Section 244 ITEPA 2003 removes the income tax charge, and by corresponding provision the National Insurance charge, that would otherwise arise when an employer provides an employee with a cycle or cyclist's safety equipment. The exemption applies where three conditions are met:

• there is no transfer of property in the cycle or equipment to the employee during the hire;
• the employee uses the cycle or equipment mainly for qualifying journeys; and
• cycles or cyclist's safety equipment are made available generally to the employer's employees.

As you will see from this list, salary sacrifice, while the most frequently used funding option, is not one of the requirements of the exemption, which is a common misconception.

The meaning of "cycle" is set by reference to section 192(1) of the Road Traffic Act 1988: "a bicycle, a tricycle, or a cycle having four or more wheels, not being in any case a motor vehicle." Electrically assisted pedal cycles fall within that definition where they meet the electric bike rules (a motor of no more than 250W, assistance only while pedalling, and the assistance cutting out at 15.5mph), as do adapted cycles for disabled riders, cargo cycles and folding bikes.

Law, HMRC guidance and the DfT booklet

Three tiers of source come up repeatedly in questions about compliance, and they do not carry equal weight.

The first is legislation: section 244 ITEPA 2003, the Consumer Credit Act 1974, the Financial Services and Markets Act 2000 (FSMA) and the orders made under it. This is the prime source of what is correct; where any guidance and the legislation diverge, the legislation is what a court or tribunal applies.

The second is HMRC's own published guidance, principally the Employment Income Manual. It is not law, but it is HMRC's statement of how it applies the law, and under the doctrine of legitimate expectation (R v IRC, ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545, applied to HMRC's published guidance in R (Davies) v HMRC [2011] UKSC 47) taxpayers can generally rely on clear, unqualified guidance. As such, where it speaks specifically to Cycle to Work, it should be treated as close to law.

The third is guidance material, notably the Department for Transport's Cycle to Work Scheme Guidance for Employers (June 2019), published jointly by the DfT, HM Treasury, HMRC and the Financial Conduct Authority (FCA). It describes paths through the rules that are uncontroversially compliant, but it is written at a general level, and on salary sacrifice it describes how salary sacrifice works across benefits generally rather than for Cycle to Work specifically. Where it differs from HMRC’s specific guidance on Cycle to Work and salary sacrifice, HMRC’s guidance is the one to rely on.

The three arrangements in every scheme

Every compliant scheme contains three distinct legal arrangements: the salary sacrifice arrangement between the employee and the employer, which varies the employment contract; the hire agreement, which the employer or a third-party scheme provider enters into with the employee as owner, and to which the section 244 conditions attach; and the arrangements by which the cycle is sourced and funded. The party acting as owner need not hold title to the cycle itself, which may sit with a funder. What matters is that title never sits with the employee: if the employee buys the cycle and is reimbursed through salary sacrifice, there is nothing for section 244 to exempt. The salary sacrifice funds the hire, but the three are separate legal events, and treating them as one transaction is a common source of error.

Two levels of compliance: the scheme and each agreement

Compliance operates at two levels, and the distinction determines what a failure costs.

Scheme-level conditions

These are met, or not, for the scheme as a whole. They include general availability, the form of the template hire agreement (i.e. no mechanism for ownership to pass, and compliance with the Consumer Credit Act 1974), the owner's FCA authorisation or exemption, and the employer's position on credit broking (the last two are covered below). A failure at this level is highly consequential, and affects every single hire underneath it. If the scheme is not generally available, the exemption is lost on every hire. If the agreement form provides for ownership to pass, every hire made on it is outside section 244. If the owner or the employer is carrying on a regulated activity without authorisation, every agreement is exposed.

Agreement-level conditions

These turn on what happens under each individual hire: whether the employee uses the cycle mainly for qualifying journeys, whether the items hired are cycles or cyclist's safety equipment, and whether the employee keeps the cycle rather than selling or passing it on. A failure at this level affects the validity of the salary sacrifice processed for that employee, because the exemption does not apply to their hire. The compliance of the scheme, and of every other employee's hire, however, is unaffected.

How they combine

This is why responsibility is divided as it is. The employer, working with the provider, owns the scheme-level conditions, where a single failure is multiplied across the workforce. Employees entering into the scheme trust their employer to meet these obligations. Similarly, the employee owns the agreement-level conditions, which the employer trusts them to keep.

