Government cycle scheme is a big con.

petejuk

Walkertalker wrote:

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.

This shows despite limitations to the scheme and a lack of consistency across the board, people are encouraged by the scheme to consider commuting by bike as a viable option. Given the benefits that can be had from a bicycle, I think 1000 pounds is appropriate. It should be viewed as not only transport from A to B but as a sport and leisure tool as well. Therefore it should be viewed as a long term investment for a healthier lifestyle.

S-M

IIRC our company has still not got around to asking for final value fees.

My mate has been buying bikes for the past 3 years on the scheme as has never had a final value payment, i suspect this might all change from next year though.

Personally i wanted the 2010 Boardman PRO HT but by the time i got around to getting one, they had just sold the last one, and the only others were stuck in Ireland somewhere, whil;e i was in the store, somebody else rung up asking for one

Hence i picked up the 2011 instead.

As far as i could work out, at its potentially worst, its pretty much an intrest free loan, great if you save even more money on it, if i only save 20% on it then the 1k price will be pretty much same same value as the 2010 bikes were before they sold out.

If i save more, then great!

Like i say, my mate at work has never had a final fee yet, and his last bike was a "last years" carbon road frame Boardman that iirc was ex display and he picked up for 1k

He commutes 16 miles per day on it 6 days a week, its been spot on for him and he saved a decent amount of pennies.

bails87

aahjnnot wrote:

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.

"I suspect" that the moon is made of old Beano comics and chewing gum. Doesn't mean it's true though.

Of course people take the mick, but plenty commute on their C2W bikes.

I've got a 15 mile commute, each way, and my £1k road bike is spot on for it. It might be a bit impractical over the winter, but I wouldn't want to be doing 5000 miles a year on a £50 piece of junk, if it was 5 miles then a decent fast hybrid would still be a sensible choice, and that's going to be >£500.

Daz555

It sounds like the best days of the scheme are over.

I got a grands worth of FSRxc (plus over £120 of accessories) for about £650. I pay enough tax as it is so have no problem getting a few quid back once in a blue moon!

Thewaylander

quattrojames wrote:

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.

And you sir are therefore commiting Tax fraud as you are not using the cycle on the scheme to cycle to work.

And the scheme has no max limit, it's down to the contracts that a company puts in place to manage the scheme, It's just that there is a standard fit contract for a £1000 limit available from the Cycle scheme, so this is by far the easiest value to offer from an internal admin point.

t0pc4t

The £1000 'limit' is down to any more and the company requires a credit license (I think)

I've done it twice and been very happy both times.

meanredspider

bamba wrote:

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 ?

I'm kinda surprised that you can have any more than one bike on lease at the same time. I guess there are situations where you can argue you need more than one bike to commute:
- bike - train - bike (where train co doesn't allow bikes)
- Bike (roadie) for warmer months and bike for winter months (with ice tyres) which is what I do anyway.

I do think the economics are getting shakier. There's seemingly always some sort of purchasing restriction (I couldn't buy the Boardman I wanted) and, with a 10% payment to the Scheme usually, sellers are reluctant to discount. Now that VAT is added and valuations are more realistic, there are more instances where you can find a better deal (discount, used etc) for cash.

gilesjuk

Thewaylander wrote:

And you sir are therefore commiting Tax fraud as you are not using the cycle on the scheme to cycle to work.

Yes and no. What if he was working at one branch of a company and then got transferred to another where the bike was no longer required?

(I'm not saying that is the case, but it's possible in some cases).

quattrojames

Thewaylander wrote:

And you sir are therefore commiting Tax fraud as you are not using the cycle on the scheme to cycle to work.

I'm not really sure how? I took part in a scheme I was eligible to, there is no stipulation that you 'have' to use the bike for commuting.

benpinnick

There is an explicit rule which states that to qualify for the tax break, at least 50% of miles on the bike myst be commuting. Theres no rule that says you must ride the bike though

Thewaylander

quattrojames wrote:

Thewaylander wrote:

And you sir are therefore commiting Tax fraud as you are not using the cycle on the scheme to cycle to work.

I'm not really sure how? I took part in a scheme I was eligible to, there is no stipulation that you 'have' to use the bike for commuting.

As ben said there is stipulation that 50% of the miles on it must be for commuting or it is a tax break.

And if you move it becomes a tax break and you have to declare it, Tax authority doesn't really care that you had a change in circumstances its jsut a taxable benefit to them

paulbox

Come on guys, the best thing about the scheme is getting new bikes past the Mrs...

I just need to find a way of getting a Yeti 66 on the scheme next year...

Northwind

t0pc4t wrote:

The £1000 'limit' is down to any more and the company requires a credit license (I think)

Aye, that's my understanding. Used to annoy me as I worked for a bank but they couldn't be bothered to do the paperwork to offer a higher limit.

Remember, critics, a big part of the benefit is that you're delaying payment- no better than a low APR credit deal but then there's not as many of those out there as there used to be.

