Cyclescheme, one of the largest Cycle to Work providers, has responded to HMRC’s ruling that VAT must be accounted for on salary sacrifice payments from January 2012 – including for cycle to work schemes.
The firm has repeated the statement from the Cycle to Work Alliance, which said that when the new ruling is in place employees will typically save up to 42 per cent on their cycle to work bike and equipment.
The firm has been communicating with its employer clients since the announcement yesterday on how the ruling can be administered and understood, and will continue to do so in the five months before the changes take effect, it said.
Cyclescheme added: ‘This is the first stage of a planned campaign that will communicate the correct information and processes to Employers, Employees and the 1,760 strong Cyclescheme Partner Store network.’
Daniel Gillborn, head of commercial operation explained: "As the market leader using our unique web based platform and dynamic savings calculator we have ensured that Cyclescheme are supporting our Employers and their Employees with the correct business logic to account for these changes, keeping the process simple and straight forward for all parties.
“The IBD network will also be kept informed, although no additional work on the part of the bike shop is required at all."
Gillborn added: "Cyclescheme believe that this is the clarification we have been waiting for and will now allow Employers to plan with certainty how to apply the benefits of the Cycle to Work Scheme for their Employees, allowing them them access to savings of up to 42 per cent."