by Halfords.
How does an employee apply for this solution?
On the Cycle to Work platform, a message will show that informs the employee that they will fall below the National Minimum Wage (where this will show depends on your setup in implementation).
Many thanks for your cycle2work application, as you are on National Minimum Wage this means you are not eligible for salary sacrifice, however, you can be included with an alternative scheme.
Please contact Halfords on 0345 504 6444 to see what options are available to you, you can also find out more in the FAQs on this site.
NMW Solution Flow Chart
† 19% payment based on current Benefit in Kind rules. Halfords Ltd is advised on tax law and Cycle2work related legislation by one the UK’s leading tax advisors and endeavours to provide recommendations in accordance with prevailing tax law and relevant legislation. Halfords Ltd recommends that all parties seek separate independent tax advice in all circumstances. Halfords Ltd are not tax advisors and accept no liability for the action of any party acting upon recommendations provided by Halfords Ltd. All information is based upon current tax rates at the time of issue. Printed May 2016.