Cycle to Work Scheme - emplyer taking the piss?

FOAD

Last year about 100 staff got bikes on the cycle to work scheme ( this one www.cyclescheme.co.uk) during the April window that they opened it up for.

Our final payment this year was 5% and not unreasonable, and essentially worked out as a 13th payment the same as the other twelve for most (ie. about £50 if you took the full £1000).

This year they have already said that the final payment will be 15%.

Does anyone run a cycle scheme here? I am getting the feeling that they are taking the piss in an effort to make a bit more money for themselves, but before I complain I want to know who pockets this final payment, the employer or cyclescheme etc.

£750 instead of £600 may seem like a good deal still, but when your employer hassles you to make sure you are riding to work, it is now closer to the edge as far as balancing a "cheap" bike with commitment to ride etc.

meanredspider

It might be to do with the Tax Man. Our employer got hassle from the Tax Man over "Fair Market Values" and was insisting each bike was valued. My employer decided this was too difficult: Tax Man 1 Healthy Lifestyle 0

They've since reinstated the scheme at a local level (dodging that tax office I assume) but it wouldn't surprise me if that's what's behind your employer's decision.

FOAD

Well I have emailed cyclescheme for their take on it.

The way I see it I can buy a bike on the scheme at RRP and save £250 total through tax breaks, but have bs from work about riding it or I can use £750 of my own money and pick and choose what I buy, wait for a bargain etc. and have no hassles whatsoever and stop my employer saving a bit in NI contributions.

I am confident that I could buy a bike from a shop or online at £750 when the RRP is £1,000 or even better spend that money on kit.

So by being daft I am discouraged from the cycle to work scheme because the "suit myself and pay the same" scheme has all the financial benefits and non of the hassle.

If I sound angry it's cuz I am. Only found out thirty minutes ago and I think it's stupid.

ketsbaia

I reckon 15% is a bit steep and veering into piss-taking territory.

E2a: It's the employer who pockets the moolah, btw.

alfablue

As far as riding to work is concerned, the rule is that at least 50% of the bikes use must be for commuting. You could ride to work only once and comply with that (if you ride at no other time). Your employer would have to spy on you out of hours to prove you weren't using it for 50%+, that's not going to happen. If they hassle you about that, they are asking for a grievance, its out of order.

Radioactiveman

Now I might be wrong but they could be in breach of the scheme, my understanding was that they couldn't state what the final value fee was as it would be classed as a tax benefit.

Taken from cyclescheme website http://www.cyclescheme.co.uk/employee,faqs.htm

What happens at the end of the hire period?

At the end of the hire period employees may be given the opportunity to buy the bike for a full market value, however this cannot be an automatic entitlement. The cost of full market value cannot be stated before or during the hire period as this could be considered a benefit in kind and therefore not be eligible for tax benefits. Many employers opt for Cyclescheme to take ownership of the bikes at the end of the hire term, in which case any offer sale to the employee will come directly from Cyclescheme.

rake

alfablue wrote:

As far as riding to work is concerned, the rule is that at least 50% of the bikes use must be for commuting. You could ride to work only once and comply with that (if you ride at no other time). Your employer would have to spy on you out of hours to prove you weren't using it for 50%+, that's not going to happen. If they hassle you about that, they are asking for a grievance, its out of order.

out of order given the purpose of the scheme? i think not. whats really taking the wewe is this scheme existing at all. like the well off new car buyers discount scheme. how one sided was that.

FOAD

rake wrote:

out of order given the purpose of the scheme? i think not. whats really taking the wewe is this scheme existing at all. like the well off new car buyers discount scheme. how one sided was that.

It didn't take long did it....

Thanks for your less than useful post, now go troll somewhere else.

8 guys and girls at my small branch of the company took up road cycling last year purely due to the scheme. We are all a lot fitter, and dare I say it happier, plus have a healthy hobby to pursue in our own time as well.

The good old tax payer gets very few benefits whilst paying the way for those who don't wish to pay any and subsidising others who pay less.

Surely the only mature adult that would begrudge such a scheme would be a tax man if he was on commission.

rolf_f

FOAD wrote:

rake wrote:

out of order given the purpose of the scheme? i think not. whats really taking the wewe is this scheme existing at all. like the well off new car buyers discount scheme. how one sided was that.

It didn't take long did it....

Thanks for your less than useful post, now go troll somewhere else.

8 guys and girls at my small branch of the company took up road cycling last year purely due to the scheme. We are all a lot fitter, and dare I say it happier, plus have a healthy hobby to pursue in our own time as well.

