Chelthenham-based accountants, Smith Heath, are highlighting a tax-efficient way to travel to work and reduce carbon footprints.

HM Revenue & Customs offer a range of incentives to businesses that want to help  employees travel in a more environmentally friendly way.

Under Cycle to Work schemes designed to encourage staff to travel to and from work by bike, employees pay no tax or national insurance for using bicycles or cycle safety equipment provided by their employer, as long as the bikes or equipment are available to all staff.

Employees can even use the bikes for leisure, providing they are mainly used for commuting to work, while employers are exempt from paying tax or national insurance on the cost of providing cycle parking.

Businesses can also sign up to a scheme under which they can claim back the VAT on bikes they buy, then lease the bicycle to an employee for a year. The employee pays a monthly rental, deducted before national insurance and income tax are calculated to cut their personal tax bill, and may also be given the opportunity to buy the bike at the end of the 12 months at a fair market price.

Staff who use their own bike for business travel are also eligible for a tax-free payment of 20p a mile. Employers can pay more than this, although higher payments will be taxable.

Tim Heath, director at Smith Heath, said: "Cycling to work s a great way to keep fit as well as bringing many tax and environmental benefits.

"Cycling also cuts fuel bills and eases car parking problems for employers while saving them money on the costs of company car maintenance. With the tax breaks available, many businesses could find that cycling to work is well worth considering."