Minister disappointed in delay to Civil Service Cycle to Work Scheme

Regional Development Minister, Conor Murphy, today restated his commitment to promoting cycling in the North.

This is in spite of a recent setback in introducing a Cycle to Work Scheme for employees in the Civil Service, following new HMRC guidance and a recent European Court Judgement on salary sacrifice schemes.

Minister Murphy said: “Cycling is a healthy, sustainable way to travel and is an excellent choice for staff to commute to and from work, at least some of the time. I am disappointed that following new guidance on salary sacrifice schemes and the European Court judgement, the introduction of the Civil Service Cycle to Work Scheme, which my Department has successfully piloted, will now be delayed and cannot be introduced across all Departments in September, as had been intended.

“DFP will now examine the implications, and give further consideration to the proposed NICS Cycle to Work scheme in light of the recent revised guidance on the fair market value at the end of all cycle to work schemes, and the potential effect of a recent European Court Judgement on salary sacrifice schemes.

“The tax-friendly Cycle to Work Scheme has already proved beneficial to many employers and employees here, and I remain hopeful that the scheme for civil servants in the North will proceed, as soon as all outstanding issues have been clarified and resolved.”

Civil servants were informed of the position today through the internal HR system by the Department of Finance and Personnel.

Notes to editors:

1. The Cycle to Work Scheme aims to promote the sustainable travel agenda, support healthier journeys to work, and to reduce environmental pollution. Government introduced an annual tax exemption some years ago, which allows employers to loan cycles and cyclists’ safety equipment to employees as tax-free benefits. For more information visit the Cycle to Work Scheme page.
2. HMRC recently issued guidance on the “fair market value” that employers should apply when valuing cycles for sale to employees once the hire agreements have ended. For HMRC guidance see the HMRC website.
3. A recent European Court of Justice ruling in the case of Astra Zeneca (C-40/09) v HMRC, concluded that VAT was payable in respect of retail vouchers provided to employees under a flexible salary package scheme. HMRC are currently considering whether the EC decision has wider implications for salary sacrifice schemes, including the Cycle to Work Scheme.
4. All media queries to Department for Regional Development Press Office, 028 9054 0372. Out of office hours please contact the duty press officer via pager number 07699715440 and your call will be returned.