Company won't do C2W

jimilindley

Response to my suggestion as received from HR:

"The cycle to work scheme is something that we have looked into
introducing before. However, this is something that we are not in a
position to introduce, as the potential
costs of this could be significantly high.

We will continue to review Company benefits and if this changes"

Is this a cop out? Does anyone know if C2W actually costs the employer apart from in admin?

Cheers

Jim

Agent57

Cop out, IMO. Shouldn't cost them anything more than a bit of admin time. In fact, IIRC it will save them money because they're paying you less, so they pay less on employer national insurance contributions or something.

alfablue

It costs them in funding the purchase of the bikes upfront, however they make money (at least £121 per £1000), on NI contributions, and I understand the purchase of the bikes can be a tax right off. They can also make £150 per £1000 by reclaiming the VAT and (immorally, in my view) not passing this on to the employee. The admin costs are small, I think their only real cost justification is one of cash-flow, if they are really in a fragile position. Most companies will probably make money on the deal, my employer will have saved over £30000 in NI contributions since starting the scheme 2 years ago, that would cover any costs many times over.

davidmarsden

The problem as I understand is the initial investment is into the bikes as capital. Effectively the employer will have to pay for all the bikes as CASH to the vendor.

My company has 5500 people in the UK at present. They are going to offer the scheme but they need to secure the money from the budget for the upfront payment.

You can imagine how much that could be! At the moment not many people know our company is about to offer the scheme so I am keeping my gob shut to get in their first.

will3

I think apart from the initial outlay it should save them money (on the reduced NI contributions due to your salary sacrifice)

Agent57

Good point about cash flow/having to pay for the bikes up front. I hadn't considered that.

Slow Downcp

Depends how big the company is - if 20 people take up the scheme at even an average of £500 each, the £10k out of cashflow can be a problem to some companies.

jimilindley

Yeah I s'pose the initial outlay and admin would be enough, tight gits. They will use the recession as an excuse!

MonkeyMonster

Same boat mate - which is really annoying when your brother now has 2 bikes from it...

Monkeypump

So, how does this work for someone who is self-employed?

Are there still savings to be made? A self-employed friend has been advised by his accountant that the savings are negligible (when compared to a company-employed person).

Any contractors or self-employed folk out there who have done this?

MonkeyMonster

If you an employee of your own company then your company can buy it and you (in wages) will pay it off... Surely?

Slow Downcp

MonkeyMonster wrote:

If you an employee of your own company then your company can buy it and you (in wages) will pay it off... Surely?

Only if the company is limited and you're an employee. If you're a sole trader (or partnership) then your 'wages' are not taxed, but the profit of the organisation is.

TommyEss

But my company has, apparently, a billion USD in the bank, and STILL took lots of pursuading.

Got it in the end though, but yes, for a smaller company, or a company in a business with tight margins, it could be very tricky to secure the capital - particularly if they end up with more people than expected signing up (since they can't really discriminate people from the scheme can they?)

Also, loans are a bit harder to come by right now in these tough economic conditions tm[/b]

Agent57

TommyEss wrote:

particularly if they end up with more people than expected signing up (since they can't really discriminate people from the scheme can they?)

I assume a company could just put a limit on it. First-come, first-served, until the £10K (for example) budget has been bagsied.

TommyEss

Maybe - would be a bit like this car scrappage scheme then?

davidmarsden

I don't really think the company size is that relevant as even big company have great importance on cash, but it’s a matter of good budgeting. The scheme is very beneficial to the employer and employee at the end of the day; it must be otherwise the scheme would be pointless.

I know my company is part taking as it is part of its overall commitment to an employees well being. With the idea being, very corporate American, fitter employees make more effective and efficient employees. Perfect for sound bites on the stock exchange!

Slow Downcp

Agent57 wrote:

TommyEss wrote:

particularly if they end up with more people than expected signing up (since they can't really discriminate people from the scheme can they?)

I assume a company could just put a limit on it. First-come, first-served, until the £10K (for example) budget has been bagsied.

As it's a salary sacrifice arrangement, they can;t do this. It has to be offered to all employees, on the same terms etc. They can set a date limit I think though.

nigeve

I got this today from our HR dept (after over a dozen emails and generally making a nuisance of myself)…

This is being reviewed, along with other benefit packages that the company may be providing in the future.

The staff that have benefited from this so far did so whilst we were under the IAG ownership, and with us having new owners, it would need to be discussed whether this will continue/be included within the company benefit packages.

Sound to me like a giant ‘Stick it up yer butt’… I certainly can’t see us joining again soon which is really annoying… I guess the quickest way for me to get Hastings Direct to join would be to go out and buy a bike myself. That should ensure the scheme is offered to all employees within about 7 days.

:shock: