In a written statement from the Financial Secretary of the Treasury to parliament, it was announced that a temporary tax easement will be introduced on the cycle-to-work schemes.
The cycle-to-work schemes benefit from a tax exemption on bicycles and safety equipment provided to staff, on the provisions that they are used ‘mainly for qualifying journeys’ i.e. to and from work.
The government has acknowledged that coronavirus restrictions has meant that many employees have been required to work from home and therefore have not been able to make qualifying journeys to work. As a result, any equipment they received would not qualify under the tax exemption requirements and would therefore be liable for an income tax benefit-in-kind charge.
As a preventative measure, the government is temporarily changing the qualifying conditions to remove ‘qualifying journeys’ for employees who joined the scheme and received their cycling equipment on or before 20th December 2020.
Any employees that signed up for the scheme on or before 20th December 2020 will not be liable to pay an income tax benefit-in-kind charge.
This tax easement will remain until 5th April 2022.