+1. I pretty much decided that, if work ran C2W in 2008, then I'd get a bike and start riding again (and, if it didn't, I wouldn't).

It did and I bought a MTB. I cycle to work on it every day. So far this year I have ridden 1600 miles and cycled over Hardknott and Wrynose passes. If it hadn't been for C2W, that might never have happened.

rake

do you go to work on it?

markos1963

Hmmm if my company wants to charge me 15% for the final payment then they can have the bike back. Much as I like it(Boardman Comp SC) its not going to be worth it. They had the cheek not to take off the VAT even though they are registered and lump a £20 surcharge for 'administration' which I managed to get an unofficial admission that it was to cover interest on the money they had to borrow to buy the bikes

altitude10

I bought mine on c2w scheme rode it plenty of times to and from work (although i have used the train for part of the journey on the way in....if thats ok with you rake), paid 5% to buy but,....I think you will find the final payment is either to buy or dispose of! Which kind of does beg the question of value, I mean why would you dispose of something with value?

doyler78

altitude10 wrote:

I bought mine on c2w scheme rode it plenty of times to and from work (although i have used the train for part of the journey on the way in....if thats ok with you rake), paid 5% to buy but,....I think you will find the final payment is either to buy or dispose of! Which kind of does beg the question of value, I mean why would you dispose of something with value?

Disposal of an asset is an accounting term. It merely refers to value the asset can be disposed off by the organisation which doesn't mean dumped ie sold on. The value which you have mistaken it for would normally be referred to scrap value however it is still techinically a disposal ie income on sale.

doyler78

MP's expenses!

rake

altitude10 wrote:

I bought mine on c2w scheme rode it plenty of times to and from work (although i have used the train for part of the journey on the way in....if thats ok with you rake), paid 5% to buy but,....I think you will find the final payment is either to buy or dispose of! Which kind of does beg the question of value, I mean why would you dispose of something with value?

its not a question of if its ok with me. its weather or not you are comitting fraud. i paid tax on my bike and dont use it for work.

rolf_f

rake wrote:

altitude10 wrote:

I bought mine on c2w scheme rode it plenty of times to and from work (although i have used the train for part of the journey on the way in....if thats ok with you rake), paid 5% to buy but,....I think you will find the final payment is either to buy or dispose of! Which kind of does beg the question of value, I mean why would you dispose of something with value?

its not a question of if its ok with me. its weather or not you are comitting fraud. i paid tax on my bike and dont use it for work.

Why get into a lather about it anyway? All sorts of tax breaks etc that may or may not go to deserving cases - I don't have kids; why should I subsidise tax breaks for parents? In the great scheme of things, this is chicken feed.

Even if I didn't use my bike for commuting, the plain fact is I wouldn't have bought the bike in the first place without the scheme (so the Government didn't lose any tax income from that transaction) and getting into this new hobby, via C2W has caused me to spend a lot of money in other bike kit, in travelling around the country to do sportives etc. Ultimately, the government has invested rather wisely in allowing me a cycle scheme bike.

rake

thats great.enjoy it. just pleased you paid less tax than me while probably earning more.

alfablue

rake wrote:

alfablue wrote:

As far as riding to work is concerned, the rule is that at least 50% of the bikes use must be for commuting. You could ride to work only once and comply with that (if you ride at no other time). Your employer would have to spy on you out of hours to prove you weren't using it for 50%+, that's not going to happen. If they hassle you about that, they are asking for a grievance, its out of order.

out of order given the purpose of the scheme? i think not. whats really taking the wewe is this scheme existing at all. like the well off new car buyers discount scheme. how one sided was that.

Care to post a coherent message?

It is out of order for employers to harass employees when there is no purpose in them policing the use to which the bike is put. The employer does not lose regardless of what proportion the bike is used for work, they have no legal duty to police the use of the bike, they should not harass staff about anything, to do so is likely to breach employment law. If you resent the fact that people have access to the scheme, then I think you are a very sad little guy :?

FOAD

I rode 2,000 miles April to Sept last year on my C2W bike, all but about 500 were to work. I then purchased a S/S bike for the winter and rode another 2,000 plus commuting over the winter, leaving the C2W bike in the garage for all but the nicest of days.

I hope that is enough for you Rake you silly little boy.

