How it works with CycleScheme
Cyclescheme are one of the biggest Cycle to Work scheme providers.
For a quick overview of how to apply through Cyclescheme, watch this video.
Below is a run down of exactly how it works with Cyclescheme and the FLIT-16.
Recent change of rules (and removal of £1,000 limit!)
As mentioned above, as of October 2019 Cyclescheme have lifted the £1,000 spend limit that was previously in place. This is because the Department for Transport recently updated their rules so that employees can request to buy cycle equipment, with no maximum value, through Cycle to Work.
Previously, your employer would technically own the bike, and you would be hiring it from them. You could do this because the Financial Conduct Authority (FCA) allowed employees to loan cycling equipment worth up to £1,000.
Since the rules have changed, Cyclescheme, like the GCI, now have their own FCA Authorisation. This means that it is Cyclescheme that you are hiring the bike off, instead of your employer (similar to the GCI).
You can read all about the changes here.
1. Pre-order your FLIT-16 (if you haven't already!): your payment acts as a deposit
If you haven't already, pre-order your FLIT-16. The amount that you pay for the bike effectively acts as a deposit for the bike.
2. Your employer buys your FLIT-16 through Cyclescheme
As soon as the bike is ready for delivery, it becomes eligible for the Cycle to Work Scheme. At this point, you need to apply to Cyclescheme for the value of the amount that you paid plus the 12.5% Cyclescheme fee (e.g. if you pre-ordered you FLIT-16 for £1,500 you'd apply for the value of £1,500 + 12.5% Cyclescheme fee = £1,687.50).
Your employer and Cyclescheme will then review your application and pay us for your FLIT-16.
3. Receive your refund from FLIT for your 'deposit'
Once we've received payment from your employer, we'll refund the original amount you paid during our pre-order campaign.
4. Start your monthly repayments (TAX FREE!)
Here's when you start saving! Once your bike has been delivered, you'll start your monthly repayments to your employer. This is the same as the GCI in that it is a salary sacrifice scheme, so the monthly payments are deducted from your salary before tax.
With Cyclescheme, your repayment period is one year. Again, similar to the GCI, this year is effectively a 'rental period'.
What happens after the one year 'rental period'?
So, this is where it's slightly different to the GCI initiative. With Cyclescheme, at the end of your one year rental period they will get in touch with you to discuss your options. Basically, you have three to choose from:
1. Own it later -
You pay a small refundable deposit (either 3% or 7% of your certificate value) and continue to use the equipment for 3 years. No other payments (whatsoever) are required during this time. At the end of the 'Own it later' period, no further action or payment is required if you wish to keep your FLIT-16 - we simply retain your deposit and transfer ownership to you. Cyclescheme refunds the deposit if you do not wish to keep your ebike.
2. Own it now -
Take ownership of your FLIT-16 by paying Cyclescheme the market value (e.g. for a one-year-old package this would be 18% or 25% of the value of the FLIT-16 in accordance with HMRC requirements).
3. Return -
Return your FLIT-16 to Cyclescheme at your own cost and pay no ownership fee.