Cycle to work schemes

Clever Pun

I'm championing this at work and I've got a couple of the directors interested as well so it they give the ok, I might have some say in which scheme to choose (I've been lead to believe that's there's a few out there)

That's where you guys come in: Any recommendations as to which schemes to choose/look at?

Thanks in advance

mailmannz

Ours is through hellfords...so I would suggest you dont use them!

Evans has one, maybe have a look at their website as the details of there scheme is on there.

Regards

Mailman

thebikeliker

Some dealers can't pass on the usual discounts because they have to pay cyclescheme 10%.

I believe Evans do still pass on discounts as they run their own scheme.

Check this first though as I could be mistaken.

RufusA

The BikeForAll website has a list of faciliators at the bottom of the following page:

http://www.bikeforall.net/content/cycle ... scheme.php

Would suggest you look at all of them. The choices tend to fall down to:

a) Company doing it themselves.
b) LBS network who pay to join i.e. CycleScheme.
c) Chains who supply their own or other bikes - Evans, Halfords, Edinburgh Cycle etc.

As to which is best, it's all in the detail. If it's a smallish company with a few employees then IMHO you may be best smooth talking a LBS and doing it yourselves.

A company with a large number of employees, or scattered offices should check which shops are near the offices/employees, study the small print of any contract in VERY CLOSE detail etc. Some scheme providers prevent the employer buying bikes elsewhere, have minimum contract terms, and as has been intimated earlier charge participating retailers a hefty percentage which means discounts aren't always available.

IMHO don't take everything a scheme provider tells you at face value. IMHO some are misinformed about the tax implications, will allow accessories with the purchase which IMHO shouldn't be allowed, or provide employee contracts which are hire purchase rather than rental.

Again IMHO the whole thing has been badly bodged by the Government, and companies are making [significant] money out of what should be a simple green tax saving initiative.

FWIW my company went it alone and got some nice discounts from an LBS.

YMMV - Rufus

thebongolian

mailmannz wrote:

Ours is through hellfords...so I would suggest you dont use them!

planet-x and condor are affiliated to the halfrods scheme so some nice bikes can be had through it. plus the bike hut brand has some good stuff too

Massimo

I managed to get the scheme set up here through Evans Cycles. From personal experience, its works fine. Doesn't cost the company anything, the salary sacrifice seems to be in order and the turnround time from order to delivery was minimal. What's more the Evans scheme applies to sale bikes so I was able to get a shiny Cannondale R800 reduced from £1300 to £1000 and ultimately I'll only pay around £500 - result!!

...and after 12 months I'll do it again..

Clever Pun

Thanks guys esp Rufus...

mailmannz

thebongolian wrote:

mailmannz wrote:

Ours is through hellfords...so I would suggest you dont use them!

planet-x and condor are affiliated to the halfrods scheme so some nice bikes can be had through it. plus the bike hut brand has some good stuff too

No question about that however at the end of the day I believe what really counts is that staff at the shop should be capable of giving QUALITY advice...not to mention actually being able to put bikes together safely! (not all of us are McGivors when it comes to putting bikes together!).

Mailman

Dispatches

Well I was pretty excited about getting a bike at 50% but then I read that after the 12 months of payment is up you still don't own the bike and have to buy it off the emplyer at a 'fair market value' which surely means you end up paying way more than just buying the bike outright.

this is from the edinburgh biike co-op faqs:

Will the employee own the bicycle and equipment at the end of the repayment period?
No. To be able to save on the tax and national insurance contributions, the agreement must be a Hire Agreement not a Purchase Agreement. At the end of the scheme it is common for the employer to offer to sell the bicycle and equipment to the employee for a fair market value. (Edinburgh Bicycle will be able to advise of the fair market value of a bicycle and safety equipment at the end of the scheme.) Though employees must be made aware that there is no guarantee of this taking place.

Anyone using one of these scemes care to comment on this as this sounds like a rip off to me!!!!!!

RossC

fair market value is 5% typically - what would your employer do with a load of used bikes?

davelakers

Im just buying my 2nd bike through a C2W scheme with my employer.

Ive just paid my last payment for for my current bike, (Carrera Gryphon Hybrid) which cost £360 from Halfords last year. Our company buys the bike, reclaims the VAT, passes the saving on to you and you also get a tax rebate.

Im restarting the scheme for a new bike (Boardman Comp) which is valued at £600. The total I will pay is £342, over 12 months. The final payment is a reduced payment which is counted as the final purchase payment.

