Cycle to Work
UK tax glossary · Last reviewed: April 2026
The Cycle to Work scheme lets employers offer bikes and cycling equipment through salary sacrifice. You save Income Tax and NI on the cost — a basic-rate taxpayer saves approximately 32% (20% tax + 8% NI + 4% employer NI passed through in some schemes), a higher-rate taxpayer saves around 48%.
Originally capped at £1,000, the cap was removed in 2019. Bikes exceeding £1,000 require the employer to have Consumer Credit authorisation. Most schemes run for 12 months, after which you typically pay a small 'fair market value' amount to own the bike outright.
You must use the bike mainly for qualifying journeys (commuting to work). The scheme is HMRC-approved and widely available through providers such as Cyclescheme and Halfords. Check your employer's scheme before purchasing.
Worked example
Bike cost: £1,200. Sacrifice over 12 months: £100/month gross. Basic-rate employee saves: £100 × 28% (tax + NI) = £28/month. Annual saving: £336. Net cost: £864 rather than £1,200.
Common questions
Can I use the Cycle to Work scheme for an e-bike?
Yes. Electric bikes are eligible as long as they still qualify as pedal cycles (the motor assists rather than replaces pedalling). E-bikes under 25 mph assistance qualify.
What happens if I leave my job before the salary sacrifice period ends?
Your employer will typically deduct the outstanding balance from your final pay. Check your scheme agreement — some employers write off the remainder, others require full repayment.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.