C2W scheme....again!

Dobbs

Any one know a shop/e-tailer might be willing to supply Santa cruz frame only on this scheme (not the Halfords one!)
PM only please-do not post names!

Thanks!!

gcwebbyuk

From what I understand, the C2W scheme is only for full bikes, you can't just buy the frame.

Dobbs

Thanks mate, I realise that.
However I am aware that there are some friendly places who may help out and apply some "imagination" on the admin side.......

gcwebbyuk

Ah I see :P

Am sure there will be some companies out there wanting a sale - credit crunch and all!

The invoice for my bike on the scheme simply said "Specialized Mountain Bike" didnt say any more than that! So I think the rules are easily "adjusted"

Tranced

I'm not seeing the point of this scheme. Please enlighten me....
As I see it, one gets tax saving on up to £1000 by virtue of the fact that repayments that you have to make to your company get taken off your salary "pre tax". So far so good, but then at the end (after a year I think) you still have to pay in a "reasonable market value" to the dealer before you actually own the bike.
Who determines this "residual value"?
What's to say this "residual value" will be less than the tax saving? If equal or even worse more than the tax saving, one would end up paying more than the innitial purchace price.
What if one does not have the "residual amount" to pay to the dealer.... do they reclaim the bike?

Scheme is so popular that I can't see people being caught out with it, but where I come from, there'd almost always be a scam behind something like this (govt involvement or not) so maybe I'm just not seeing the whole picture.

My sceptisism prevented me from using the scheme recently when buying another bike. Was I wrong?

gcwebbyuk

Your employer owns the bike till the end of the scheme - you lease/rent it from them.

The "reasonable value" is usually 5% of the original purchase cost so should be much less than the tax saving

johnsav

the final payment is between 3% and 5%

im not sure what factors determine 3 or 5 though.

Its still a good deal whatever way you look at it!

Ive worked out that il pay back approx. £650 for my £1000 LOC, so its pretty good savings really. Plus is obviously alot easier to pay back a small amount each month rather than a big chunk all at once. [/quote]

Tranced

Thanks. That makes sence based on the 3-5%, if that's what it is.

What put me off was the cycle scheme FAQ website says:
"Typical savings are between 30% and 50%., but the actual amount you pay depends on your personal tax band, and the way your company runs the scheme."
"usually 12 months"
"The bike and goods remain the property of your employer until the hire period finishes, unless your employer uses finance; in this case the finance company will own the bikes during the hire period. At the end of the hire period you may be given the opportunity to buy the bike for a fair market value payment."

So as I saw it, a fair market value of of a £1000 bike after 12 months would be.... say £600-700. There was no way I was going to have to pay that in after a year just to have saved a bit of tax. Nowhere is the FMV rate suggested or defined on the site.

Also, "you may" be given the opportunity to buy back the bike. What??? Or you may not???? And what then? What if your co. decides to keep it as a "pool bike" and/ or charges a monthly/ weekly rental there after.

Nothing in the wording says they can't do that.

Perhaps wording on the site FAQ's could be a bit clearer as to what the FMV is.

Spider987

You could put that down as a acessorie.
We had one customer put his wifes bike down! and that got accepted.

gcwebbyuk

Yeah thats a good idea - buy a cheap £50 bike, and then have the frame as an accessory!

grumsta

Tranced, they have to say 'may be given the chance' etc because if they say you definately get it afterwards that makes the tax status different for some reason. Unless you work for complete swines, why would they want to keep the bike afterwards anyway?

Chaka Ping

Why don't you talk to your company HR or accounts department abotu how they're going to ruin the scheme, they can give you a better answer than people on the internet.

Tranced

Grumsta
Tax avoidance vs. tax evasion... OK. It's in the wording.

"why would they want to keep the bike afterwards anyway?" Ah... the difference between 1st & 3rd world. I've seen far worse. :twisted:

Tranced

Chaka...

how they're going to ruin the scheme

Typo or tongue in cheek....

Daz555

Tranced wrote:

Thanks. That makes sence based on the 3-5%, if that's what it is.

What put me off was the cycle scheme FAQ website says:
"Typical savings are between 30% and 50%., but the actual amount you pay depends on your personal tax band, and the way your company runs the scheme."
"usually 12 months"
"The bike and goods remain the property of your employer until the hire period finishes, unless your employer uses finance; in this case the finance company will own the bikes during the hire period. At the end of the hire period you may be given the opportunity to buy the bike for a fair market value payment."

So as I saw it, a fair market value of of a £1000 bike after 12 months would be.... say £600-700. There was no way I was going to have to pay that in after a year just to have saved a bit of tax. Nowhere is the FMV rate suggested or defined on the site.

Also, "you may" be given the opportunity to buy back the bike. What??? Or you may not???? And what then? What if your co. decides to keep it as a "pool bike" and/ or charges a monthly/ weekly rental there after.

Nothing in the wording says they can't do that.

Perhaps wording on the site FAQ's could be a bit clearer as to what the FMV is.

That is how the cycle scheme is set up at every company. However I know that at my company everyone was offered the chance to buy their bike at the end. The average cost of this across the company was about £20.

Remember you'll only have to pay its 'remaining fair market value'. Lets assume you are a 40% tax payer:

Bike - £1000. Take 41% off for tax and Ni means this bike will effectively only cost you £590 over the year. You will pay this over 12 months. Your company will then sell you a one year old bike at its remaining market value. You've already paid almost 600 notes so you would not have to add much more to that to own the bike outright.

Tranced

Daz555..... there, you see it's in the wording again...
Cycle scheme site says "fair market value" and you say "'remaining fair market value'". What you say makes absolute sense, but I do maintain their wording could be clearer.

Got poked in the eye by a mate on the weekend for moaning about the lack of retail at the cycle show. He pointed out it was a show not a faire. Take the words literally he told me...! Hmmm..

But yes, thanks for all the explanations.

Daz555

The wording is rubbish and I suppose all you can do is ask your company to clarify things to be sure.

When it comes down it of course the C2W scheme would not work unless there was a significant benefit to employees.

jayson

There was some talk of my company introducing the scheme but nothings been heard for a while now so i dont really know whats happening. After having my bike nicked from the place i could REALLY do with the scheme being introduced abit lively.

I was wondering though how much the average monthly payment would be from ur wages if u were given the top whack £1000??

Im presuming its probably different for individuals and/or companies but i'd like to get a ball park figure in my head if anyone can help.

grumsta

Depends whether your company is registered for VAT and how much tax you pay but something like 50-60 pounds a month after tax

jayson

Thats sort of what i had in my mind, cheers grumsta. It all comes down to whether my company can be bothered with helping the increasingly large group who now bike in out, going on previous experience im not overly optimistic though.

bells0

There is a calculator on Evans website. £1000 for a 40% tax payer is just under £50 a month.

Need to start my hunt for shops that will do me a Trek Fuel Ex8 and let me top up the difference over £1k!