Because section 244 exempts the provision of a cycle and not its sale, every compliant scheme runs on a hire agreement and not a hire-purchase agreement. A hire-purchase agreement contains a built-in mechanism for ownership to pass, and so falls outside the exemption from the outset. The hire agreement cannot contain any mechanism for the employee to acquire the cycle, and ownership cannot be promised, or even implied, at the outset.

Because the same form of hire agreement is normally used for every hire in a scheme, a defect in that form, such as a provision for ownership to pass, is a scheme-level failure. It takes every hire made on that form outside section 244.

Ownership may pass at the end of the hire, but only under a separate agreement made at that time. HMRC's simplified valuation table at EIM21667A treats the value of a cycle as negligible once it is six years old, whatever its original price. One approach used in practice, including by us, is a free extended-use agreement until the cycle is six years old, after which ownership passes to the employee as a gift, with nothing to pay and no tax due.

During the hire, the cycle is not the employee's. The employee's side of this condition is that they do not sell it, give it away or pass it on. A breach by one employee affects that employee's hire only.

The scheme must be available generally

Section 244 requires that cycles or cyclist's safety equipment are made available generally to the employer's employees. HMRC's guidance at EIM21665 explains which exclusions of employees are compatible with this condition. A scheme offered only to directors, or to a favoured group, would fail it, and with it every hire in the scheme. This is the clearest example of a scheme-level condition, and it sits with the employer.

General availability does not mean that every employee must use the same route. Salary sacrifice is the usual one, but an employee whose pay is too close to the National Minimum Wage to sacrifice any of it can be offered the same hire funded from net pay, or access to pool bikes they can book. The condition is about the availability of employer-provided cycle use, not about a single payroll mechanism.

Qualifying journeys and the main-use test

The cycle must be used mainly for qualifying journeys. Section 244 does not define the term. HMRC's guidance at EIM21664 states that it "means the same as for the works bus exemption", and refers to EIM21850. Qualifying journeys broadly cover:

• journeys between home and a workplace, including journeys made only partly by cycle, such as cycling to a station;
• journeys between workplaces; and
• on a working day, journeys between the workplace and shops or other amenities, where the distance is no more than 10 miles one-way.

"Mainly" means more than half of the use. Weekend, leisure and family riding are permitted provided they are not the main use. The test is the same for hybrid and remote workers: where home is a workplace, a working-day journey from home to local shops can qualify. These points are set out in full in our article on Qualifying Journeys under the Cycle to Work scheme.

The employee does not have to prove that the test is met, and HMRC does not expect anyone else to check. EIM21664 states:

"Employees are not expected to keep detailed records of time spent cycling or miles travelled for the purpose of this 'main use' test. Accept that the test is satisfied unless there is clear evidence to suggest that less than half of the use of the cycle or equipment is on qualifying journeys. If it is clear that there is substantial use of the cycle for qualifying journeys, do not make special enquiries about the extent of any other use."

No employer, provider or retailer can observe how a cycle is ridden, and HMRC's guidance does not ask them to. The employee's declaration is the control by design, which is why it has to be made, and honoured, in good faith. The main-use test is an agreement-level condition: if one employee does not use their cycle mainly for qualifying journeys, it affects the validity of the salary sacrifice processed for that individual employee, not the compliance of the overall scheme.

Only cycles and cyclist's safety equipment qualify

Section 244 covers "a cycle or cyclist's safety equipment", and nothing else. "Cyclist's safety equipment" is not defined in legislation. EIM21664 states that "a common sense approach should be taken when deciding what falls within this description", and gives examples. Cycle helmets conforming to EN 1078, bells, bulb horns, lights including dynamo packs, child safety seats, reflective clothing, white front reflectors and spoke reflectors count. A cycle computer, waterproof clothing that is not reflective clothing, and cycle training do not.

Read together, the examples point to a principle: what qualifies an item is its characteristics, not what it is marketed for or who it is aimed at. Reflective clothing counts while non-reflective waterproofs do not, so the attribute that matters is visibility, not whether the item was designed for cycling. On that basis, reflective running leggings qualify. They are sold for running, not cycling, but they are reasonable to wear on a bike and they make the rider more visible in low light, which is the quality HMRC's examples turn on. A cycle computer is the opposite case: it is made for cyclists, but its function is performance data, not safety, so it does not qualify, however useful it may be on a commute. It is these lists of included and excluded items, and the inferences that can be drawn from both, that inform our view of what can and can't be obtained through the scheme.

