If you operate the “cycle to work” scheme for your employees, coronavirus may have resulted in the conditions for the tax and NI exemption not being met. This has prompted a statement from HMRC clarifying the position. What’s the full story?

The cycle to work scheme allows you to provide your workers with bikes and biking equipment without it counting as a taxable benefit in kind. The conditions for the exemption require employees to use the bikes or equipment “mainly for qualifying journeys”. Namely, travel between their home and their workplace.

Because of coronavirus many employees have worked at home rather than at their usual place of work. This might mean they don’t meet the condition for qualifying journeys.

HMRC has announced a temporary relaxation of the rules which allows the exemption to continue for employees who were provided with a bike etc. under a cycle to work scheme on or before 20 December 2020 without having to meet the qualifying journeys condition. Presumably, therefore, the exemption can apply for the whole of 2020/21 and 2021/22 regardless of how the bike etc. is used during those tax years.

Employees who you provide with bikes etc. after 20 December 2020 will need to meet all the conditions for the exemption to apply.

This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.