Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will have discussions with (a) HMRC, (b) the Department for Infrastructure in Northern Ireland, (c) the Secretary of State for Transport, (d) Transport Scotland and (e) the Welsh Government on people excluded from the Cycle to Work Scheme.

The Cycle to Work scheme is a benefit-in-kind provided by employers to their employees. A benefit-in-kind is a form of non-cash remuneration provided by employers to their employees. Income tax and National Insurance contribution relief is provided on the scheme to both employers and their employees via salary sacrifice arrangements. The scheme is accessed via salary sacrifice, meaning that those not in employment are not able to access the scheme.

Employees earning at or near the National Minimum Wage (NMW) cannot access salary sacrifice if the arrangement will take their contractual salary below the relevant NMW rate. The Government is not currently considering changing the NMW legislation to apply to an employee’s salary after deductions have been made for salary sacrifice. Although employees on or near the NMW cannot access the tax deduction on the price of a bike via salary sacrifice, they can still lease a bike from their employer and repay the value of the bike from their net pay over many months, interest-free.