STAFF at Oxford University are waiting to hear the fate of their Cycle to Work scheme, which encouraged employees on to two wheels with the help of a tax break.

Like several other employers, the university – Oxfordshire’s second biggest employer with 18,000 staff – has suspended its scheme following new guidance from Revenue & Customs.

The scheme allows cycle commuters to buy a new bike, paying through pre-tax deductions from their salary.

After a set period – usually a year – the employee then buys the bike at a reduced rate, called the ‘fair value’.

Over the past five years, hundreds of Oxfordshire cyclists have taken advantage of the scheme, offered by about 25,000 employers nationwide.

Until this summer, the fair value figure was set at five per cent. But in August, Revenue & Customs produced a new table of values.

After one year, bikes up to £500 are valued at 18 per cent, for example, while those over £500 are valued at 25 per cent.

University spokesman Ruth Collier said: “The university has temporarily suspended our scheme following the new HMRC guidance.

“We’re aiming to have a new scheme available for staff soon – but there are meetings going on to discuss this.”

James Styring, of Oxford Cycling pressure group Cyclox, said that even with a reduced benefit, the scheme was still a worthwhile incentive for commuters, and made good economic sense for employers.

He said: “Commuting by car causes pollution, congestion, and even traffic injuries. Cycling causes none of these. Cyclists take fewer days off sick and they live longer.”

Meanwhile, bike shops in Oxford are hoping sales will not be too badly affected. Luis Tulip, of Beeline Bicycles, in Cowley Road, said: “It all depends on what employers decide to do. It’s still a tax saving for customers who want to buy a bike and it still encourages people who want to ride to work.”

Andy Holme, of Warlands Cycles, in Botley Road, said the tax ruling and complex paperwork meant the scheme was now less attractive. But he did not expect sales to be badly hit.

“We might have a quiet six months, but then people will get their heads around it. I think the scheme will carry on for a while, but will gently fizzle out.”

He added: “We survived perfectly well without it before 2005 and the paperwork involved is mind-boggling.”