Get On Yer Bike
Most employees know that they are entitled to a mileage allowance when travelling in their own car on behalf of their employer. This has been set at 45p per mile since 2011 (when it rose from the old rate of 40p) for the first 10,000 miles and at 25p per mile thereafter. This rate is calculated by the Revenue to include not only fuel, but wear and tear on your vehicle as well. What many employees do not know, however, is that they are also entitled to a mileage allowance for riding their bicycle for work purposes. This is set at 20p per mile. Unlike cars there is no reduction after the first 10,000 miles but if you travel this many miles for work by bicycle in a year I applaud you and you certainly deserve the full mileage allowance. There is another way that an employee can benefit when using a bicycle for work and this is with government green incentive ‘Cycle to Work’ which allows tax exemption for the hire of a bicycle provided by an employer. Briefly the employer pays for the bike and rents it back to the employee, deducting the cost of the rental directly from gross pay thus providing a saving on tax and national insurance for the employee and also possibly saving themselves in employer national insurance contributions. The hire can also cover safety equipment, such as a helmet and is available for bikes costing up to £1,000. The hire period is usually 12 months and most employers give the employee the option to purchase the bike at the end of the hire period. Scheme administers boast that this represents a 25% saving on the cost of a new bike. Further details on the scheme can be found at: https://www.cyclescheme.co.uk/employers/about-the-scheme although there are other sites offering the same, or similar, deal. It should be noted that it is voluntary on behalf of the employer and there is no obligation for them to offer the scheme, but with potential tax savings this may be an incentive for employers to at least consider it.