PAyment options

How does GCI work?

Your employer buys a voucher which entitles you to the hire of a bike of your choice directly from us. Because we’re
authorised by the FCA there is no £1,000 limit.

The cost of the voucher is the same as the bike so for a £1,500 bike the voucher is £1,500.

You repay the cost of the voucher by sacrificing a part of your gross (before tax & NI) salary. This means you save the tax and
NI that you would pay if you bought the bike from your net (after tax) pay. Your employer also saves 13.8% employer’s NI. So
it’s worth them doing it.

At the end of the hire period we canʼt give you the bike because you would incur a tax liability. So, we make you a free of
charge loan of the bike for a further five years and nine months. After 6 years, under a separate agreement, we can transfer to
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.

We manage all the end of scheme arrangements so there is nothing for your employer to do and best of all no end of scheme
sting as there is on old fashioned Cycle to Work schemes.

How does the cycle to work scheme work?

Cycle to work schemes allows employers to offer their employees the use of a bike for commuting in exchange for a salary
sacrifice. The salary sacrifice enables the employees to use their gross pay to reimburse the employer for the cost of the bike.
The gross pay is before tax, so the employee saves the tax and national insurance which would have been due on the amount
sacrificed (28%*, 42% or 47%). It also allows employees to spread the cost over monthly pay packets, making the acquisition
more affordable.

* From 6th April 2024, due to a reduction in the National Insurance rate, the savings on the Cycle to Work Scheme for basic rate
tax payers will reduce from 30% to 28%.

Is this HMRC compliant?

Yes.  You can see the confirmation in the third paragraph on the Employment Income Manual page of their website.
“The exemption also covers the provision of a voucher for hiring bicycles and equipment.”

One of the big four accountancy firms said:
“Our review of the GCI documentation has confirmed that the scheme arrangements are
robust and comply with the relevant legislative exemption in respect of cycles and cyclist’s
safety equipment.”

Please ask us if you would like to see a copy of their report.

How long is the agreement for?

There are two separate agreements:

The salary sacrifice agreement is between the employer and employee and covers the repayment of the voucher cost. This can
be for any period longer than three months that both parties are happy with. Common terms are 12, 18, 24 months but it could
be for as long as 60 months.

The hire agreement is between the employee and GCI Ltd. This is unaffected by the length of the salary sacrifice.

Why no £1,000 limit

Green Commute Initiative is authorised by the Financial Conduct Authority for consumer hire up to any value.  Since you’re hiring the bike from GCI, your employer doesn’t need FCA approval.   View our FCA registration

During the Covid-19 crisis, I have been working from home. Can I still get a bike through the
scheme if I’m not currently commuting to work?

Yes, you can. HMRC rules state that the majority of the use of the bike must be for commuting and this can be over the
lifetime of the bike. So whilst you may not use it much for commuting at the moment, you will more than make up for that
over the coming years. You may also want to take time to build your fitness levels in preparation for your new commute to
work. By working at home you are probably saving money by not indulging in daily coffees or buying train tickets. So it makes
sense to get a new bike now so you are prepared for when your place of work does reopen and life returns to some sort of
normality.

Does the scheme just offer E-bikes?

No, you can get a normal bicycle through the scheme. You can choose from E-bikes, road or off-road bikes, folders or cargo
bikes. If it’s a bicycle under the Road Traffic Act, it qualifies.

How to cycle to work in a suit?

E-bikes are the future of commuter travel. The battery assistance kicks in when you need it meaning you don’t need to get hot
and sweaty cycling up hills or going long distances. This means you can cycle to work wearing your usual business attire
without the need to change or shower when you arrive at your destination.

Is there a maximum on how much I can spend?

Employers can set internal limits for employees which could be calculated as an actual amount or a multiple of a month’s gross
salary. Sound judgement should be made when considering if an employee can actually afford an expensive bike package.

Is there anything to pay at the end of the scheme?

GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike other schemes which charge up to 7% of the full 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 the 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.

How much money will my employer save?

Employers can typically save 13.8% of the total value of the salary sacrifice, due to the reductions in Employers’ National
Insurance contributions. The savings will reduce slightly if the employer has opted to use third party finance or if 30-day terms
has been agreed.

How much will i save? 

This all depends on which income tax-band you are in.  This coupled with your national insurance contributions will give you the percentage of what you’ll save from your gross salary.

Example
Basic Taxpayer Rate = 20%.
National Insurance contributions = 8%*.
Total saving = 28%*.

Additional rate tax payers can save as much as 47%.
To find out how much you will save on your bike package, use our savings calculator.

* From 6th April 2024, due to a reduction in the National Insurance rate, the savings on the Cycle to Work Scheme for basic rate tax payers will reduce from 30% to 28%.

