General Note
NHS Fife acknowledges and agrees with the importance of regular and timely review of policy statements and aims to review policies within the timescales set out. New policies will be subject to a review date of no more than 1 year from the date of first issue.
Reviewed policies will have a review date set that is relevant to the content (advised by the author) but will be no longer than 3 years.
If a policy is past its review date, then the content will remain extant until such time as the policy review is complete and the new version published, or if national policy or legislative changes are made
1. FUNCTION
1.1 NHS Fife is committed to supporting the health, wellbeing, and financial security of its staff while advancing its sustainability objectives. This policy outlines the operation of the Cycle to Work Salary Sacrifice Scheme.
1.2 This policy aligns with NHS Fife’s commitment to achieving net-zero carbon emissions and contributing to sustainability goals as outlined in the NHS Scotland Climate Emergency and Sustainability Strategy.
1.3 The scheme supports NHS Fife’s objectives of improving staff recruitment, satisfaction, retention and affordability of sustainable transport options by facilitating access to bikes under a salary sacrifice arrangement.
2. LOCATION
This policy applies to all substantive employees of NHS Fife who meet the scheme’s eligibility criteria and whose employment is governed by NHS Fife.
2.1 Scope
This policy applies to:
- Staff employed directly by NHS Fife on a permanent basis and excludes staff on any non-permanent, or as and when required contractual arrangements. Staff on bank or locum contracts are not eligible to apply.
- Employees who meet the minimum eligibility criteria (e.g., minimum working hours and salary thresholds).
3. RESPONSIBILITY
3.1 Chief Executive
3.1.1 The Chief Executive holds overall accountability for ensuring this scheme is operated in alignment with NHS Fife’s sustainability and workforce wellbeing goals. The responsibility has been delegated to the Director of Property and Asset Management.
3.2 Directors
3.2.1 Directors are responsible for promoting the scheme within their areas of responsibility and ensuring compliance with this policy.
3.2.2 The Director of Property & Asset Management serves as the Executive Lead for the scheme, overseeing governance, compliance, and reporting.
3.3 Line Managers
3.3.1 Line managers are responsible for:
- Providing staff with information about the scheme.
- Supporting the onboarding of eligible employees.
3.4 Employees
3.4.1 Employees participating in the scheme are responsible for:
- Ensuring compliance with the terms of the salary sacrifice agreement.
- Ensuring they understand the financial implications.
- Advising NHS Fife and the Scheme Administrators of any issues which may affect their eligibility for this scheme.
3.4.2 Participating in a salary sacrifice arrangement can impact your NHS pension benefits, and the effect varies depending on which section of the NHS Scotland Superannuation Scheme you are a member of.
- Childcare Vouchers and Cycle to Work Scheme: Salary sacrifice arrangements for these specific benefits are considered pensionable under the NHS Pension Scheme (Scotland). This means pension contributions and benefits remain based on the full, unreduced salary. Participating in the cycle to work salary sacrifice scheme will not impact your pension contributions.
- Other Salary Sacrifice Schemes: For arrangements like car lease schemes, the sacrificed portion of salary is not pensionable. This means both pension contributions and accrued benefits will be based on the reduced salary during the salary sacrifice period.
For official guidance on pensionable salary and salary sacrifice schemes, refer to NHS Scotland's Pension Circular 2023/13:
NHS Scotland Pensions - Salary Sacrifice Circular
3.5 Supplier Responsibilities
3.5.1 The scheme’s supplier, Halfords, is responsible for administering the scheme. NHS Fife reserves the right to audit the supplier’s compliance with contractual obligations.
4. OPERATIONAL SYSTEM
4.1 Employees must meet the following eligibility requirements to participate in the scheme:
- Earn above the National Living Wage after deductions and above the lower earnings limit for NI contributions, after the cost of the voucher is deducted.
- Be employed on a permanent contract. Staff on bank or locum contracts are not eligible to apply.
