- Search: Cycle to work
- Tax saving tips and tools

We may not be known as a nation of cyclists, but increasingly we are leaving the car keys at home and jumping on a bike to get to work. Even Tory leader David Cameron was eager to publicise his green credentials when he was photographed cycling to the House of Commons.

But it is not just about being green (though that is a motivating factor) the thing that really persuades people to take to two rather than four wheels is the financial savings.

The options are endless, for the really committed (or those who live not too far from work) the business travel bill could become a thing of the past all together. For the cost of, say, a £200 mountain bike an annual travel bill of thousands could be wiped out.

Chris McNabb from Balham in London has been cycling to work at a design agency near Bond Street for over a year now and it has helped give him and his wallet a clean bill of health.

"I live fairly central so my travel costs are not as bad as those who travel in to London from the Home Counties but it adds up nevertheless. It would cost me £33.20 to buy a weekly pass for zones 1-4 so over a year this would really add up." In fact the actual saving for Chris is £1726.40 per year.

"To be honest the cycling to work was just the start of it, I really got into the freedom of just jumping on my bike to go and see people or go out at night. No waiting around at bus stops or tubes or even taxi ranks! Each time I use my bike I save myself money."

Phil Finch from Weybridge didn't really have the option of cycling to his job in the City but after working out what he spent on travel per week, he decided to do the next best thing.

"I worked out that I spent £3.60 per day on parking before I ever set foot on the platform. I bought a fold away bike that I can take on the train and this alone saved me £900 a year. I have been doing it for years. I take the train (the cheapest return to Waterloo) and then cycle to Bank.

"I don't need to buy a peak day travel card anymore so the standard day return costs me £11.20 as opposed to £17.10 for the railcard - a saving of £5.90 a day."

The grand total of Phil's savings, assuming 2 weeks holiday a year, is (£900 saved from parking and another £1475 saved in fares) - £2,375!

There has been another indirect saving for Phil too. "I am cycling 11 miles a day in total and I am now two stone lighter than I was three years ago when I used to drive everywhere. I allowed my gym membership to expire because the cycling had got me to my target weight and I wasn't using the gym anyway."

That's another £800 a year that Phil doesn't need to fork out.

Cycle to work

Under the government's Cycle to Work initiative launched in 2005, employers can loan bicycles to their staff as a tax-free benefit on the condition that the bicycles are mainly used to get to and from work or for work-related purposes. The employee 'buys' the bike at the end of the loan period for a nominal sum.

Employees benefit from better health and better bikes because their money goes further. Because of the tax break, with a budget of, say £400, an employee in the high tax-band can now afford a bike, plus accessories, worth nearly £800.

Pedal power pays off

Mileage allowance is also available to cyclists who use their bike for work related travel. This does not however cover journeys from home to place of work each day. But if you are a courier or a district nurse or use the bike to take you from one place of business to another during a working day, then the statutory tax and NIC free rate is 20p per mile. Employers can pay you more than 20p, but the excess is taxed. If employers pay less than the statutory rate, employees may claim tax relief up to the 20p level.

Cut out the gas and go green

Apart from the savings on car park fares and rail tickets - there is of course the saving on petrol. Over the last few years, the turmoil in the Middle East has seen serious petrol price hikes. But it is not just the cost but the damage to the environment that is persuading people to go for pedal power.

Val Eastham from Cheshire used to drive to work and drive to school to pick up the kids. "To be honest I was jumping in the car for every journey. But when we moved house and the kids were that bit older it was suddenly feasible for them to cycle to school in the town and for me to cycle to work too. The school is on my route to work so we all go together and I meet them after school." She adds: "I may not have done a lot of long journeys in the car but I was still going the best part of a tank of petrol a week. I am now filling up every fortnight and it is saving me about £64 a month."