The only problem I have is that I can only purchase from Halfords so Im a bit limited to what I can get. I am speaking to an enthusiastic and seemingly knowledgeable Halfords chap tomorrow about setting up the bike and also about the possiblility of buying a bike different than the standard Halfords range.

Fingers crossed!!

Dispatches

RossC wrote:

fair market value is 5% typically - what would your employer do with a load of used bikes?

So your saying the 'fair market value' of a £800 pound bike is only 5% of its original purchase price. So I could then buy the £800 bike of my employer for only £40 if so then the scemes starting to make sense again. Can anyone confirm this.

davelakers wrote:

Ive just paid my last payment for for my current bike, (Carrera Gryphon Hybrid) which cost £360 from Halfords last year.

So how much did your company charge you to 'buy' the bike?

Thanks for your help

davelakers

The company bumf says the final payment on the bike is the higher of either 5% of the market value or £20.

My last payment was £20.50 I think.

I cant fault this way of buying a new bike. (apart from being restricted to Halfords)

fossyant

I'm hoping my new employer runs the scheme of some sort - one of the manchester universities and by looking at their policies, they seem very keen to promote cycle commuting, so things are looking up.

RufusA

Dispatches wrote:

So your saying the 'fair market value' of a £800 pound bike is only 5% of its original purchase price.

This question has many facets, and many answers.

From an Employers point of view the final price is a small "peppercorn" amount to get rid of the bike.

From a Scheme providers / contractual point of view they can provide no guarantee or assurance of any final purchase. To do so would make it a hire purchase agreement rather than rental with hefty tax penalties for all concerned!

From the Department For Transport point of view, they expect Fair Market Value for the end of the scheme, but what to imply this is low otherwise the whole scheme is dead in the water.

From the Inland Revenue point of view the Fair Market Value should be that you would reasonably expect to pay on the open market for a similar bicycle of a similar age and condition. For a £800 bike this is probably £400 after 12 months.

So whilst everyone else is happy to pretend that 5% is a good FMV (this figure was plucked out of the air based on what the IR agreed to for 3 year old computers bought through the Home Computer Initiative), then the scheme works.

The moment the Inland Revenue start asking tough questions - which in this "everything is green" Government, it would probably be unlikely they do. Then the whole thing collapses like a badly built stack of playing cards.

Also worth pondering what would happen if company 'X' with 1000 bicycles were taken over by an Asset Management Company or went in to liquidation. Do you think the 5% nod and wink would still apply, or would the new owners want to maximise the return from their bicycle portfolio.

IMHO most people get away with 5%, but don't count on it! Also IMHO the Government has made a pigs ear out of implementing tax free bikes for the masses.

HTH - Rufus.

Totalnewbie

My company (a small association with only 0.5 HR staff - yes really) has been saying since about May that they are implementing this scheme.

I'm currently riding an elderly bike not particularly suitable for rush-hour traffic so I'm desperate to take it up but every time I ask what's happening I'm told they're still doing the paperwork. How long does it take to administrate?!

RufusA

Totalnewbie wrote:

...I'm told they're still doing the paperwork. How long does it take to administrate?!

In theory if they go through a scheme provider, and blunder along with their eyes shut, it's a case of downloading the forms, signing and returning and it's all up an running within weeks.

If they are more clued up they may wish to assess each scheme provider. Read through what each one says. Get the contracts checked by someone with legal knowledge of employment and contractual law. Ammend the employment terms and conditions. Check the tax position with someone with a tax bent etc. Whilst still paying salaries, filling in the seemingly thousands of Government returns, and explaining to management why employee sickness increased 1% this quarter!

YMMV - Rufus.

Totalnewbie

Thanks Rufus. I highly doubt that they are doing any more research etc than they can get away with - the woman is only half a HR person and spends the other half of her time doing something else so I cannot imagine her deciding to do research. Last I heard they'd sent the paperwork off and were waiting for a reply.

Massimo

I must work for an enlightened employer - we discussed the 'what happens after 12 months' question and they decided that after one year they are letting me have my bike for the princely sum of one pound - how cool is that!!

RossC

Dispatches wrote:

RossC wrote:

fair market value is 5% typically - what would your employer do with a load of used bikes?