Will I lose my tax-free benefit if I leave my employment before the end of the agreement?

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.

I’m a Director of my own company, can I take part?

If you pay PAYE as a Director you will qualify. You may wish to consult your accountant for advice.

I am self-employed, can I take part?

Sadly, you will not be able to take part because your tax arrangements are different. You may be able to claim business use for
the bike though.

Taking part in the scheme would take me below national minimum wage, what can I do?

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 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.

Will my state benefits be affected by salary sacrifice?

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.

Will salary sacrifice affect my workplace pension?

Yes, reducing your gross salary will most likely reduce your pension contributions, which in turn affects your final pension pot.
However, your employer might have different pension arrangements in place. Please consult your pension provider for more
details.

Who Provides the third party finance? 

We have relationships with several finance companies, Akira being one of them.  There is an 8.5% charge when using third party finance but this is more than covered by the employer’s 13.8% NI saving.

With third party finance, is the employer or employee responsible for the loan repayments?

Finance taken out with a third party is between the employer and the finance company and as such, the employer will repay
the loan. The employer recoups the money from reduced salary payments, minus the commission on the loan. The cost of the
loan is more than covered by the employer’s reduced National Insurance payments. The employer still saves money.

Akira can time their payments so they are due after the salary payment date.

Do I need to pay the bike shop a deposit?

The bike shop may wish to charge a deposit in order to secure the deal, however they should refund this back to you in the
event your organisation decides to not take part in the scheme. If you do proceed, the deposit will be refunded back to you
when you collect your bike. However, if the bike shop has had to place a special order for you, they may decide to withhold
the deposit in the event the deal does not go through. You should ensure both you and the shop are clear on this point.

I’m VAT registered. Can I reclaim the VAT on the voucher?

VAT has been payable by employees on salary sacrifice schemes since 2012. As a VAT registered business, you can either claim
the VAT back on day one and then at the end of the salary sacrifice issue an invoice to the employee for the gross amount of
salary sacrifice including VAT. This invoice is shown as paid via salary sacrifice, so the employee doesn’t pay twice (the salarysacrifice amount includes VAT). Or you can simply not claim back the VAT, making a note in your accounts to this effect. We
recommend the second method but either is fine. As long as the VAT is paid HMRC are happy.

Is my organisation already signed-up?

Your organisation does not need to be signed up for you to use Instant GCI. Instant GCI works on an individual basis, so as
long as your employer agrees to your request, you can go ahead. If they have already allowed other individuals to take part in
the scheme, it is likely that the scheme will be advertised internally on either staff noticeboards or the intranet.

For Corporate GCI, your organisation will have an GCI code which allows you to access the dedicated portal. Your HR
department or intranet will provide this.

We already have a cycle-to-work scheme, can we have GCI as well?

Yes, you can! Organisations can choose to run different cycle-to-work schemes at the same time. There are no rules that say
otherwise. Some clients use their current providers for traditional bikes under £1,000 and GCI for bikes over £1,000.

Please remember GCI does not charge a ‘sting-in-the-tail’ exit fee, unlike other schemes which charge up to 7% of the full value
of the bike. GCI ensures you get the full benefit of the tax-break from HMRC. After the free of charge extended loan period,
there is a nominal £1 fee to transfer title ownership of the bike.

Will it create lots of administration for my organisation?

No! GCI handles all the admin using standard templates for the Salary Sacrifice Agreement and the Hire Agreement which are
sent out electronically. Once those have been signed, GCI ensures all parties receive their copies and send out the voucher. For Corporate GCI customers, a scheme manager does need to be appointed to oversee the portal. The scheme manager sets
parameters, approves or reject applications, and checks their progress, informing staff of the status of the deal. But it’s not
overly onerous and shouldn’t take too much time away from other tasks.

What happens when an employee leaves their employment before they have repaid all the
money?

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 (before tax
is deducted). 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.

Are the bikes safe as an asset of GCI?

GCI is a social enterprise, whose constitution prevents it from taking on debt therefore it can never have creditors and cannot
become insolvent. This means the bikes are safe and will always end up with the employee. GCI is the only cycle-to-work
provider to offer this. In today’s retail environment this is a vital safeguard.

What is a pro-forma invoice?

The proforma is simply a quote and not binding on anyone unless it’s paid.

Can the employer pass on their National Insurance savings to the employee to enable them to
make even bigger savings?

Yes, we can facilitate this on our Instant GCI platform.  Prior to making payment for an Instant GCI application, the employer must confirm the percentage they will pass onto their employee. This should be done by email to theteam@greencommuteinitiative.uk stating both the employee and employer name as well as the percentage amount being passed on.