Most schemes are funded by salary sacrifice. The salary given up is never paid to the employee, so income tax and employee National Insurance do not arise on it, and the employer does not pay employer's National Insurance, currently 15% (HMRC rates and thresholds for employers 2026 to 2027). As a broad guide, the employee's saving is around 28% for a basic-rate taxpayer, 42% for a higher-rate taxpayer and 47% for an additional-rate taxpayer, depending on their individual circumstances.

The 2017 reforms to optional remuneration arrangements removed the tax advantages from most benefits provided through salary sacrifice, but left Cycle to Work unaffected. Section 244 is one of a short list of "excluded exemptions" under section 228A ITEPA 2003, and HMRC's guidance at EIM44131 states that, even when provided under optional remuneration arrangements, "the benefit remains exempt provided it satisfies the qualifying conditions of the particular exemption."

There is no minimum hire period. The DfT booklet states that "the salary sacrifice arrangement is typically for at least 12 months" (paragraph 4.5), but that convention comes from the "money's worth" doctrine in Heaton v Bell, as applied to salary sacrifice generally. HMRC's guidance at EIM42755 lists the provision of cycles under section 244 among benefits that are "not chargeable to income tax", which it describes as "much wider than simply being exempt under the benefits code", so the doctrine has nothing to apply to. Section 244 itself sets no minimum period.

The one hard limit is the National Minimum Wage and National Living Wage. HMRC's guidance on salary sacrifice for employers states that a salary sacrifice arrangement "must not reduce an employee's cash earnings below the National Minimum Wage". This is measured against actual earnings in each pay reference period. Where a sacrifice would breach it, the sacrifice must be reduced, paused or stopped for that period. This does not mean the employee has to return the cycle. The hire continues, and the payments can instead be taken from the employee's take-home pay or paid by them directly. Because these payments come from taxed income, the employee does not receive the tax saving on them. Where an employee is being paid statutory pay (SSP, SMP, SPP, etc.) only, salary sacrifice cannot reduce it, and net deductions need great care, so in practice payments are usually paused.

VAT

Contrary to some perceptions, Cycle to Work does not deliver a VAT saving. The saving is income tax and National Insurance on the sacrificed salary. VAT must still be accounted for correctly.

Following the decision of the Court of Justice of the European Union in AstraZeneca UK Ltd v HMRC (Case C-40/09), salary given up is consideration for the benefit. HMRC's guidance at VATSC05880 states that "the remuneration an employee forgoes is consideration for the taxable benefits provided", and VATSC05881 confirms that, under the Cycle to Work scheme, employers "must account for output tax based on the value of the salary foregone". The employer therefore accounts for output VAT on the salary sacrificed, treated as VAT-inclusive at the applicable rate, and recovers the input VAT on the hire charge or the cost of purchasing the item. Where the salary sacrifice equals the hire charge, the two cancel each other out.

The same applies to VAT-exempt and partially exempt employers, such as banks, insurers, charities and education providers. The input VAT is directly attributable to the onward taxable supply to the employee, so under section 26 of the Value Added Tax Act 1994 it is recoverable in full. This is another source of misconception.

Consumer credit regulation and the £1,000 threshold

HMRC compliance is only part of the picture. A Cycle to Work hire agreement is a regulated consumer hire agreement under the Consumer Credit Act 1974, so a scheme can satisfy section 244 and still be unlawful if the hire side is wrong.

Entering into a regulated consumer hire agreement as owner is a regulated activity under article 60N of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Whoever enters into the hire agreement as owner must therefore ensure that it complies and, in most cases, be authorised by the FCA. There is an exemption to this, at paragraph 53 of the Schedule to the FSMA (Exemption) Order 2001, however it is narrow: it applies only where the employer itself is the owner, the goods hired do not exceed £1,000 in value, the scheme is designed to use section 244, and it is operated in line with the Secretary of State's guidance.

This is one origin of the "£1,000 limit". It is not a cap on the value of a cycle. Schemes above £1,000 are lawful where the owner is FCA-authorised.

Credit broking: the employer's role in a third-party scheme

Where a third-party provider, rather than the employer, acts as owner, a second regulated activity comes into view. Under article 36A of the Regulated Activities Order, credit broking includes effecting an introduction of an individual who wishes to enter into a consumer hire agreement to a person who enters into regulated consumer hire agreements as owner, by way of business. In a third-party scheme the employer is involved in bringing its employees to the provider, so the question is whether that involvement amounts to effecting an introduction.

