Cycle to work scheme?

MrCraigBerry Posts: 15
edited October 2009 in MTB beginners
Hi guys,

Can somebody explain how this works, and if it would be beneficial to me?

I'm currently a student, with a part time job which I do around 30 hours a week, as a doorman. I have been with this company for about 2 years, in which I receive my wages weekly with a payslip and tax out goings pate and ni etc.

Would I be elligible for the scheme? What would I need to do, and how does it work?

Thank you very much.



  • nicklouse
    nicklouse Posts: 50,675
    "Do not follow where the path may lead, Go instead where there is no path, and Leave a Trail."
    Parktools :?:SheldonBrown
  • Thanks for that, however I am still abit confused?

    Would the payments for the bike come out of my wages, on top of my tax already?
  • nicklouse
    nicklouse Posts: 50,675
    First does the company you work for do a Cycle to work scheme?

    If not then you cant do it.

    as to your other question

    How it works

    Your employer buys the bike and ‘hires’ it to you until you’ve paid it off. You pay the full retail price of the bike through monthly instalments (salary sacrifice) taken out of your pre-tax and National Insurance pay. So there’s no Income Tax or National Insurance taken out on those payments. This translates to almost 50 per cent off a brand new bike, paid for over 12 months usually.
    "Do not follow where the path may lead, Go instead where there is no path, and Leave a Trail."
    Parktools :?:SheldonBrown
  • The money is taken out of your wages before you are taxed and in so you don't pay any tax on it. You also don't pay tax when you buy the bike so save again.

    On the down side most of the companies offering to do the Cycle To Work paperwork for your employer charge. For example one of the bigger ones charges 11% to use them. They don't charge it to you but rather the bike shop. In so the odds of getting any discount from the bike shop is slim.
  • bernmc
    bernmc Posts: 9
    Figures below are all made-up rubbish, but makes it easy to understand...

    Lets say you earn £10K per year, pay 50% tax (higher rate + NI (ish :wink: ), and want to buy a bike for £1000.

    Normally, you'd be paid your £10K, and then Gordon would take 50% tax (so £5000 in this case) to clean his moat. That leaves you with £5000. You then buy your bike for £1000, and you're left with £4000.

    With Cycle2Work, the money for the bike is taken out of your gross salary ie before you get paid and the tax man sees it. (You typically pay for the bike over 18 months, but we'll simplify again, so take it as annual). So your £1000 gets taken from your £10000 gross salary, leaving you with £9000. Gordon then takes his 50%, but now it's 50% of £9K - so £4500, leaving you with £4500.

    So you've spent the same amount on the bike, but under the scheme you're left with £4500 to spend, whereas out of the scheme you'd only have £4000 - you're £500 better off.

    As for discount, it depends on where you get the bike from. I got a £1000 voucher and bought through Halfrauds (yes I know!). They give an additional 10% of the value of the voucher (this is probably dependent on the agreement between my employer and Halfrauds) - so I actually had £1100 to spend. And the total of the boardman plus all the bits actually came to just under £1200 pounds.After a bit of smiling and banter, they knocked the extra cost off as well - so I've ended up with £1200 worth of bike and bits for around £590 taken over 18 months = 33 quid a month :shock: .

    It's a no-brainer if you're remotely interested in a bike and your employer is part of the scheme. I'm pretty confident that with the info from sites like this, I've bought decent kit and will be able to bypass any ham-fisted halfrauds bike setup (although our local lass seems to be quite good).


    Oh, and Gordon has less to spend on his moat and/or those benefit frauds! It can't really get any better!
  • handful
    handful Posts: 920
    I've just bought my second on Cycle 2Work, the first with Evans and this time Halfrauds. After an argument getting a GT Idrive 5 on a 20% off GT offer (£799)so actual cost to me over 12 months will be around £420 8)

    I'm selling my Avalanche at the moment on ebay and need to get £210 for me to have had a year's use for nothing!

    Can't be bad :wink:
    Vaaru Titanium Sram Red eTap
    Moda Chord with drop bars and Rival shifters - winter/do it all bike
    Orbea Rise