So your saying the 'fair market value' of a £800 pound bike is only 5% of its original purchase price. So I could then buy the £800 bike of my employer for only £40 if so then the scemes starting to make sense again. Can anyone confirm this.

http://www.cyclescheme.co.uk/employee,faqs.htm
has:
"What happens at the end of the loan period?
It's your employer's choice whether they opt to sell you the bike at the end of the hire period. If you choose to become the owner of the goods, you may be offered the opportunity to pay the Fair Market Value for them from your net salary, equal to around 5% of the original value. If you choose not to buy the bike you will be charged the equivalent of the Fair Market Value to dispose of the goods, probably to a charity.
The fair market value cannot be stated before or during the scheme as this could be considered a benefit in kind as hire-purchase does not warrant any tax-relief"

It's a tokenistic get-out from a tax point of view (I guess). If you can find the bike you want at a shop that is willing to do cyclescheme (may not be local to you), Cyclescheme can work

Steve_F

Our work one is set up through Halfords, work for a big company so no idea about the set up but looked into the 5% thing before I bought and was happy with what they were saying. Biggest surprise was the amount that I'm paying a month, price of the bike is going to end up hugely below what I thought!!

Already planning whether to buy an xc hardtail or a new road bike, :? , poor me having to make all these decisions!

villa-ru

Everyone is very cynical, aren't they?

Yes - the 5% bit is vague, but as stated above is to avoid it being an HP agreement. Just discuss with HR before you start what a fair market value is. They won'e know, so will stick witht the recommendations.

As far as doing it through Halfords; despite my reservations they were great. There is a (very helpful) department who you can phone & they will get most other brands. They couldn't get a Charge Plug, but could get a Pearson Touche - which I now have, for the grand total of 79p a day.

What's not to like?

RufusA

villa-ru wrote:

Everyone is very cynical, aren't they?
....
What's not to like?

I'm quite cynical about it - which is probably what taints this thread.

To my mind it seems crazy that something which should be simple tax free saving to encourage green transport has been so badly bodged by the Government that everything is done with a nudge and an implied term that can never be stated etc.

If anyone wants to feel cynical, telephone your local tax office, and ask them what they would accept as a Market Value at time of transfer for a 12 month old bicycle as specificed in the ITEPA 2003 section 206(2):

http://www.opsi.gov.uk/ACTS/acts2003/uk ... pb3-l1g206
http://www.hmrc.gov.uk/budget2005/revbn31.htm

'market value' in relation to any assets means the price which those assets might reasonably be expected to fetch if sold in the open market."

or if they don't want to red flag the issue, ask the scheme provider what they are basing their recommendation of 5% on, and whether they have taken any advice from the HMRC concerning this?

I cannot see how anyone can reasonably argue that the Market Value of a 12 month old bike originally costing £800 is only £40!

Then again I can't see any tax office persuing a claim, but it's the uncertainty of this for employers and employees which IMHO discourages people from taking part in these type of schemes.

YMMV - Rufus.

bossman13

my work offers a 25% discount on the price of the voucher even before all the tax/NI savings

was advised today that Halfords will source anything outside their range at the Manufacturers RRP - meaning might pay slightly over the odds i guess compared to what you might find trawling through tinternet.

davelakers

RufusA wrote:

villa-ru wrote:

Everyone is very cynical, aren't they?
....
What's not to like?

I'm quite cynical about it - which is probably what taints this thread.

To my mind it seems crazy that something which should be simple tax free saving to encourage green transport has been so badly bodged by the Government that everything is done with a nudge and an implied term that can never be stated etc.

If anyone wants to feel cynical, telephone your local tax office, and ask them what they would accept as a Market Value at time of transfer for a 12 month old bicycle as specificed in the ITEPA 2003 section 206(2):

http://www.opsi.gov.uk/ACTS/acts2003/uk ... pb3-l1g206
http://www.hmrc.gov.uk/budget2005/revbn31.htm

'market value' in relation to any assets means the price which those assets might reasonably be expected to fetch if sold in the open market."

or if they don't want to red flag the issue, ask the scheme provider what they are basing their recommendation of 5% on, and whether they have taken any advice from the HMRC concerning this?

I cannot see how anyone can reasonably argue that the Market Value of a 12 month old bike originally costing £800 is only £40!

Then again I can't see any tax office persuing a claim, but it's the uncertainty of this for employers and employees which IMHO discourages people from taking part in these type of schemes.

YMMV - Rufus.

Or why not just let it be, take advantage of it and accept that its a superb way of buying a bike!!