Cycling allowances

An employer cannot pay people to travel to and from work by bike. Or, rather, it can but any such payment would be viewed by the Inland Revenue as a salary increase and would be taxed accordingly. However, an employer may - and should - pay cyclists an allowance for business mileage. Cycling is a low-cost form of transport, but it certainly is not free. At the very least, cyclists should be compensated for the wear and tear to their bicycles.

The Government’s tax free cycling allowance is currently 20p per mile for business journeys made by bike. Higher mileage payments will be subject to tax. Nevertheless, many employers do pay a considerably higher mileage allowance and the money is an obvious inducement to travel by bike.

In addition, by signing up to the tax break “Cycle to Work” schemes, employees can gain a brand new bike and accessories at a large discount, which is another way of rewarding a fitter and more efficient workforce.

An alternative way of offering an incentive for cycle use is to ‘pay’ people in the form of extra time off. Several companies grant staff an extra five minutes holiday every time they cycle to work. It doesn’t sound a lot, but for regular cyclists it can amount to an extra two-and-a-half days’ leave each year.

Does your business actively promote cycling? If so, the GoCycle team would love to hear from you.