- Bank staff or staff who are on a career break and staff who are on unpaid absence at the point of application will not be eligible to participate in the salary sacrifice scheme.
4.1.2 Employees are permitted to get access to one bike under this scheme at any one time.
4.1.3 To apply for the scheme, NHS Fife employees must use our scheme specific code which can be found on the sustainability staffpoint pages or by contacting fife.sustainability@nhs.scot. Each employee, after applying for the scheme, will be required to be vetted by the Financial Services team to confirm eligibility as per policy.
Employees must find their bike and/or accessories before applying, so they know exactly what amount to apply for. You cannot add funds or get a refund on your application once you have been approved. For example, if you apply for £1000 but the bike only ends up costing £800, you will pay salary sacrifice on £1000. It is therefore important that you identify what you are buying and the exact cost before applying for the scheme. There is a wide range of bikes available. Employees can shop in-store at Halfords, Tredz, or one of the independent shops Halfords works with.
4.2 Financial Parameters
- The maximum amount an employee can apply for via the scheme is £5,000 over a 12-month repayment period.
- All bike payments must be made once the agreement is in place. There is no option to return the bike part way through the agreed deduction period.
- As per the ESPO framework, the scheme includes a 7.5% Contribution to financing costs. This means Halfords will discount our invoices by 7.5% against the total amount.
4.3 Benefits for Employees
Employees participating in the scheme will receive the following benefits:
- Access to a bike and/or bike accessories for a bike, whilst making significant savings on income tax and national insurance contributions.
- Estimated savings depend on an employee’s individual tax position and applicable National Insurance rates. Scottish taxpayers may typically save between 27% and 50%, depending on their Scottish Income Tax band. The latest tax rates can be found on the Government website.
4.4 Contractual and Operational Details
4.4.1 The scheme is administered in collaboration with Halfords, with contractual documents such as the Salary Sacrifice Agreement, Master Contract Hire Agreement, and Insurance Policy Summary governing operations.
For UK Tax purposes, before your initial 'hire' (salary sacrifice) period has come to an end, we’ll be in touch to offer you three options of dealing with any remaining taxable value.
Option 1: You’ll have the option to enter a zero-cost 'extended hire' arrangement directly with Halfords until the value has depreciated to a point of negligible tax value. When this happens, Halfords will then transfer ownership of the bike and/or accessories, so you become the rightful owner. This solution maximises your savings.
Option 2: You can take immediate ownership of the bike at the end of initial 'hire' (salary sacrifice) by making a payment direct to Halfords for the "fair market value" of the bike. The "fair market value" as determined by HMRC is usually 18% or 25% of the original value. The bike and/or accessories will then be yours immediately.
Option 3: You have the option to return the bike at the end of the initial 'hire' (salary sacrifice) period to your local Halfords store where it will be safety checked and donated to ReCycle where bikes are refurbished and sent to Africa.
If an employee were to leave or be made redundant during the initial ‘hire’ (salary sacrifice) period, the remaining gross balance would be deducted from their last payslip. If, however, this were to take place after you had chosen to ‘extend the hire’, there would not be any changes as the ‘extend the hire’ is a new agreement between the employee and Halfords.
4.4.2 Employees must comply with all terms set out in the contractual documents, which form an integral part of this policy.
5. RISK MANAGEMENT
5.1 NHS Fife will assess risks associated with the scheme, including financial liabilities, reputational risks, and compliance with tax and employment regulations.
5.2 Any risks identified will be documented in the Corporate Risk Register and monitored through the relevant governance structures.
6. RELATED DOCUMENTS
6.1 Supplier’s Salary Sacrifice Agreement and Contractual Terms (available on request).
6.2 NHS Scotland Climate Emergency and Sustainability Strategy.
Visit Cycle2Work | Cycle to Work Scheme | Halfords UK for full details about the scheme, including:
7. REFERENCES
7.1 HMRC Guidelines for Salary Sacrifice Schemes.
7.2 The Equality Act 2010 (where applicable).
7.3 National Minimum Wage Act 1998.