Effecting an introduction in the regulated sense requires more than connecting two parties who go on to contract. It involves active steps, such as inducing, recommending, or matching a particular employee with a particular agreement. Choosing a provider as a procurement decision, hosting factual information about the scheme, and approving orders for payroll purposes are different in kind, and a scheme can be structured so that the employer's role stays within them.

The consequences of non-compliance, however, are serious, both for the employer and for the hire agreements made through it.

Credit broking is therefore a scheme-level risk: if the employer's role crosses the line, the problem is not confined to a single agreement.

For that reason, we take deliberate steps in how our scheme is structured and run in an effort to keep the employer's role clear of credit broking, and we work with employers to keep it that way.

The key message is that compliance in this context, like many others, is shared. Whoever operates the scheme, each party takes on obligations when it joins, and the scheme is only compliant if all of them are kept.

Not every obligation works in the same way, however. Some are preconditions that simply have to be set up correctly and can be checked: the form of the hire agreement, the owner's FCA authorisation, the payroll treatment of the sacrifice and the VAT accounting. Others depend on one party trusting another to keep obligations it cannot observe directly over time.

From the employee's perspective, there is trust that the employer is making the scheme generally available. If it is not, the condition fails for the scheme as a whole, and every employee loses the tax saving on their hire.

From the employer's perspective, there is trust that each employee is using their cycle mainly for qualifying journeys, and is not trying to circumvent the rules to obtain items that do not qualify. HMRC's guidance takes the same approach, accepting the employee's main use without records or special enquiries unless there is clear evidence otherwise. A breach by an employee does not affect the compliance of the overall scheme, but it does affect the validity of the salary sacrifice processed for that employee.

The employer

The employer is responsible for making the scheme available generally to employees (section 244), for ensuring that salary sacrifice never takes pay below the National Minimum Wage or National Living Wage (National Minimum Wage Act 1998), for accounting for output VAT on the salary sacrificed (Value Added Tax Act 1994; VATSC05880), and, where a third-party provider acts as owner, for keeping its role in the scheme within the limits that keep it outside credit broking (article 36A of the Regulated Activities Order).

The scheme provider

Where a third-party provider acts as owner, it is responsible for issuing a hire agreement that complies with the Consumer Credit Act 1974 and contains no mechanism for ownership to pass, for holding FCA authorisation under the Financial Services and Markets Act 2000, and for offering only cycles and cyclist's safety equipment.

The employee

The employee is entrusted with responsibility for not selling or passing on the cycle during the hire, for taking only eligible items, and for using the cycle mainly for qualifying journeys (section 244; EIM21664). That includes not seeking to obtain an ineligible item under the scheme by having it described as something else.

How far a scheme relies on good faith for item eligibility depends partly on its design. In a voucher-based scheme, the employee takes a voucher to a retailer and the retailer supplies the goods. The employer sees the value of the voucher, not what left the shop. An employee could ask a retailer to ring a cycle computer through the till as a bike, and the employer would have no evidence of it. In a scheme where each item is ordered as a specific product from a catalogue and approved by the employer before it is supplied, eligibility is checked before the order is placed, and an ineligible item cannot be ordered at all. This is the model we operate. In either case, an item that falls outside section 244 is not covered by the exemption.

Is there such a thing as an "HMRC-approved" scheme?

Cycle to Work schemes are sometimes described as "HMRC-approved", yet there is no approval process behind that description. Section 244 is an exemption that applies automatically wherever its conditions are met, so there is nothing to apply for. In fact, the DfT guidance booklet explicitly addresses this question: asked "Do HMRC need to authorise the scheme?", it answers that "Cycle to Work schemes do not need approval from HMRC."

Nor for that matter does HMRC offer to confirm that a scheme is compliant. Its Non-Statutory Clearance Service guidance states that "HMRC does not provide a 'confirmation service'" and that "requests for reassurance or confirmation that your position is correct will not be accepted". It also states that HMRC will not "'approve' tax planning products or arrangements", and will not give a clearance "on matters of fact". A clearance is available only where there is genuine uncertainty about how the legislation applies.

Even where a clearance is given, its reach is limited in ways that make it incapable of certifying a scheme as compliant. It "applies only to the customer it was issued to", so a clearance obtained by a provider would not extend to the employers using its scheme, and it is the employer that provides the benefit and must report it if the conditions are not met. And it can be relied on only if the information supplied was accurate and complete and the transactions are carried out "exactly as you describe them".