I think replying to Rake further is a pointless excercise and you are just feeding him. He is clearly a bitter little man for some childish reason.

alfablue

markos1963 wrote:

Hmmm if my company wants to charge me 15% for the final payment then they can have the bike back. Much as I like it(Boardman Comp SC) its not going to be worth it. They had the cheek not to take off the VAT even though they are registered and lump a £20 surcharge for 'administration' which I managed to get an unofficial admission that it was to cover interest on the money they had to borrow to buy the bikes

Whilst they also make £120 per £1000 loaned in reduced employers NI contributions (added to the £175 they make on the vat!). Seem like a greedy bunch of bar stewards, they probably resent employees getting any benefit. Is rake your employer?

doyler78

FOAD wrote:

I rode 2,000 miles April to Sept last year on my C2W bike, all but about 500 were to work. I then purchased a S/S bike for the winter and rode another 2,000 plus commuting over the winter, leaving the C2W bike in the garage for all but the nicest of days.

I hope that is enough for you Rake you silly little boy.

I think replying to Rake further is a pointless excercise and you are just feeding him. He is clearly a bitter little man for some childish reason.

The scheme is far from perfect therefore to believe that everyone will be excited by a scheme which is by design discriminatory is pure fantasy. If the government is truly interested in getting more people cycling more then there is much more that it can do.

Let's hope you are not self employed, or earn the minimum wage (or close to it) as you will have no access to this scheme it all. Let's hope you are not a tax paying public servant as you will probably not get the benefit of VAT reclaimation. Let's hope you are not lower rate tax payer as perversely the greatest savings are for those employed in the private sector who pay higher rate tax (of which the vast majority of the working population are not). Let's hope you are not hoping to rely on that five year or lifetime warranty that came with your bike because you are a third party owner once you have made the final payment and therefore not entitled to make warranty claims.

When you entered into the scheme you should have been made aware of what the scheme was and what it entails. The value of your bike should be fair market value and that value should be determined by averaging several different valuations. You can lambast whomever you like for their views however that is the scheme you signed up to. I suggest you shouldn't ask questions on public forums if you do not want to hear a range of views.

bendertherobot

Let's assume a £1000 bike over 18 months.

Let's assume that fair market value to be £500.

Let's assume there's a £120 fee to the operator.

So £1620 "paid" all in.

That's 90% APR.

glauciaregina9

Re. the original post, It does seem odd to increase the final payment to 15% to keep the bike.

I've been toying with signing up to my employers C2W scheme, and the way I always saw it was: after 12 months, the company is not going to want a load of used bikes on it's hands, therefore it's in their best interest to offer an enticing %age - i.e. 5 - just to get them off the books.

It's almost worth turning down the 15% offer, in the hope they reduce it when they realise they've still got a used bike to get rid of somewhere, somehow...

Overall, the C2W schemes are a great idea. Clearly not everyone is happy with their employers take on it, but there's no denying there are lots of newbie bikers out there because of it. Got to be a good thing

crimsondynamo

I have to say the uncertainty inherent in this scheme (compounded if you don't entirely trust your employer), prevented me or any of my former colleagues for taking "advantage" even though a scheme was technically in place.

Would a simpler and fairer way of doing it not be to make complete bikes <£1k vat free, with individual components and bikes >£1k at half VAT?

bendertherobot

The easiest thing to do is keep it. Keep it for years then get a market value which shows the bike to be worth 50p.

amaferanga

glauciaregina9 wrote:

Re. the original post, It does seem odd to increase the final payment to 15% to keep the bike.

I've been toying with signing up to my employers C2W scheme, and the way I always saw it was: after 12 months, the company is not going to want a load of used bikes on it's hands, therefore it's in their best interest to offer an enticing %age - i.e. 5 - just to get them off the books.

It's almost worth turning down the 15% offer, in the hope they reduce it when they realise they've still got a used bike to get rid of somewhere, somehow...

Overall, the C2W schemes are a great idea. Clearly not everyone is happy with their employers take on it, but there's no denying there are lots of newbie bikers out there because of it. Got to be a good thing

My employer offered us the option of either paying 10% to keep the bike or paying 10% as a charge to dispose of the bike. Either way it had to be paid.

alfablue

Would a simpler and fairer way of doing it not be to make complete bikes <£1k vat free, with individual components and bikes >£1k at half VAT?

Yes it would be simpler, though the EU rules on VAT might prohibit this, other EU countries would probably argue that we were allowing our bike importers and retailers to compete unfairly. The bike to work initiative is based on the computers for workers scheme, so I presume that was considered to be a success and they did little but bolt on "bike". I really believe the intention was to create a simple to administer (which it is) tax break to boost the uptake of healthier, more environmentally friendly commuting (and leisure).

