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Government cycle scheme is a big con.

Simon514Simon514 Posts: 35
edited May 2013 in MTB general
when I signed up to the government cycle scheme, I thought I was going to save 40% through salary sacrifice, but it works out you only save 20%. What is the point? you can get the same discount rate in most cycle stores without the cycle scheme anyway.

Just feel screwed over by the government...AGAIN!

Anyone had any issue with this hypocrisy??....arrg rant rant rant!
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Posts

  • supersonicsupersonic Posts: 82,708 Lives Here
    It depends on many factors ie the tax you pay. I was unaware of a blanket 'save 40%' claim.
  • mattvmattv Posts: 992
    After a test case it has been decided that VAT must be charged on rental payments, effectively putting up prices by around 15%. Was a European decision....[/list]
  • bails87bails87 Posts: 13,317
    OP: Did you read the contract and literature/information associated with the scheme? Did you use the C2W calculator? Because that will tell you, down to the penny, how much it'll cost you.
    MTB/CX

    "As I said last time, it won't happen again."
  • benpinnickbenpinnick Posts: 4,148
    Actually there's no reason why you should get the 20% discount on top of a 20% off bike.
    A Flock of Birds
    + some other bikes.
  • my mate did the calculations when he did the c2w scheme a few years ago, £1000 for about £650, at the time. His wife went to get one now and £1000 bike now costs over £800, and when they asked no "bargains" were available on it. Think they just bought a 2011 Cube with for £650(£250 off if memory serves me) as its the end of season. But I suppose some people dont have the spare money, so at very least its a sight saving and interest free loan?
    2011 Orange 224 evo race
    2009 Orange 5 pro
    2008 Scott Scale 30
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  • aahjnnotaahjnnot Posts: 41
    Much as I love cycling and cyclists, I think the the whole C2W scheme is a massive fraud against the UK taxpayer. I'd be gobsmacked if anyone could find a real person who chooses to commute by bike because of this tax incentive - so why, in an age of austerity, can't we cyclists pay VAT and income tax like the rest of the population?
  • Andy BAndy B Posts: 8,115
    aahjnnot wrote:
    Much as I love cycling and cyclists, I think the the whole C2W scheme is a massive fraud against the UK taxpayer. I'd be gobsmacked if anyone could find a real person who chooses to commute by bike because of this tax incentive - so why, in an age of austerity, can't we cyclists pay VAT and income tax like the rest of the population?
    I think you'll find most cyclists do pay VAT, the only things cycling related that are VAT free are some food products and helmets.

    The Cyclescheme is not a fraud against anyone, it is an incentive to get more people out of cars and onto bikes, both of these have massive positive effects.

    More fraudulent activity is undertaken by large corporations dodging tax than a few thousand cyclists getting a tax free bike which will help improve their health and reduce the burden on the NHS
    2385861000_d125abe796_m.jpg
  • You don't *have* to use the scheme, if you feel you can negotiate a better price outside of the scheme then go for it! For me at least it was an easy way to get a well priced bike on a 0% finance deal. And I will NEVER cycle to work due to a number of factors.
    2011 Cannondale Trail SL 29er HERE
  • aahjnnotaahjnnot Posts: 41
    Andy B wrote:
    aahjnnot wrote:
    Much as I love cycling and cyclists, I think the the whole C2W scheme is a massive fraud against the UK taxpayer. I'd be gobsmacked if anyone could find a real person who chooses to commute by bike because of this tax incentive - so why, in an age of austerity, can't we cyclists pay VAT and income tax like the rest of the population?
    I think you'll find most cyclists do pay VAT, the only things cycling related that are VAT free are some food products and helmets.
    VAT can be reclaimed on bikes purchased under the cycle to work scheme. And of course the world would be a better place if more people commuted by bike - I just don't for a moment believe that the scheme does anything to encourage cycle commuting. In my view, the biggest help to cycle commuting that a government could provide would be a to require all workplaces above a certain size (25 people, perhaps) to offer secure cycle storage, shower facilities and drying facilities for camp clothes. And that's a requirement that would be cost free from a taxpayer's perspective.
  • Andy BAndy B Posts: 8,115
    Salary sacrifice arrangements will now be subject to value added tax (VAT) following a Court of Justice of the European Union (CJEU) ruling, HM Revenue & Customs has announced.

    From 1 January 2012, employers offering schemes such as cycle to work will have to account for the output tax based on the value of the salary surrendered by the employee in exchange for the hire or loan of a bicycle.
    2385861000_d125abe796_m.jpg
  • MonkeypumpMonkeypump Posts: 1,528
    This has been done to death - plenty of threads on here and elsewhere.

    If you can't be bothered to do the research - or at least read the t&c's - don't bother ranting.
  • aahjnnotaahjnnot Posts: 41
    Andy B wrote:
    Salary sacrifice arrangements will now be subject to value added tax (VAT) following a Court of Justice of the European Union (CJEU) ruling, HM Revenue & Customs has announced.