That last point is the crux of the matter. Compliance depends in large part on events that have not yet happened and are outside the scheme operator's control: whether each employer makes the scheme generally available, whether each employee uses their cycle mainly for qualifying journeys, whether each item supplied is eligible, and whether each pay period's sacrifice respects the National Minimum Wage. At most, HMRC could express a view on a scheme-level design, such as the form of the hire agreement. It could not confirm in advance that every hire under a scheme will comply.

For these reasons, where "HMRC-approved" is used, it should be interpreted to mean something narrower: that the scheme relies on a statutory exemption HMRC administers, or that it uses a methodology HMRC has published, such as the simplified valuation table at EIM21667A. None of these is an approval of the scheme's compliance and it should not be taken as such.

The same is true of claims that a provider is "HMRC compliant", or that it guarantees compliance with HMRC. The obligations that determine HMRC compliance sit with the employer and the employee. The employer operates the salary sacrifice through payroll within the National Minimum Wage, makes the scheme generally available, accounts for output VAT on the salary sacrificed, and reports a benefit in kind if the conditions are not met. The employee uses the cycle mainly for qualifying journeys and takes only eligible items. Where something goes wrong, whether an ineligible item is supplied or ownership is transferred below market value at the end of the hire, the tax consequences land on the employer and the employee. A guarantee of HMRC compliance is therefore a guarantee about consequences the provider does not bear, covering compliance it cannot deliver on the employer's behalf.

We encounter this misunderstanding regularly, from small employers to some of the UK's largest, including many that have run the scheme for decades. It most often surfaces when we are asked to guarantee or take compliance responsibilities in areas the scheme's design places with the employer alone. Declining to do so is not a provider avoiding responsibility; it reflects where the law places it, and no provider’s guarantee can move it.

The distinction being drawn in this section is not merely one of wording. Under paragraph 4 of Schedule 20 to the Digital Markets, Competition and Consumers Act 2024, in force since 6 April 2025, claiming that a trader or product "has been approved, endorsed or authorised by a public or private body" when the claim is false is a commercial practice that is unfair in all circumstances.

An HMRC compliant Cycle to Work scheme is one that meets the three conditions of section 244 ITEPA 2003. The cycle or equipment is hired and not sold, with any transfer of ownership made under a separate agreement after the hire. It is used mainly for qualifying journeys, judged by actual use and accepted unless there is clear evidence otherwise. And it is made available generally to employees, by whatever funding route suits each of them.

Around those conditions sit the rules that make a scheme work in practice. Salary sacrifice for Cycle to Work survived the 2017 reforms as an excluded exemption, carries no 12-month minimum, and is limited only by the National Minimum Wage. VAT is accounted for on the salary sacrificed, with no saving and, for most employers, no cost. The hire agreement is a regulated consumer hire agreement, and the "£1,000 limit" is a threshold for an FCA exemption rather than a cap on the scheme. Where a third-party provider acts as owner, the employer's role must also stay outside credit broking.

Compliance is therefore less a matter of following one prescribed model than of meeting a small number of clear conditions, each of which falls to a particular party to keep. Those at the level of the scheme fall to the employer and the provider, and a failure there affects every hire. Those at the level of each agreement fall to the employee, and a failure there affects that hire alone. Some of those conditions are preconditions that simply have to be set up correctly; others depend on one party trusting another to keep obligations it cannot see, which is how the scheme was designed and how HMRC applies it. It is also why no scheme can be "approved" by HMRC in advance: compliance is not a fixed state but a continuing one, renewed at every hire, every payroll run and every journey; something earned, but not bestowed, certified or foretold.

None of this needs to be onerous. Most of the conditions are settled once, when the scheme is set up, and the rest sit within processes an employer already runs, such as payroll, or rest on declarations employees make when they join. What matters is that each party knows which conditions are theirs. A good provider will raise these points at the outset, make sure you have given them proper attention, and run the scheme so that keeping them takes little effort. A provider that skips over them, focused only on getting you signed up and your employees spending, is not helping you mitigate risk; it is silently leaving that risk with you.

