Cycle to work monthly costs
BoardinBob
Posts: 697
Not commuting specific but I know a few folk have signed up for it and I've got a question about the monthly cost. Ignoring the vat issue, should the savings be the same regardless of which scheme your employer signs up for?
Based on the numbers on our intranet, a basic rate tax payer choosing a £1,000 voucher would see their take home pay reduced by £55.83 over a 12 month period. We deal with Halfords
If I put the same numbers into this site: http://www.bikeplanetuk.com/savings-calculator.php
It shows the monthly take home salary reduction as £47.52 a month :?
I've checked every increment of £100 for the figures from my company versus the numbers generated by that website and every time, the difference is 17.5% i.e.
£55.83 - £47.52 = £8.31
It seems as though my employer, or possibly Halfords, is adding on 17.5%
£8.31 / £47.52 = 17.5%
Seems very strange. I've yet to ask if they claim the vat back but if they are they're not passing it onto the employee. If they are then coupled with this 17.5% charge, if an employee took a £1,000 voucher the company could make £250 off them by reclaiming the vat on top of the charges. Plus they'll get more if the employee opts to buy the bike at the end of the agreement.
Anyone encountered anything similar?
Based on the numbers on our intranet, a basic rate tax payer choosing a £1,000 voucher would see their take home pay reduced by £55.83 over a 12 month period. We deal with Halfords
If I put the same numbers into this site: http://www.bikeplanetuk.com/savings-calculator.php
It shows the monthly take home salary reduction as £47.52 a month :?
I've checked every increment of £100 for the figures from my company versus the numbers generated by that website and every time, the difference is 17.5% i.e.
£55.83 - £47.52 = £8.31
It seems as though my employer, or possibly Halfords, is adding on 17.5%
£8.31 / £47.52 = 17.5%
Seems very strange. I've yet to ask if they claim the vat back but if they are they're not passing it onto the employee. If they are then coupled with this 17.5% charge, if an employee took a £1,000 voucher the company could make £250 off them by reclaiming the vat on top of the charges. Plus they'll get more if the employee opts to buy the bike at the end of the agreement.
Anyone encountered anything similar?
0
Comments
-
And what's more, it should be 15%
Thanks to Gordon Brown for saving the economy with that one.0 -
Yeah I'm assuming my employer haven't updated the figures yet but the 17.5% did seem like a coincidence.0
-
The calculator will base the figures on the company passing the VAT saving onto you, whereas the company hasn't probably done this, hence the 17.5% difference, though as stated above the figures should be recalculated for 15% now.0
-
I read the title of this thread and thought you were going to tell us how much you spent on bike stuff in a month. I "save" about £70 month by not buying a tube ticket - I spend £ that I didn't use to on breakfast and am always buying shit for my bike ££. Don't save any money but it's a lot more fun than the tube
0 -
It may depend on if your employer can reclaim the VAT.
Do you work for a charity, the public sector, an insurance company or one of the other miriads of organisations who are special when it comes to VAT?
Rufus.0
