Which cycle to work scheme?

kn0bby
kn0bby Posts: 78
edited May 2011 in Road buying advice
Hi Guys,

Sorry if this has been covered before but I did some seaches and nothing came up.

Basically I'm advising my company on which scheme to sign up for and I'm after some other peoples advice.

I see there are the following along with a few others.
http://www.cyclescheme.co.uk/
http://www.bike2workscheme.co.uk

Do we even have to use one of these schemes or can our company run it off our own backs?

Thanks

Knobby.

Comments

  • alfablue
    alfablue Posts: 8,497
    You can do it in-house, and it is much better for the company to do their own scheme. Cyclescheme charge the bike shops 10% so you can't get a discount price, you tend to have to pay RRP, or at many you have to pay an extra fee to the shop (£50, £100, 12% etc).

    Cyclescheme try to scare the employer to GIVE them the bikes at the end of the scheme, by exaggerating the issues with HMRC (which are really quite straightforward).

    Cyclescheme then ask the employee for £250 (on a £1k bike) to take ownership, or a £70 "deposit" so Cyclescheme retain the bike for 31 more months.

    The company just needs to pay the shop for the employees bike, do a salary sacrifice for the employee to cover rental payments, at the end, GIVE the bike to the employee, and declare a "benefit in kind" of £250 (on a 1 year old £1k bike) so they are taxed at 20%, 40% or 50% (£50, £100 or £125) appropriate to their tax bracket.

    Cyclescheme and the like don't organise the salary sacrifice, the employer does this and this is the main admin required. Other than that download some agreement forms (from the likes of Evans or Wiggle) and use them as a template for your in-house forms.
    If your company does it themselves then employees will get the cheapest deal and the greatest choice of bikes and shops.
  • kn0bby
    kn0bby Posts: 78
    Perfect, just what I wanted to hear. We are looking at doing it internally now. It's just a case of whether the company want to outlay the purchase price of the bike.

    Thanks.
  • alfablue
    alfablue Posts: 8,497
    kn0bby wrote:
    Perfect, just what I wanted to hear. We are looking at doing it internally now. It's just a case of whether the company want to outlay the purchase price of the bike.

    Thanks.
    To sweeten things for the employer, they save 12% (or current rate of employers' NI contributions) of the cost of the bike, so £120 on a £1k bike, and I don't fully understand this bit, but they save tax on the value of the bikes they "own" , so 20% on a £1k bike, so £200. So in effect they can make £320 per £1k bike, looks like a way for them to make a very good return on their investment!

    See http://www.dft.gov.uk/pgr/sustainable/c ... df/518054/
  • el_vino
    el_vino Posts: 64
    My company handles it themselves, it works out much better and we have negotiated a 20% reduction with a local bike shop on RRP for most makes. It is really straightforward, we have used some of the extra savings to insure the bikes on the company insurance scheme, bikes will be stolen so this is important.
  • alfablue
    alfablue Posts: 8,497
    El Vino wrote:
    My company handles it themselves, it works out much better and we have negotiated a 20% reduction with a local bike shop on RRP for most makes. It is really straightforward, we have used some of the extra savings to insure the bikes on the company insurance scheme, bikes will be stolen so this is important.
    That's brilliant! If a company was really serious about getting people cycling they could invest this money (potentially a 32% return!) to develop all sorts of cyclist friendly facilities, and the company insurance thing is a great idea to start with. Could add covered secure cycle parking near to the workplace entrance, showers and lockers, cctv maybe.

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