Cycle2work scheme 2018 FAQ s. You can apply for the 2018 Cycle2work scheme from: 5 March to 16 March.

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1 Cycle2work scheme 2018 FAQ s You can apply for the 2018 Cycle2work scheme from: 5 March to 16 March. Visit to find out more and use the employer code, BUPAC2W to register.

2 Cycle2work Frequently Asked Questions: 1. Can I register for Bupa cycle2work at any time? No. There is a specific annual enrolment window during which you can register for Bupa cycle2work. The window will be Monday, 5 March to Friday, 16 March I m aged under 18. Can I still join the scheme? Yes. However, since you re under the minimum age to enter a hire agreement, you ll need to arrange for an adult (for example parent or guardian) to act as a guarantor on your behalf. 3. Can I join the scheme if I am bank staff? No. You need to be receiving regular monthly pay to join the scheme. 4. Can I join the scheme if I am on a fixed term contract? If your contract end date is after 1 April 2019 then yes you can apply. Otherwise if your contract is due to finish before the end of the cycle2work deductions then you wouldn t be able to apply for the scheme. 5. I don t have an address. How can I apply for the scheme? You ll need to call the Halfords contact centre on to apply for the bicycle package over the telephone. Halfords will post out the hire agreement directly to you. 6. When am I likely to receive my LOC (letter of collection voucher you need to collect your bike)? Bupa will need to complete some eligibility checks before confirming your application. You ll receive your LOC at the end of the window. 7. My salary is very close to the National Living Wage. Can I still join the scheme? Apply for the scheme in the usual way, you may be offered an alternative LoC amount or an alternative option to allow you to cycle to work. 8. Where is my nearest Halfords store? Find your nearest store on the store locator at 9. Do I have to get my bike from a Halfords store? No, Halfords work with 860 independent stores including Cycle Republic and Tredz.co.uk. If you can t find what you are looking for in a Halfords store. Please go to select the Store locator option and alternatives to Halfords. 10. Do I need to use the bicycle to cycle to work? Yes. By taking part in Bupa cycle2work you are confirming that at least 50% of the bike s use will be for eligible work journeys. Eligible use includes: cycling between home and a train station as part of your commute; from home to work or vice versa; and cycling between work locations. (You don t need to keep detailed records of time spent cycling or miles travelled!) 11. Does this mean I have to cycle to work all the time? No. The test is based broadly on 50% of the bike s overall usage (even if you can t use the bike routinely). 12. What if I don t use the bike mainly for cycling to work? You are not expected to keep a mileage log but if you do not use the bike mainly for qualifying journeys you will not satisfy the terms of the tax exemption. 13. Who owns the bicycle? You will not own the bicycle described in the hire agreement. It will be owned by Bupa for the duration of the hire agreement (12 months). 14. When will the salary reductions begin and how long do they continue for? The salary reduction will commence on 1 April 2018 and usually continue for 12 payments unless you leave the company or go on unpaid leave. (See below for what happens in these circumstances). Please note that salary reductions will begin on 1 April 2018 whether you have exchanged your LOC or not.

3 15. Can I top-up my LOC with my own money? No, the maximum LOC amount is 1,000. This is to comply with consumer credit licence limitations. 16. When will the hire period end? The bike will be hired to you for a period of 12 months i.e. until 31 March 2019 (unless other arrangements apply due to absence from work). It will remain wholly owned by Bupa and you will not be able to participate in another scheme until after the hire period ends. 17. What happens to the bicycle after the hire period? At the end of the 12 month hire period Bupa may offer to gift the bike to you, and you would be liable to pay tax on the value of the gift. Currently HMRC estimates that after 12 months the bike can be valued at either 18% of its original LOC value (for LOCs below 500) or 25 % of its original LOC value (for LOCs equal to or greater than 500). Please note HMRC s guidance is subject to change over time. The amount of tax you incur will depend on your marginal tax rate and the fair market value of the bike at the end of the lease. This will be added to your P11D by Bupa. The following examples show the value of the fair market value and how much tax would be due: Value of certificate Disposal value 18% Tax charge Marginal tax rate 20% Marginal tax rate 40% Marginal tax rate 45% Value of certificate 1, Disposal value 25% Tax charge Marginal tax rate 20% Marginal tax rate 40% Marginal tax rate 45% You ll also be given the option to return the bike. Should you choose to do so you will be required to cover the cost of return to a secure warehouse. For more information on the process of returning your bicycle please contact Halfords on or cycle2.work@halfords.co.uk This process is an indication of Bupa s intentions, but is not a commitment; you cannot therefore infer this is a formal contractual obligation. 18. Can I apply for more than one bike? Yes, two is the maximum allowed providing that you use both for commuting to work and they jointly total no more than 1,000. For example, if you travel to work partially by train, then you could have one bike to commute between your home and the station and another to travel from the train s destination to your work location. Your LOC must be used in one transaction. 19. Can I use the LOC to get a bike for my family member/child/partner etc? No. You must use the bike yourself for commuting/business travel purposes. 20. What happens if I do not spend my full LOC value? The salary reductions are determined by the amount specified on the LOC. If you do not fully utilise the amount, your salary will still be reduced by the amount set out in the Hire Agreement. 21. What happens if the LOC expires before I have selected my bicycle? Your LOC will expire four months from the issue date. This date is printed on the LOC. The expiry date is set and cannot be extended and your salary reductions will be taken whether you exchange the LOC or not. 22. Can I obtain accessories with my LOC? Yes. You can obtain either just accessories (min 100) or accessories and a bike with your LOC. The accessories typically include: Lock Pump Gloves Reflective Jacket Lights Helmet Pannier rack and bags