    From 1 January 2012, employers offering schemes such as cycle to work will have to account for the output tax based on the value of the salary surrendered by the employee in exchange for the hire or loan of a bicycle.
    I'd missed that - I wasn't in place when I last evaluated the benefits of C2W. About time, too, I say.
  • Andy BAndy B Posts: 8,115
    Why do you believe that it should be VAT applicable?

    The VAT on C2W will have a large effect on the uptake of the C2W scheme, cycle retailers will lose trade, some may go out of business in these financially insecure times & less people will be able to reap the health benefits that cycling has to offer which may well burden the NHS further costing the taxpayer more in the long run than the VAT gained back by taxing salary sacrifices
    2385861000_d125abe796_m.jpg
  • aahjnnotaahjnnot Posts: 41
    Andy B wrote:
    ... less people will be able to reap the health benefits that cycling has to offer which may well burden the NHS further costing the taxpayer more in the long run than the VAT gained back by taxing salary sacrifices
    An impecunious would-be cyclist can commute effectively on a £50 second-hand bike, and, for people worried about the cost of cycling, that will always be the cheapest route. But I fail to see why the taxpayer should subsidise a wealthy commuter who wishes to upgrade from, say, a £2,000 bike to a £2,400 bike.
  • cooldadcooldad Posts: 32,601
    aahjnnot wrote:
    Andy B wrote:
    ... less people will be able to reap the health benefits that cycling has to offer which may well burden the NHS further costing the taxpayer more in the long run than the VAT gained back by taxing salary sacrifices
    An impecunious would-be cyclist can commute effectively on a £50 second-hand bike, and, for people worried about the cost of cycling, that will always be the cheapest route. But I fail to see why the taxpayer should subsidise a wealthy commuter who wishes to upgrade from, say, a £2,000 bike to a £2,400 bike.

    Errrrr CTW limit is £1000.
    I don't do smileys.

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  • 97th choice97th choice Posts: 2,305
    Andy B wrote:
    Why do you believe that it should be VAT applicable?

    The VAT on C2W will have a large effect on the uptake of the C2W scheme, cycle retailers will lose trade, some may go out of business in these financially insecure times & less people will be able to reap the health benefits that cycling has to offer which may well burden the NHS further costing the taxpayer more in the long run than the VAT gained back by taxing salary sacrifices

    I doubt any of that, let's be honest how many C2W were actually used for the intended purpose?

    More likely that we may see an increase in finance offers on bikes, maybe dealer supported and a possible reduction in prices overall.

    Or, a shift away from the magical 1K price point...
    Too-ra-loo-ra, too-ra-loo-rye, aye

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  • bushubushu Posts: 711
    So I can buy a cheap unused bike in a couple of years with all these C2W bikes just taking up space once they never got round to going to the park on them ;)
  • Andy BAndy B Posts: 8,115
    Who says that commuters are wealthy? You are making wild guesses, you have no facts to base your ideas on

    You can only get a bike up to £1000 on the C2W scheme, a lot of companies limit the voucher too, our local Police force limit their vouchers to £600. Anything over £1000 requires a credit license

    A £50 second hand bike is going to be an utter piece of censored and within 2 weeks the owner will have left it to rot in the back of their shed and gone back to using other forms of transport

    The tax gained from taxing the C2W scheme will be like pissing in the ocean, it will be meaningless compared to the taxation dodging that large companies do. Why not have a go at them instead, they're taking an estimated £30 billion out of the UK economy by dodging tax

    Benefit fraud, 1.1 billion, why not have a go at your local crack head too whilst you're at it
    2385861000_d125abe796_m.jpg
  • cooldadcooldad Posts: 32,601
    Presume aahjnnot has no problem with the govt subsidising stockbrokers and bankers catching trains to the city?
    I don't do smileys.

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  • aahjnnotaahjnnot Posts: 41
    Andy B, trimming the C2W scheme doesn't preclude also trimming tax dodging by large companies or tackling benefit fraud. All three should be addressed.

    The £1,000 limit doesn't apply to all companies, and even £1,000 is far more than is needed to buy a bike that's good enough for commuting; it's certainly far more than most people would ever dream of spending on a bike. And to suggest that a £50 second hand bike would be 'an utter piece of censored ' shows incredible prejudice that indicates no-one should ever approach you for advice about a bike purchase. Would a £50 bike safely traverse Afan in the rain? Probably not. Would it be fit for a daily 5 mile commute? Almost certainly, given a little care and attention.
  • aahjnnotaahjnnot Posts: 41
    cooldad wrote:
    Presume aahjnnot has no problem with the govt subsidising stockbrokers and bankers catching trains to the city?
    I potentially have a problem with this too. Subsidies should always be challenged to ensure they meet their intended outcome. I suspect that rail subsidies do entice some people away from their cars, but I doubt if it's as many as is commonly believed. I also suspect that subsidised rail travel encourages some people to live further away from their workplace than would otherwise be the case, and, therefore, perversely tends to increase carbon emissions.

