This is, in effect, what the government’s little known Employee Bike Scheme allows workers to do. The employer buys the bike for the employee, together with lights, locks, helmet, clothing, panniers etc, and then deducts the cost from the employee’s wages over an agreed time period.

The advantage is that the employee does not pay National Insurance on the repayments and if the employer is registered for VAT this is deducted from the cost which means that the bike ends up costing the member of staff as little as half of the showroom cost. Halfords will launching an advertising campaign later n the year to advertise the scheme and an independent organisation called Booost has been established to help companies that are interested in establishing their own scheme.

Click on the link below for Booost:

www.booost.uk.com or the link below for the appropriate Inland Revenue page outlining the tax breaks for the scheme

www.inlandrevenue.gov.uk/pdfs/emp2001/ir176.pdf