NHS cycle to work

mask of sanity

Does anyone know what shops you can use with the NHS cycle to work scheme? Looking at getting a tourer for JOGLE this year.

Cheers.

mask of sanity

Also, what happens at the end of the year? Do you own the bike or do you have to make a full payment for it? If it's the latter then surely it means you're paying more for it in the long run?!

teulk

You wil probably need to contact your HR department, it could be CycleScheme, Halfords or possibly Ride2Work.
How much you pay at the end of the hire period depends on how much the bike was. The amount you pay is minus Tax and National Insurance, however it will look like you are paying more when you look at your payslip as it is deducted before you pay tax / national insurance.

So to put it simply if you earned £1000 per month and say the monthy deduction for the bike was £50, you would only pay tax and national insurance on £950 so you pay less tax and national insurance overall.

The price you would pay on a £1000 bike at the end is 25% = £250. However depending on your employer you may have to pay the full £250 or only a percentage of it i.e. what ever your tax rate is, so if you pay 20% tax = 20% of £250 = £50. My employer uses the latter so i only paid £50 as my final payment.

moonshine

unless you are a higher rate (40%) income tax payer, then IMO it is unlikely to be worth the saving as the NHS are not VAT registered, therefore you cannot calim back VAT, which negates 20% of the saving...

ny the time you pay back the salary sacrifice & £70 / £250 FMV payment, it all but wipes out any saving...

look at it as a interest free loan at best... i wouldn't do it again....

navrig

moonshine wrote:

unless you are a higher rate (40%) income tax payer, then IMO it is unlikely to be worth the saving as the NHS are not VAT registered, therefore you cannot calim back VAT, which negates 20% of the saving...

ny the time you pay back the salary sacrifice & £70 / £250 FMV payment, it all but wipes out any saving...

look at it as a interest free loan at best... i wouldn't do it again....

Correct about the VAT however some schemes allow you to pay an admin fee which means they retain ownership of the bike for a further 3 years at the end of which HMRC regard the residual value as insignificant and hence there is no taxable benefit in kind. The admin fee of a £1000 is about £70.

The downside is you cannot sell the bike until you have had it for 4 years.

davem399

moonshine wrote:

.... as the NHS are not VAT registered....

I worked for a consortium of 5 NHS Trusts until last year, and they were all VAT registered, as I had to obtain the Trust's VAT registration numbers for claiming relief on services purchased. I'm not sure if this helps in purchasing bikes on the ride to work schemes.

moonshine

Navrig wrote:

... schemes allow you to pay an admin fee which means they retain ownership of the bike for a further 3 years at the end of which HMRC regard the residual value as insignificant and hence there is no taxable benefit in kind. The admin fee of a £1000 is about £70.

The downside is you cannot sell the bike until you have had it for 4 years.

thats the £70 / £250 FMV figure i was talking about...

the £70 is to extend the "lease" for a further 3 years... the £250 is to "own" the bike.
I think both options are scandalous.... especially the latter option, bearing in ming that you have already paid approx 65% of the full value from your salary already.

The £250 so called "FMV" doesn't seem to ring true, given that tou iwill have already paid £650ish from your salary already... do they think that the bike is worth £650 plus the £250 after a year?

Local Goverment, Central Government, agencies such as Environment Agency & SEPA (Scottish Environment Protection agency) and NHS employees cannot reclaim the VAT element, which seriously erodes any potential savings.

go in with your eyss open as to whether it represents a fair deal... I wouldn't touch it again.

mask of sanity

So basically, employee's of the biggest employer in the UK are unlikely to benefit much from the scheme?! Makes sense...

The only advantage I can see is that I wouldn't have to pay anything up front.

mrobbie

I'm confused as to why it is not a good deal... My work is with cyclescheme and the proviso is that you have to buy the bike at the end of the 12 months.

So, £1000 bike, minus VAT and the tax and NI savings, means that I "save" 51% so the rental cost being £490 (paid over 12 installments).

Then, I need to pay 25% FMV to buy the bike, being £250

£490 rental + £250 FMV = £740 for a £1000 bike.

I save 25% compared to walking into the shop and buying it.

navrig

mrobbie wrote:

I'm confused as to why it is not a good deal... My work is with cyclescheme and the proviso is that you have to buy the bike at the end of the 12 months.

So, £1000 bike, minus VAT and the tax and NI savings, means that I "save" 51% so the rental cost being £490 (paid over 12 installments).

Then, I need to pay 25% FMV to buy the bike, being £250

£490 rental + £250 FMV = £740 for a £1000 bike.

I save 25% compared to walking into the shop and buying it.

And for our scheme we can extend the lease for 3 years so the actual cost to me for a £1000 bike is:

£490 + £70. £560. (spread over 13 months)

My eyes were fully open when I ordered my bike at Xmas.

bracknelldave

take a look at the following nhs webpage, NHS specific scheme

http://www.nhsbikes.co.uk/hci.html

thinbo

each trust independently arranges their own cycle to work scheme. This means that there is no standard NHS c2w scheme. My employing trust went through wheelies.co.uk, I know that neighbouring trusts using different ones like cyclescheme.

With the wheelies one you are tied to their online shop and can't go to your LBS, whereas cyclescheme is designed so you can go to your local independent LBS.

I would suggest you email as many people in HR/payroll as you can and ask for details (the majority won't have a clue about it), you'll hopefully eventually get to someone who knows the crack who replies with some useful information. Also ask around colleagues to see who's used it in the past, and who they contacted. Fliers sometimes come round with payslips.

It is not as good a deal as it used to be due to the final payment. My final payment is almost due, when I started on the scheme this figure looked like being less than £50, now it's looking like being over £150 (gross) thanks to the tax/law changes, so that has seriously dented the potential savings.

As mentioned above, it's best now to view it as an interest free loan rather than something you can save some serious cash on with the recent changes. I wouldn't do it again, not through the current scheme in this trust anyway.

I'd sit down and do the maths, if it seems like a good saving go for it. The other thing to bare in mind is that in most c2w schemes the money paid is usually the full RRP of the bike. So if you can find a good discount somewhere (e.g. on a 2010 model) to buy a bike outright yourself, it might work out almost as cheap, but without the hassle factor.

Pat Murray

mrobbie wrote:

I'm confused as to why it is not a good deal... My work is with cyclescheme and the proviso is that you have to buy the bike at the end of the 12 months.

So, £1000 bike, minus VAT and the tax and NI savings, means that I "save" 51% so the rental cost being £490 (paid over 12 installments).

Then, I need to pay 25% FMV to buy the bike, being £250

£490 rental + £250 FMV = £740 for a £1000 bike.

I save 25% compared to walking into the shop and buying it.

Or alternatively you can pay £1 and take the taxable benefit hit on the FMV (£250 -£1= £249) the tax on which for a BR payer would be £50 total paid £541 - even better.

kingrollo

I work at the NHS - but got in before the changes - so it was worth it.

We had an internal email come round since - advising us of the option to extend the loans - then the FMV is reduced. Not aware of any extra payment to do this. Cyclescheme will be able to answer your questions though