The scheme does have uncertainties, but with an employer that isn't out to shaft the workers, it seems to be very successful. Cyclescheme were the uk's fastest growing company last year (http://www.bikebiz.com/news/31523/Cycle ... ng-company) so something is obviously working. You hear very few complaints given the huge uptake of the scheme; complaints are usually based on the restrictions ("why can't I add my own £££'s"; "why do I have to use Halfords" etc), or related to the few employers that begrudge offering the scheme so look for all sorts of problems and negatives that the vast majority of employers don't seem to find.

rolf_f

doyler78 wrote:

Let's hope you are not self employed, or earn the minimum wage (or close to it) as you will have no access to this scheme it all. Let's hope you are not a tax paying public servant as you will probably not get the benefit of VAT reclaimation. Let's hope you are not lower rate tax payer as perversely the greatest savings are for those employed in the private sector who pay higher rate tax (of which the vast majority of the working population are not). Let's hope you are not hoping to rely on that five year or lifetime warranty that came with your bike because you are a third party owner once you have made the final payment and therefore not entitled to make warranty claims.

Of course it is far from perfect and one of the biggest disgraces is that not all public organisations offer it. But nothing is perfect anyway. Of course higher rate tax payers benefit most; a percentage discount on a higher rate always gives a bigger discount. They are still paying more in tax than you or I though (though probably not enough more!).

As for the warranty - my Orange is registered to me as the original owner. I would have no problem at all claiming on the warranty.

@Markos1963 - you may have been stuffed a bit by your employer on B2W but, given that you've had to pay x amount anyway, are you really saying that you don't think your bike is worth 15% of the purchase price to keep. Assuming you have looked after it, I'd certainly give you the £150 max for a one year old Boardman. It might be that with the extras, the scheme as a whole wasn't worth the bother for you but the final payment surely is?

Wamas

I bought a bike 2 years ago with the C2W Scheme, for a 5 mile commute each way to a clients office.
I paid the 12 months installments, and my employer asked for nothing at the end, as far as they are concerned, the bike is mine.
I now commute 30 miles twice a week to my main office (as well as social use), I am currently using the scheme to buy a second bike, again 12 months installments, no fee at the end.

Three of us who cycle to work asked if we could have a shower installed, the MD said sure, at a cost of £7k. He is now thinking about buying a bike.

As for the cycle scheme, the more people who cycle, the less traffic on the road, so less money towards road repairs, and NHS healthcare due to increased health and welfare.

FOAD

Just as a refresh, I am the OP.

Yes I am willing to read other people's views, but Rake's was just plain trolling.

Ultimately, my employer makes money out of me having a bike on c2w, the bike is fully paid for by me over 12 months and the only loser is the tax man and because the goverment introuduced the tax break then even he has to be content.

For there to be a charge at the end for the fair market value of the bike is kinda daft (mine could probably fetch £400 on ebay) as it has already been paid for by me once, so a minimal 5% is acceptable but in reality only lining someone's pocket. But 15%is just taking the piss.

And as for those whining on here about "it's alright if your a higher rate tax payer, it's alright if you earn enough" etc. Christ, we could harp on about what's unfair in life for ever, whether it be scummers from council estates getting a brand new Audi S3 for £1,000 to ferry their handicapped mum around in on Motability for 3 yrs or whatever.

I asked for an opinion on the final payment, what the rules were and who got the money. I am sorry if I upset people by being intolerant of people who have no interest in answering the questions.

bendertherobot

FOAD wrote:

Just as a refresh, I am the OP.

Yes I am willing to read other people's views, but Rake's was just plain trolling.

Ultimately, my employer makes money out of me having a bike on c2w, the bike is fully paid for by me over 12 months and the only loser is the tax man and because the goverment introuduced the tax break then even he has to be content.

For there to be a charge at the end for the fair market value of the bike is kinda daft (mine could probably fetch £400 on ebay) as it has already been paid for by me once, so a minimal 5% is acceptable but in reality only lining someone's pocket. But 15%is just taking the wee-wee.

And as for those whining on here about "it's alright if your a higher rate tax payer, it's alright if you earn enough" etc. Christ, we could harp on about what's unfair in life for ever, whether it be scummers from council estates getting a brand new Audi S3 for £1,000 to ferry their handicapped mum around in on Motability for 3 yrs or whatever.

I asked for an opinion on the final payment, what the rules were and who got the money. I am sorry if I upset people by being intolerant of people who have no interest in answering the questions.

Anyone know the situation with tax if the employer sells the bike AT the fair market value?

Let's assume a £500 sale. Is the employer liable to account for any profit to HMRC?