Produced by Tolley in association with Philip Rutherford
  • (Updated for Budget 2021)

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Bicycles
  • Introduction
  • Exemption for the loan of bicycles and safety equipment (known as Cycle to Work)
  • Mileage payments
  • Workplace facilities associated with the provision of the bicycles
  • Reporting requirements
  • Where the exemption applies to the loan or hire
  • Where the exemption does not apply to the loan or hire
  • Interaction with salary sacrifice
  • Transfer of ownership



There are a number of exemptions in place to cover the provision of bicycles and cycling equipment to employees. This guidance note covers the exemptions as well as instances where taxable benefits could arise for the provision of bicycles.

HMRC guidance is at EIM21664 onwards.

In addition, the provision of bicycles through an approved salary sacrifice arrangement remains a popular benefit for many employers. While the optional remuneration provisions in FA 2017 restricted salary sacrifice type arrangements for many benefits, bicycles were a notable exception.

Exemption for the loan of bicycles and safety equipment (known as Cycle to Work)

There is a general exemption from tax and reporting for the employer provision of bicycles and associated safety equipment. This is widely known as Cycle to Work or the Cycle to Work scheme, which refers to the combination of this exemption withsalary sacrifice. The general exemption at ITEPA 2003, s 244 covers only the use, loan or hire of the employer’s cycle and equipment. Therefore if an employer transfers ownership of the bicycle or equipment, a taxable benefit could arise. This is discussed in more detail below.

For the exemption to apply, the bicycles must be made available to all employees. An employer does not have to ensure that every employee actually receives a bicycle, only that the benefit is available to all employees. In order to meet this requirement, employers can choose to make use of such things as pooled cycles which are available to a number of employees. The employer should ensure that adequate numbers of bicycles are available to cover demand.

The bicycle which is being loaned or hired to the employee must be used primarily for qualifying journeys. Qualifying journeys are journeys between home and work, even if only part of the journey is carried out on the bicycle, eg to the local train station. A certain amount of private use of the bicycle is acceptable, eg at weekends or by members of the employee’s family.

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