The short version
- Employment status matters
- A sole trader cannot sacrifice salary to themselves
- The company must own or hire the bike
- Business expenses are a separate question
Directors must separate company and individual
A company should approve the arrangement, acquire or hire the bicycle and retain ownership during the relevant period. A director cannot simply buy a personal bicycle on the company card and assume the exemption applies.
Confirm all-employees access, qualifying use, payroll capacity and minimum-wage treatment. A low director salary can limit salary sacrifice.
Self-employment alone does not qualify
The exemption concerns an employer lending or hiring equipment to employees. A sole trader cannot enter the same salary-sacrifice arrangement with themselves.
Someone with a separate PAYE job may qualify through that employer. A limited-company employee is also different from a sole trader, but the conditions still apply.
Business costs use different rules
Self-employed riders may need to consider actual business expenses, mixed use and vehicle-expense rules. Companies must address ownership, private use, VAT and later disposal.
Keep mileage and cost records and obtain tax advice for a material purchase. Do not copy an employee scheme without checking legal form and use.
Check the current guidance
Rules, schemes and product ranges can change. These live links are the authoritative or independent starting points used for this guide.
