What are the Tax Exemption for Employee Bicycle Hire Scheme?

Q. I’m considering starting a scheme for my employees where they can hire a bicycle as an extra staff benefit. Will this be exempt from tax on employment income?

A: Yes, this new scheme you’re thinking of offering would be exempt if certain conditions are met. These are:

  • All staff are offered the chance to hire the bikes
  • Employees must use the bike primarily for what HMRC describes as ‘qualifying journeys’

It’s not just the hire of the bikes that counts within these rules; equipment is also allowed. As is providing a voucher for either hiring a bicycle or related equipment. Electrically assisted pedal cycles (EAPCs) are also covered by the exemption.