What is a sponsoring organisation?
As a sponsoring organisation, you agree to fund the mileage based payment of cyclists from groups who you have chosen to support who sign up to free2cycle. These may be your employees, but can extend to other groups that you wish to support.
How do I set-up as a sponsoring organisation?
It's easy. You can apply on line via our webpage where you will also find more information about free2cycle. If you're in a hurry then click here and we will take you directly to the application process.
How will it benefit me as a sponsoring organisation?
- Increased Productivity;
- Reduced absence;
- Less sick pay;
- Significant return on investment; an estimated £10 for every £1 contributed;
- Opportunity to improve your business with carbon offset & resulting carbon credit opportunities;
- Healthier, happier team members;
- Reduced emissions, congestion and traffic noise;
- free2cycle will supply you with a carbon savings report, quantifying the positive impact your organisation is having on the environment.
- Less investment for extraneous costs, such as parking;
- Added value to the greater economy.
How does free2cycle differ from other cycling schemes?
- Unlike traditional cycle schemes there are no upfront costs for sponsors.
- free2cycle is equally attractive to all, regardless of income and no salary sacrifice is required.
- The free2cycle app tracks, records and monitors the cyclist’s mileage achieved.
free2cycle will track individual progress and will supply you with a monthly report confirming the resulting carbon savings, and the positive impact your organisation is having on the environment.
- Sponsoring organisations contribute 20p plus VAT per mile. A typical commitment of around 3.5 miles each way would enable the cyclist to get a bike worth £600 and cost you £20 per month plus VAT. This investment typically provides a return of around 10 to 1.
- Unlike current schemes, free2cycle requires cyclists to take ownership of the bike and make a commitment to use it. We focus on encouraging people to take responsibility for their own wellbeing and long term behavioural change.
- free2cycle continually rewards and encourages cyclists to meet their targets. By using their bike it pays for itself; by commuting by bike they earn rewards.
Tax - Benefit In Kind approach
free2cycle is a health, wellbeing and environmental initiative offered in conjunction with organisations, the bike happens to be the key piece of equipment required to deliver this. It’s not about simply providing bikes, it's about encouraging people to ride them on a regular basis.
Advice and structure
The advice from a leading tax barrister together with further advice from a leading accountancy practice are central to the way free2cycle has been structured. It conforms to tax laws and guidelines so that it isn’t construed as a benefit in kind.
No benefit if ever paid to the individual by the organisation;
Individuals earn their bike by riding it, if they don’t ride they take responsibility for some or all loan repayments;
The individual owns and takes full responsibility for the bike from delivery;
The individual enters into a third party credit agreement at market related rates (free2cycle funds the payment of the loan based on activity using fees collected from the organisation); and
Fees charged by free2cycle to organisations are for a range of services in relational to health, wellbeing and environmental benefits, reporting, engagement, administrative and reporting not solely or directly related to the value of the bike.
In tax law, a “Benefit In Kind” is chargeable to tax if there is a 'special bounty arising from its provision', In other words, the employee must get something over and above what the employer gives as a fair bargain, or would be prepared to give as a fair bargain, to a member of the public, or other independent third party, dealing on arms length terms with the employer. In the case of free2cycle:
Bike cost is the market price;
Each individual enters into a credit agreement at market rates;
Full responsibility for the credit agreement rests with the individual if they don't ride their bike;
Ownership of and responsibility for the bike is that of the individual at all times;
No payments are ever made to cyclists, the funding of the credit agreement payments is made by free2cycle based on the use of the bike, not in the performance (or assessment) of any duties they may have to a sponsoring organisation; and
The website, the bikes, the tracking app are all standard regardless of organisation, no preference is offered to any individuals or any particular organisation.
Thus no “special bounty” exists and bikes provided by free2cycle should not be treated as a “Benefit in Kind”.