References

Legislation

• Consumer Credit Act 1974. Available at: https://www.legislation.gov.uk/ukpga/1974/39/contents (Accessed: 5 November 2026).
• Digital Markets, Competition and Consumers Act 2024, Sch. 20, para. 4. Available at: https://www.legislation.gov.uk/ukpga/2024/13/schedule/20 (Accessed: 6 November 2026).
• Financial Services and Markets Act 2000. Available at: https://www.legislation.gov.uk/ukpga/2000/8/contents (Accessed: 5 November 2026).
• Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201), Schedule, para. 53. Available at: https://www.legislation.gov.uk/uksi/2001/1201/contents (Accessed: 5 November 2026).
• Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544), art. 60N. Available at: https://www.legislation.gov.uk/uksi/2001/544/contents (Accessed: 5 November 2026).
• Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544), art. 36A. Available at: https://www.legislation.gov.uk/uksi/2001/544/article/36A (Accessed: 6 November 2026).
• Income Tax (Earnings and Pensions) Act 2003, s. 228A. Available at: https://www.legislation.gov.uk/ukpga/2003/1/section/228A (Accessed: 5 November 2026).
• Income Tax (Earnings and Pensions) Act 2003, s. 242. Available at: https://www.legislation.gov.uk/ukpga/2003/1/section/242 (Accessed: 5 November 2026).
• Income Tax (Earnings and Pensions) Act 2003, s. 244. Available at: https://www.legislation.gov.uk/ukpga/2003/1/section/244 (Accessed: 5 November 2026).
• Income Tax (Exemption of Minor Benefits) Regulations 2002 (SI 2002/205), reg. 4. Available at: https://www.legislation.gov.uk/uksi/2002/205/made (Accessed: 5 November 2026).
• National Minimum Wage Act 1998. Available at: https://www.legislation.gov.uk/ukpga/1998/39/contents (Accessed: 5 November 2026).
• Road Traffic Act 1988, s. 192. Available at: https://www.legislation.gov.uk/ukpga/1988/52/section/192 (Accessed: 5 November 2026).
• Value Added Tax Act 1994, s. 26. Available at: https://www.legislation.gov.uk/ukpga/1994/23/section/26 (Accessed: 5 November 2026).

HMRC guidance

• HM Revenue & Customs (no date) EIM21664 – Particular benefits: exemption for bicycles. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21664 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) EIM21665 – Particular benefits: exemption for bicycles: how exclusion of employees affects availability condition. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21665 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) EIM21667A – Particular benefits: bicycles: simplified approach to valuing cycles sold to employees after end of loan period. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21667a (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) EIM21850 – Particular benefits: exemption for works buses. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21850 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) EIM42755 – Salary sacrifice: income tax effects of salary sacrifice. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42755 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) EIM44131 – Optional remuneration arrangements: excluded exemptions. Employment Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim44131 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) VATSC05880 – Consideration: Payments that are Consideration: Salary sacrifice. VAT Supply and Consideration Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc05880 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) VATSC05881 – Consideration: Payments that are Consideration: Salary sacrifice: Particular staff benefits. VAT Supply and Consideration Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc05881 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) Rates and thresholds for employers 2026 to 2027. Available at: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027 (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) Salary sacrifice for employers. Available at: https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye (Accessed: 5 November 2026).
• HM Revenue & Customs (no date) Non-statutory clearance service guidance. Available at: https://www.gov.uk/guidance/non-statutory-clearance-service-guidance (Accessed: 6 November 2026).

Other government guidance

• Department for Transport (2019) Cycle to Work Scheme Guidance for Employers. Available at: https://assets.publishing.service.gov.uk/media/6acf9237b8542d3693fd451d/cycle-to-work-guidance.pdf (Accessed: 5 November 2026).
• GOV.UK (no date) Electric bike rules. Available at: https://www.gov.uk/electric-bike-rules (Accessed: 5 November 2026).
• GOV.UK (no date) Income Tax rates and Personal Allowances. Available at: https://www.gov.uk/income-tax-rates (Accessed: 5 November 2026).

Cases

• AstraZeneca UK Ltd v Commissioners for Her Majesty's Revenue and Customs (Case C-40/09) [2010]. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62009CJ0040 (Accessed: 5 November 2026).
• Heaton (Inspector of Taxes) v Bell [1970] AC 728; (1969) 46 TC 211. Available at: https://www.bailii.org/uk/cases/UKHL/1969/TC_46_211.html (Accessed: 5 November 2026).
• R v Inland Revenue Commissioners, ex parte MFK Underwriting Agents Ltd [1990] 1 WLR 1545.
• R (on the application of Davies and another) v Commissioners for Her Majesty's Revenue and Customs [2011] UKSC 47. Available at: https://caselaw.nationalarchives.gov.uk/uksc/2011/47