Cycle to work Scheme

poprad

Apologies if this has been done to death. I've just searched through the postings on this subject and I still can't see why a company that wants to say: "we have a green transport plan and as part of that we want to introduce a cycle to work scheme" can't just allow the employee to find a bike at any bike shop, buy it for the employee and loan it back to him/her under the scheme.

Is there any rule that says you can't source bikes from varios places or that you have to go to one of the well known providers (Halfords, Evans, etc)?

Does anybody know any companies who have done just that?

On the DTI site it says:

"To take advantage of the tax and Class 1A NICs exemption, an employer can simply buy a cycle and cyclists' safety equipment, reclaim the VAT, make use of the capital allowances and loan it to an employee for qualifying journeys to work. This arrangement means that the employee's normal salary arrangements are not affected. It may be, however, that the employer wants to recover the cost of providing the cycle and safety equipment loaned to the employee. Usually this would be done through a salary sacrifice arrangement."

Strikes me that the hard work is doing the salary sacrifice administration, not the voucher redemption bit.

To give a bit a context. The (small) company I work for started a scheme with Evans...and I don't really want to buy a bike from Evans.

RufusA

There is nothing stopping an employer doing exactly what you suggested.

In fact for a small company based on a single site, I'd recommend dispensing with scheme providers etc. If an LBS knew it was likely to get an order for 4 or 5 bikes and equipment I am sure it could be persuaded to come up with some very favourable prices.

However if your employer has already signed up with a provider, some (such as Cycle Scheme), have very restrictive contracts IMHO which would prevent employers sourcing bikes from anyone else.

The main advantage of a scheme provider is that they will provide an employer with a list of who has what, and handle all the buying / reimbursement side, which in truth is very easy. If an employer is only going to be buying 2 or 3 bikes, then a scheme provider is IMHO adds unecessary complication and in some cases extracts 10% of the bike cost for the privilege.

FWIW my employer bought the bikes direct from an LBS, and loaned the employees the equipment. It didn't bother with the salary sacrifice stuff as in it's opinion it was more hassle than it was worth.

It helps my employer has only 2 employees, and I'm the director

HTH - Rufus.

howiejmidlands

Hi

We have just set the scheme up in my company and used http://www.cyclescheme.co.uk/.

You can chose any bike shop, and they have about 850 across the UK.

Easy to set up and administrate.

Cheers

poprad

Thanks for your replies. If (Rufus) you don't do the salary sacrifice, does that mean you just save the VAT rather than the tax element?

I guess cyclescheme is the next best thing to running the scheme yourself. When you say any bike shop, you mean the 850 rather than any? If you wanted to source a bike like Sunday or Planet X, then I guess they wouldn't be able to do that.

Sailing7

Joined 'CycleScheme' too last year after the business owner approved the theory. Have to say they do make the process very easy, particularly in respect of the hire agreement that the employee has to sign. Otherwise I think that Inland Revenue see the bike as a benefit in kind and it would be subject to income tax. Someone else may know better?

So far the first person from our company got the quote from local store in Coventry on Wednesday, I sent details online to CycleScheme who turned an invoice round in a day, I got cheque signed same and voucher for bike was at our offices on Saturday - picked up the bike on Monday - one very happy employee!

magicroundabout

I suspect that this is much simpler with a smaller employer. My company has thousands of employees over many locations in the UK and so, presumably, CycleScheme give them a way of centrally co-ordinating things, and prevents them having lots of small arrangements with lots of different bike shops/dealers.

My LBS would certainly rather sell my employer a bike direct as CycleScheme take 10% of the cost!

MR

alfablue

We lobbied our Uni to choose Cyclescheme as our scheme provider, on the basis that it gave most choice and we didn't want Halfords. This is fine, except for a few caveats, 1) Planet-X only deal with Halfords, 2) Halfords undertake to supply (almost) and bike, not just the brands they stock, 3) Dealers pay Cyclescheme a 10% comission, so they tend not to pass on sale prices on Cyclescheme purchases, whereas the likes of Evans and Wiggle do let you but sale priced bikes.

I am not saying Cyclescheme is bad, it has a lot going for it, but it is not quite as much choice as we first thought, though I still am pleased we aren't dealing with Halfords.

RufusA

poprad wrote:

Thanks for your replies. If (Rufus) you don't do the salary sacrifice, does that mean you just save the VAT rather than the tax element?

You misunderstand, personally the savings are 100%, I get to use my employers bike for free. My employer bears the full cost of the bike, but can offset that against it's profit.

poprad wrote:

I guess cyclescheme is the next best thing to running the scheme yourself.

Not quite, as the scheme is IMHO restrictive, and they extract 10% of the cost from the bike shop for the scheme. So in effect they are charging your LBS up to £100 to issue a payment certificate, whereas a company cheque would cost next to nothing, and give the LBS £100 extra to play with discounts or free accessories.

YMMV - Rufus.

poprad

You misunderstand, personally the savings are 100%, I get to use my employers bike for free. My employer bears the full cost of the bike, but can offset that against it's profit.

Suspect the FD might not be up for that, but I live in hope.

Anyway, sounds like there is no real reason for small company not to buy the bikes direct and get some goodwill/discount from the bike shop.