Monthly payroll is paid on the last but one working day of every month, with pay dates published in advance for each year.
If your application is submitted before the main payroll deadline date for the month then you will see your first salary reduction that month. Otherwise, your salary reductions will start the following pay date.
It is important for you to understand that the Government’s Cycle to Work scheme is based on bicycle hire with no automatic right to ownership at the end of the hire period.
You will not own the bike during the hire period. You will be hiring the bike from GCI and they will retain the ownership until they agree otherwise. They will write to you with ownership options at the end of the hire period, ensuring HMRC rules are adhered to.
GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike other schemes, which charge up to 7% of the total value of the bike. GCI ensures you get the full benefit of the tax break from HMRC by offering you a free of charge loan after the initial hire period. After the loan period, under a separate agreement, we can transfer ownership title to you for a £1 processing fee. The £1 acts as a marker to protect you from any future claim that HMRC may make.
When an employee leaves before the end of the agreement, any outstanding amount on the loan must be repaid within 14 days of leaving the employment. However, the final salary payment must not take them below the minimum wage. If the outstanding amount owed is not fully covered by the final salary payment, the employee must pay it through their own means. This will mean that they lose the tax free benefit on any amount not paid via their salary.
HRMC says that once implemented, a cycle-to-work scheme must be available to all employees with no groups of employees excluded. However, a salary sacrifice arrangement cannot be used if in so doing the employee’s gross pay drops below the NMW. To avoid this, the employee could be offered a lower value cycle package and/or a longer than usual hire period.
Where employees are paid at NMW and salary sacrifice is not permitted, employers must make an alternative offer. This could include loaning a bike without salary sacrifice or making available a pool of bikes for those staff to avoid them being excluded from the offer of a cycle. The University continues to operate the ‘Cycle loan scheme’, offering an interest-free loan of up to £2000, repayable over 12 months.
Where a salary sacrifice arrangement is used, your gross pay is affected, which in turn impacts upon your tax and National Insurance Contributions (NICs). As entitlement to some benefits is based on the amount of NICs that are paid and others on earnings, entering into a salary sacrifice arrangement may affect your current or future entitlement to a range of benefits.
USS and OSPS will accept pension contributions based on ‘notional salary’ i.e. your salary before any sacrifice is made and therefore the benefits of those in these schemes will not be affected. The NHS Pension Scheme, however, will only accept pension contributions based upon the reduced salary.
You must continue to repay your employer for the cost of the voucher. GCI will terminate the hire agreement and you won’t owe GCI anything. It is strongly recommended that you insure the bike.
Yes, you can. Just tell the insurer that you are taking part in a cycle-to-work scheme. Due to FCA rules, GCI cannot recommend a specific insurer so simply do your own research online.
Laka Bicycle Insurance offers GCI customer’s £30 cover for your bike. Get a quote.
All the bikes GCI hires come with a 12-month warranty to cover any faults that may develop. However, you are responsible for any repairs required that are not covered under warranty.
