GCI cycle to work scheme

So I have a few questions about this scheme.

It appears to work in the basis that your employer pays 100% for the bike and you pay back in chunks off your salary however the final amount you pay is less beceause it's tax/vat free, usually saving around 40%. My question is does the employer have to pay for the missing 40% I saved on? I don't see my employer shelling out over 1k for a 4k carbon full sus..

Any advice would be helpful.


  • Under the implementation tab it says that the employer can reclaim tax? That means the employer won't lose out any money if the employee pays it back.
  • The Rookie
    The Rookie Posts: 27,812
    edited January 2020
    You don't 'pay it back' it's strictly a lease/hire scheme (so you don't own the bike) with some form of settlement at the end.

    It's a 'salary sacrifice' (also known as 'smart pay' or 'salary exchange') scheme which means the rental payments aren't classed as income so there is no Tax or NI to pay (nor do the employers have to pay employers NI of 12% so they profit from it).

    You save 42% if you're a higher rate tax payer, 32% if you're on basic rate or nothing at all if you don't pay tax. That saving's before whatever end of year 'fix' they apply to transfer ownership without a tax liability.

    In the case of GCI this is End of scheme arrangements
    We’ll make the employee a free loan of the bike
    and appoint them as our agent to dispose of it to
    a third party of their choosing. When they do they
    pay us £1.
    So there is no benefit in kind charge and no 7%
    end of scheme sting if you want to own the bike.
    But that sounds suspiciously like a Benefit in Kind if HMRC ever challenge it.

    You should read this on the specific GCI scheme.

    Full details
    Currently riding a Whyte T130C, X0 drivetrain, Magura Trail brakes converted to mixed wheel size (homebuilt wheels) with 140mm Fox 34 Rhythm and RP23 suspension. 12.2Kg.
  • Hmm cyclescheme seems to be clearer to understand and also state that the employer will gain back all of the money they spent to purchase the bike in the first place.