4 23. Will the bicycle be set up for me? The Halfords store will set the bike up for you according to your specific requirements. 24. Will I need to separately insure the bicycle? Yes. You will need to make sure that adequate cover is provided e.g. on your home contents insurance. 25. What happens if the bike is stolen or damaged? You are responsible for the bike. You are strongly encouraged to insure it as you probably do with other contents in your home. If it is stolen or damaged, it cannot be replaced under the cycle2work scheme. The salary reduction will not stop or be suspended due to loss or damage to the bike. The deductions will also change to a net deduction rather than gross meaning you will no longer save money in tax and NI, because you are no longer using a bike to cycle to work. 26. What happens if I no longer require the bicycle? Can it be returned before the end of the term? No, the term is fixed. Once you have signed the hire agreement, your salary reduction will continue for 12 pay periods. 27. What happens if I change my mind? Once the opportunity window is closed, employees have a 14 day cooling off period in which they can cancel their application. After this point, an application cannot be cancelled. Providing you have completed the online process within the timeframes indicated, the agreed salary reduction will apply for 12 pay periods even if you decide not to collect or use the bike. 28. What happens if I take maternity, paternity, parental, adoption or sick leave? If you take maternity, paternity, parental, adoption leave or sick leave during the hire period, you may continue to use the bicycle. Salary reductions will continue for any period during which you are in receipt of salary which is over and above any statutory payments. If not, Bupa will either a) agree an alternative arrangement or b) suspend reductions until your return to work when the salary reduction will recommence for the remainder of the 12 pay periods. In this case the original term will be extended. 29. What happens if I leave during the contract term? If you leave Bupa s employment for any reason during the payment period (including as a result of redundancy), you will become liable to pay an amount equivalent to the remaining balance of your hire contract from your net salary in accordance with the Salary Sacrifice letter. If your final net salary is insufficient to pay the balance of the agreement, you will be required to pay the outstanding amount to Bupa within 14 days. If you leave at any time during the 12 month contract term you will receive a letter soon after the end of March 2019 outlining the options available to you, which may include transferring ownership. 30. What happens if I am on unpaid leave for the enrolment window? You need to be receiving some form of pay when we send out the invitation to join the scheme. If you are not receiving pay, then you will be unable to join this scheme but may be able to take part in a subsequent scheme, as long as your pay has restarted. 31. Do I need to maintain the bike myself? Yes. You are responsible for maintaining the bike for your own use. Your cycle retailer will be able to advise you about necessary servicing depending on how you use your bike. However, if you have selected a Halfords bike 6 weeks after collection, Halfords will conduct a service check for you. 32. How will the salary sacrifice affect pensions? If you are in The Bupa Pension Scheme, Bupa Retirement Savings Plan, any group personal pension or stakeholder plan, your pay for pension contributions and benefit purposes will not be affected. However, participating in the scheme may have an impact on work related benefit payments, such as statutory maternity or paternity pay, statutory sick pay, working tax credits and the state pension, as they will be calculated on your reduced salary. You should consider these effects carefully before you decide to enter into this scheme.

5 33. How will this affect participation in other Salary Sacrifice schemes? If you participate in any other salary sacrifice arrangements e.g. care-4 childcare vouchers, you should consider the combined effect this will have on your earnings and entitlement to earnings related benefits. 34. Can I claim a mileage allowance if using my bike on business? No. If you use a bike loaned by Bupa you cannot claim a mileage allowance for business travel. For information, journeys between home and work do not count as business travel. 35. What happens if I suffer an accident or injury when using my bike? We strongly advise all employees to take steps to obtain appropriate safety equipment when using the bike. In the unlikely event that you suffer an accident or injury while using your bicycle, Bupa cannot be held responsible for such an incident. It is your responsibility to ensure the bike is carefully maintained and in the event of any road traffic accident (regardless of fault where a third party is involved), you are solely responsible under the normal UK legal framework and rules of the road. It may be appropriate for you to obtain personal accident insurance, however, this is not currently a legal requirement. Obtaining such insurance is wholly your responsibility even though the bike is owned by Bupa. 36. Who do I contact if I have a question? If you have a question about the scheme please contact the Halfords cycle2work helpline on or cycle2.work@halfords.co.uk. Alternatively you can contact the Bupa Reward & Performance team at rewardandperformance@bupa.com 37. How much does a bike package cost to lease each month? Below is an example table of the amount you will pay. The amount that you save will depend on your marginal tax rate you can see an illustrative example of the savings in the table below. The minimum bike/accessory value is 100 and maximum is 1,000. The figures below assume that Basic Rate taxpayers are paying NI contributions at 12%, whereas employees in the Defined Benefit pension scheme pay 10.4%. Exact savings will depend on your salary level and the rates at which NI contributions and income tax are deducted from your salary. Further savings can be made if you are an additional rate tax payer (up to 47%). Table of typical savings and costs Number of payments Value of Letter of Collection ,000 Gross monthly salary Sacrifice Basic rate taxpayer Net reduction from pay per month Net impact over 12 months % saving 32% 32% 32% 32% 32% 32% 32% 32% 32% 32% Higher rate taxpayer Net reduction from pay per month Net impact over 12 months % saving 42% 42% 42% 42% 42% 42% 42% 42% 42% 42%