The recent increase in National Insurance Contributions means there are even bigger savings on the Cycle to Work Scheme. This is great news especially during the cost-of-living crisis.
This government backed scheme essentially gives you a tax break on the amount you wish to spend on a bicycle. The tax break combines the amount you pay in Income Tax and National Insurance Contributions. As National Insurance Contributions have risen by 1.25%, the savings on the scheme have increased.
The amount you can save is shown below (rates in Scotland will vary):
Basic rate tax payers: 33.25%
Higher rate tax payers: 43.25%
Additional rate tax payers: 48.25%
Why not take a look at our savings calculator?
On a bike costing £2,500, a basic rate tax payer will save £831. This represents a third off the price. If the salary sacrifice is spread over 24 months, the monthly net deduction would be £70. That works out to just over £3 per working day. Now that’s a benefit worth using!
Using the Cycle to Work Scheme to get your next bike is really easy. It’s good to know during this cost-of-living crisis that the salary sacrifice payments are totally interest-free. Also, there’s no requirement for a check on your credit history. It really is time to ditch expensive, planet polluting cars for the humble bike. When more people cycle for short journeys, everyone wins.
Photo credit to #BikeisBest