Cycle to Work scheme guidance to allow accessories-only packages

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Good news for those of you that like to get cheap cycling kit – that's all of you, right? HMRC have changed the rules of Cycle to Work so that it's now possible to get just bike accessories on your agreement. That means that if you got a bike last year through the scheme, from 1 March you can use any subsequent contract to buy other stuff to go with it.

By 'other stuff' we specifically mean 'safety equipment', which HMRC doesn't exactly go out of its way to clarify. Generally you're okay if you go for helmets, lights, locks, bells, pumps, dynamo systems, mirrors, mudguards, cycle clips, bags, puncture repair kits, multi-tools, reflective clothing and reflectors for your bike. Child seats are premitted too, but tagalongs and buggies are not.

You can get a new Cycle to Work agreement every year, and assuming your employer doesn't have their own consumer credit licence you'll be limited to a spend of £1,000. You pay for the bike or equipment through salary sacrifice, generally over 12 months, and you save on income tax and National Insurance on the payments. At the end of the scheme the bike is yours for a Market Value payment, although many providers extend the hire through a separate agreement for a further couple of years to take advantage of the much lower Market Value rates for older bikes (3% for bikes under £500 and 7% for more expensive bikes). The £1,000 limit applies to equipment-only agreements too, with a £100 minimum. The Market Value of safety equipment follows the same rules as for bicycles.

Cyclescheme have found that 80% of people who take out an agreement only do it once; that's not surprising, as most people wouldn't want a new bike every year, but they're hoping that the new guidelines will see a big increase in repeat business. "Offering participants the chance to obtain safety equipment only allows those 80% to re-enter the scheme to obtain all the essential kit they need – or perhaps missed off on their original application – for their commute," said Cyclescheme director Daniel Gillborn. "Giving participants the tools to be able to cycle more frequently and confidently is an important message and one that safety equipment only packages will help reinforce. In turn, this will help to ensure participants have a safe, comfortable and enjoyable commute."