HMRC's new guidance on the Cycle to Work Scheme may result in many employer schemes having to be changed to avoid loss of the income tax and NIC benefits.
There is difficulty in matching the requirement for the scheme to be made generally available to all employees on the same terms, with problems in offering Credit Agreements to employees under the age of 18. Also, many employers with employees paid near or at the National Minimum Wage have excluded them from Cycle to Work schemes because they are afraid that giving them this benefit may potentially infringe National Minimum Wage provisions.

Historically, HMRC has accepted many schemes with these features, but the new guidance makes it clear that the legislation is now being interpreted more strictly. It is not yet clear how far this will affect schemes already in place.