With the government strongly promoting active travel as a way to avoid public transport, and making £2bn of cash available to increase cycling infrastructure, it’s a great time to consider buying a bike to get to work on.
An outright purchase can be expensive, although many brands offer finance to spread the cost. But using a Cycle to Work scheme is a really good way both to spread the cost of the bike and to get significant savings – between 32 per cent and 47 per cent of the purchase price.
The Green Commute Initiative (or GCI) is a social enterprise that looks to deliver a more flexible, cost effective bike buying experience via more than 1,500 bike shops and direct sales brands while still providing the tax saving benefits of Cycle to Work.
What is the Green Commute Initiative?
The GCI is a Cycle to Work scheme that looks to avoid some of the constraints of other options. There's no £1,000 limit on spend, letting you buy a wide range of bikes. It also offers varying periods for repayment and doesn't charge end-of-term fees to own the bike.
Like other Cycle to Work schemes, GCI uses salary sacrifice, where the cost of the bike is deducted directly from your payslip over a number of months, saving both you and your employer income tax and National Insurance. See below for more details on how it works.
What is the Green Commute Initiative looking to achieve?
According to the scheme’s website: “Green Commute Initiative is a Social Enterprise with a vision to get commuters out of cars and onto any kind of bike, with the dual purpose of improving both the individual’s health and wellbeing, as well as reducing the environmental impact of pollution and congestion from cars. We do this through our cycle to work scheme.”
It continues: “We want more people on bikes. Why? Think of a world where there is less congestion, less pollution, less crowding on public transport and more car park spaces for motorists. A world where employees become healthier, happier and more effective.”
What types of bikes does the Green Commute Initiative cover?
Anything, if it’s legally designated as a bike. So that includes not just road bikes, folding bikes and hybrids, but also ebikes, mountain bikes, gravel bikes, cargo bikes and specialist bikes too.
The Green Commute Initiative puts a lot of emphasis on electric bikes for their extra push over hills and on longer rides, as well as their commuter-friendly aspect. It points out that you can wear your work clothes, because you’re not going to get as warm when riding, and you’ll not be constrained by train and bus timetables, social distancing and delays.
How is GCI different from other Cycle to Work schemes?
The original Cycle to Work schemes had an upper limit of £1,000 for the spend allowed. If you were starting from scratch and wanted other kit, such as lights, a helmet, tools and a waterproof jacket, that meant your remaining allowance limited you to fairly low-end machines.
New Cycle to Work government guidance was issued in June 2019 to make it easier for employers to provide bicycles and equipment above £1,000, providing the requisite Financial Conduct Authority is obtained. Otherwise, the limit remains at £1,000. Employers may also choose to impose their own limit.
The Green Commute Initiative is regulated by the Financial Conduct Authority so there's no £1,000 price cap. That lets you eye up pricier options such as flashier road bikes and Brompton folders. It also puts ebikes, most of which come in at over £1,000, within your reach. For people with disabilities or mobility issues, the scheme can be used for specialist or adapted bikes too.
Don’t go overboard though, GCI has a £10,000 upper limit and may veto a pricey package. It’s also worth buying insurance because you’ll still be liable for payments if the bike is damaged or stolen.
Unlike some other schemes, there are no exit fees if you want to own the bike (apart from a £1 charge to satisfy tax requirements). For example, CycleScheme charges you seven per cent of the bike’s cost price after three years to take over ownership.
How does the Green Commute Initiative work?
GCI has its own Financial Conduct Authority licence, which lets it offer credit above £1,000.
Technically, you’re hiring the bike from GCI for the term of the agreement, when ownership is then passed from GCI to the rider. GCI says that its scheme has been vetted by a ‘big four’ accountancy firm and found to be compliant with HMRC rules.
It says that with salary sacrifice, savings on the price of a bike could be as much as 47 per cent and that it doesn’t charge exit fees at the end of the agreement.
As well as the bike itself, like other Cycle to Work schemes, you can add accessories and other kit you need.
How do you apply for the Green Commute Initiative?
First you need to go and talk to your bike retailer and work out the package of bike and kit you want and its price.
If your employer isn’t registered with GCI, you use the online Instant GCI form to generate a pro forma invoice for the package, which you need to give to your HR department.
Some employers, typically those with over 1,000 staff, are registered with GCI already, in which case there’s a separate Corporate GCI page which routes your request directly to your HR department.
You’ll get a salary sacrifice agreement and a hire agreement to e-sign. Once this is done, GCI pays the retailer and emails you a voucher, which you take to the store along with photo ID to collect the bike.
What’s the benefit?
The employer pays GCI to cover the cost of your voucher, then deducts the cost of the bike and kit from your gross salary, usually over 12, 18 or 24 months, saving you income tax and National Insurance.
Dependent on your tax rate, that can be either 32 per cent, 42 per cent or 47 per cent of the list price of the bike and kit. Some employers may charge you interest on the loan, reducing the amount you’ll save.
There’s also a financial benefit for your employer, who will usually save on Employer’s National Insurance Contributions.
If you want to keep the bike, there’s a further free-of-charge loan agreement made between you and CGI taking you to six years of riding, at the end of which you can take ownership yourself for a £1 fee. That’s an arrangement designed to satisfy HMRC’s tax requirements.
How many bike shops are signed up to GCI?
GCI says you can use one of more than 1,300 bike shops across the UK, from local bike shops to multi-chain retailers.
There’s a pretty good spread, with the map of retailers online showing shops from Penzance to Stornoway, as well as retailers in Northern Ireland and the Isle of Man.
Use the shop finder on the Green Commute Initiative website to find a registered bike shop near you.
Can I use GCI to buy from a direct sales brand?
Yes, a fair number of direct sales brands have signed up with GCI.
That includes heavy-hitters such as Canyon, YT Industries and Ribble, as well as niche brands including Mason Cycles and Temple Cycles. There are also direct sales ebike specialists represented, such as VanMoof and Cowboy.
There’s a list of available direct sales brands on the GCI site. To order from a direct sales brand, you first need to get them to supply a quote for your preferred ride or register an order. You then apply to GCI for finance, quoting the maker’s order reference number.