    The acid test is this: how many UK citizens cycle to work because of the C2W scheme, but would otherwise drive to work? I suspect that the answer is vanishingly few.
  • Simon514Simon514 Posts: 35
    edited August 2011
    Alright need your vote on this peeps....option 1,2 or 3?


    1.       Sign up to an extended loan period for an admin fee of 10% of the orginal voucher value;
    2.       Purchase the bike and equipment at the HMRC set market values i.e. 21% if the orginal voucher value greater than £500 and 16% if the voucher value is below £500; or
    3.       Return the bike; an admin fee of 10% of the orginal voucher value will be incurred.
     
    If we do not receive a response from you by Friday 12th August 2011 and you have not contacted us to arrange the return of the cycle and other equipment purchased, ownership of the said items will not transfer to you and the cycle and equipment will remain the property of Capita.
     
    As such, Xxx will need to report this to HMRC every year (until one of the three options is selected) on your P11D as a benefit.
     
    The amount reported on the P11D will be 20% of the original voucher value of the cycle and equipment, in accordance with the tax legislation on employee use of company assets. Without the paperwork or an agreement to one of the options, we cannot continue to treat the cycle as a tax free benefit.
     
    You will pay tax on the amount reported on your P11D at your marginal rate, and this will continue until one of the three options is selected.
     
     
    Kind Regards
     
    Cycle2Work
    Capita Business Services Ltd
  • bushubushu Posts: 711
    edited August 2011
    I've just had extra tax, paid back to me so i can buy myself a bike that i wouldnt normally have dreamt of parting with that kinda money, I'm not on top dolla or even a good wedge :( still cba with C2W but as said previously will still end up with someones unused C2W bike so win win for cyclists

    You need to do something positive with your time than the C2W tax 'scandal' as its not even a drop in the ocean to what you should be voicing your opinions about ;)
  • Andy BAndy B Posts: 8,115
    aahjnnot I have seen hundreds of 2nd hand £50 bikes, none of which were suitable for a 5 mile commute without spending a good chunk of cash on them to make them safe to ride, most are only fit for the scrap heap as the cost of repairs is far greater than the bike's value

    As for prejudice, all I can say is if you think I am prejudiced because of my opinion of a £50 bike you are very sadly mistaken & very misinformed with your views

    This is my commuter when I commute by bike

    3357832647_11c82ce564_z.jpg

    Anyway, as trolls go you're pretty poor at it. I'd not give up the day job
    2385861000_d125abe796_m.jpg
  • bushubushu Posts: 711
    That looks expensive from here Simon514.. think you should have read the small prints
    1 reason i cba
  • 97th choice97th choice Posts: 2,305
    10% admin fee for not taking the bike? what did you originally sign up to?
    Too-ra-loo-ra, too-ra-loo-rye, aye

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  • bambabamba Posts: 856
    I had a £1000 bike last year , which cost me £50 a month, just paid the valution payment of £70 to extened for 35 months, no more payments and just started a new one as well.
    1000 pound bike for £670 , whats the problem ?
  • RaymondavalonRaymondavalon Posts: 5,346
    Monkeypump wrote:
    This has been done to death - plenty of threads on here and elsewhere.

    If you can't be bothered to do the research - or at least read the t&c's - don't bother ranting.

    By far one of the best comments aimed at the OP, who's obviously had a hissy fit on the Forum and not bothered to respond to the great comments and feedback on his rant...
  • supersonicsupersonic Posts: 82,708 Lives Here
    £50 bikes - not enough for the consumer to buy new, with a warranty piece of mind etc, free servicing and something that is definitely going to work straight away and be reliable. Maybe if the buyer has a sound knowledge of bikes and is willing to put a lot of work in from the off - unfortunately £50 bikes that work reliably are few and far between and generally will have worn or semi worn components.

    We want to encourage people to take up cycling, not put them off.

    That said, I don't think anybody needs to spend more than £1000 on a commuting bike (unless they can provide a very good reason), and the scheme has been used by people who are definitely not commuting. But... if the government is keen to get us all fit, why limit to just commuters? The scheme is flawed in its implentation and what it is trying to achieve.

    If it is just about commuters and reducing cars, then I'd limit the scheme to £500 and only allow road bikes and hybrids.
  • The main reason I opted out of the scheme is my company would only alow you to go to one local bike shop the stock was limited, although they said they could order in at the RRP. Also had a £1000 limit. The up side of it all, the initial you can get bikes dirt cheap brung me bike into cycling. Ended up about £300 over the grand but got what I wanted not what I was given.
    Rideing a Canyon XC Nerve 6.0,

    Cheers Geordie.
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