Employer’s National Insurance Contributions are currently 13.8%.  Therefore, the maximum amount that can be passed on is 13.8%.  Employers who take third party finance may want to pass on a lower amount to ensure the finance charge is covered.

Payment must be for the full bike package value and the Employer Invoice will reflect this.  The Salary Sacrifice Agreement will be adjusted to reflect the lower amount.  If the employer passes on the full NIC savings, employees on basic rate tax, will save at least 41.8%*.

* From 6th April 2024, due to a reduction in the National Insurance rate, the savings on the Cycle to Work Scheme for basic rate tax payers will reduce from 30% to 28%.

What is a framework agreement?

This is an agreement between a contracting authority and one or more of its suppliers. Its purpose is to establish the terms (e.g.
price) governing contracts to be awarded during a given period. Usually, framework agreements are compliant with all UK/EU
procurement legislation.

Typically, framework agreements are used by public-sector bodies such as health trusts and councils, and often they will be
shared with other public-sector bodies to appoint suppliers. This enables other organisations to avoid the tender process, thus
saving time and money. The maximum duration of a framework agreement is four years.

Green Commute Initiative is a supplier on the Crown Commercial Services – Employee Benefits and Services framework
(RM6273).

How to decide which cycle to work scheme to use?

There are numerous cycle to work providers available in the UK and you need to choose the one which meets your needs. If
your employees need cycles that are over £1,000, such as commuter-quality e-bikes, cargo bikes or specialist bikes for disabled
people, then Green Commute Initiative will be the obvious choice. GCI has no £1,000 limit and no scheme exit fees. This
means employees will benefit from the full tax saving applicable to them. GCI is also the only scheme set up as a not-for-profit
social enterprise whose constitution prevents it from taking on debt. Therefore, it can never have creditors and cannot
become insolvent. This means the bikes are safe and will always end up with the employee. No other provider can currently
offer this safeguard.

When is cycle to work day?

Cycle to work day takes place in August and although originally it was a marketing campaign developed by another cycle to
work provider, it has become an industry-recognised event. Here at GCI, we believe every working day should be a cycle to
work day! If your organisation would like to hold a GCI Awareness Day at your offices, the give us a call to put a date in the
diary.

ABOUT THE BIKE

Who owns the bike?

GCI owns the bike for the duration of the hire but we’re contractually obliged to hire it to you. At the end of the scheme you
will be offered an extended free loan. A part of the loan agreement is that GCI appoints you as our agent to dispose of the
bike to a third party of your choosing.

What if the bike is stolen?

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.

Can I inure a bike that doesn’t belong to me? 

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 towards the cover for your bike.  Get a quote.

What if the bike breaks down or needs repairs?

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.

Can I sell the bike?

Not until the end of the extended free loan period, unless we agree otherwise in writing.

Who else can ride the bike?

You can allow anyone over 14 years old to ride the bicycle, however you are still responsible for it.

Do l need to keep mileage records?

Currently, HMRC don’t require mileage records or any logs. However, please ensure the majority of use is for commuting.

Can I have more than one bike?

Providing your employer agrees, yes you can.

Can I buy a second-hand bike?

Yes, you can get a second-hand bike through the scheme as long as the retailer provides the bike with at least a 3-month
warranty. You can also buy an e-bike conversion kit to upgrade your normal pedal bike to an ebike.

Can I include accessories in my bike package?

Yes, your bike package can include accessories and a common sense approach should be taken when deciding what to
include. You can include items such as helmets, bells, lights, child safety seats, clothing, tools and spares. However, you
cannot include bike computers with or without GPS or waterproof clothing that is not reflective.

Can my bike package just include spare parts?

The Department for Transport guidelines state the cycle to work scheme is for the hire of a cycle for active travel and/or safety
equipment. Under the examples of safety equipment, it includes “replacement parts to keep a cycle roadworthy”. Therefore,
you are able to put through an order for just parts and accessories, as long as the total order value exceeds £100.

What is an E-bike conversion kit?

This enables you to upgrade any standard pedal bike to an electrically assisted pedal bike. The kits can be bought on the Cycle
to Work Scheme but only from resellers registered with GCI. The kit must adhere to EAPC regulations and have a maximum
power output of 250w. All conversion kits must include the battery and charger. These cannot be purchased separately.

The conversion kit will be hired to employee and will be listed on the Hire Agreement whilst the bike remains their property.

What if the shop I want to use isn’t signed up?

Most resellers (bike shops) are delighted to work with GCI because it’s a much better deal for them (and therefore you). Ask
them to get in touch to become a registered reseller.

At this time, we do not deal with Halfords, Cycle Republic or Wheelies because they only accept vouchers from the Halfords
scheme.