Northwind

t0pc4t wrote:

The £1000 'limit' is down to any more and the company requires a credit license (I think)

Aye, that's my understanding. Used to annoy me as I worked for a bank but they couldn't be bothered to do the paperwork to offer a higher limit.

Remember, critics, a big part of the benefit is that you're delaying payment- no better than a low APR credit deal but then there's not as many of those out there as there used to be.

bilbo126

I warn people to tread carefully. And no it is NOT possible to calculate down to the last penny the actual cost through the scheme at the outset. I purchased a Brompton through the scheme 12 months ago including lights just under £1000. Deductions of £83.33 for 12 Months off gross salary (saving tax and national insurance). I have just paid the £70 fee for continued use of the cycle for 3 years (extended use) or else you pay nearly £300 to own it outright. The catch is despite being assured by telephone that I will not have to pay more the following greeted me after paying up my £70 which I thought was the end payments - "At the end of the Extended Use Agreement Cyclescheme will contact you and may offer ownership of the bicycle at the market value; the market value to be ascertained at the time in accordance with HMRC guidelines." So I have asked by e-mail "when will I own this bike" and no reply. I am not allowed to dispose of it in the next 3 years as it is the property of Cyclescheme. Just go pay up front or get a loan and forget this farce of a system.

anj132

Or don't use a scheme provider.

mrmonkfinger

Cyclescheme used to be a cracking deal, now less so.

ooermissus

bails87 wrote:

aahjnnot wrote:

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.

"I suspect" that the moon is made of old Beano comics and chewing gum. Doesn't mean it's true though.

I am sure that C2W has led to more people cycling to work (and cycling not too work as well). But I'd be amazed if the scheme is cost effective - lots of people buying bikes who already have them, and lots of money leaking away because C2W bikes are more expensive than non-C2W bikes (bigger profit margins, more admin etc.).

I'll take the tax break, but that doesn't make it a good idea.

Happyhiker

Apparently 65% of people who buy a bike through c2w scheme do actually cycle to work. Government figures, and that's counted as raving success.

I bought one through the scheme this year, I hated cycling but got one through the scheme anyway to cycle with the kids. No intention of cycling to work (18 mile) but as it turns out I love it( old bike was rubbish, new ones lots of fun).
So much so, me and a college are going to drive to work and then cycle home, just to what it's like. If its good, and not too hard I might even cycle in one morning ( if it's sunny and I get up early and I can be bothered).

The point being, it gets fat, middle age potatoes like me off their arses, and on to a bike, or a bike forum, at least. It's probably not meant for actual cyclist, their on bikes any way. ;-)

RogerW

Apparently 65% of people who buy a bike through c2w scheme do actually cycle to work. Government figures, and that's counted as raving success.

Do the figures indicate what proportion of that 65% didn't already cycle to work prior to taking part in the scheme?

stumpyjon

The scheme was good when you didn't pay VAT, avoided tax and NI and paid a nominal amount to own the bike at the end. 40% saving over list price was easily achievable. As they enforced the original rules it's really not a good deal anymore, especially if they properly enforce the fair market value of the bike at the end of the scheme.

jairaj

our work' s scheme is through Evans bike shop, after the first year the ownership transfers to Evans and them after 5 years they transfer over to you. I think they do it this way because the fair market value after 5 years is very very low.

The Rookie

Which, if challenged still gives you a benefit in kind that is taxable.

The stupidity is that they don't have to charge 1/12 the purchaase value as monthly lease, so the simple solution would be...
1/ Lease set at 1/24 of purchase value per month
2/ FMV paid at 50%
3/ You pay back that 50% each month which would be 1/24 of purchase value
4/ You pay 1/12 each month and it's yours after 12 months - so ruddy simple only accountants couldn't see it!

jairaj

The Beginner wrote:

3/ You pay back that 50% each month which would be 1/24 of purchase value!

Do you pay that as part of the salary sacrifice then? so you'd save tax and NI on the 50% FMV that you need to pay?

If yes, and I have understood correctly that means, you have paid the full amount of the bike cost back to your employer so they are happy. you have also gained by salary sacrifice so paid less tax and NI and effectively paid for 50% fair market value so its not a taxable benefit but at no extra cost.

So you are happy, employer is happy and government are happy? ermmm there must be catch somewhere?

herb71

I bought my MTB on cycle scheme.

Firstly, you should be able to use the scheme to pay for an already discounted bike. Negotiate the price first, then pay on the scheme. The retailer still sees the same money.

I bought a £750 bike. I pay back £62.50 per month before tax, so my final salary dropped by £36.35 as I am a higher rate tax payer (42% reduction).

At the end of the scheme I can continue to use the bike indefinitely free of charge. If I want to take ownership of the bike, which I need to do if I want to use the scheme again, I pay at HMRC rates. I will wait a further 3 years and pay back the required 7%. Therefore my total outgoing will be £487.50 saving me £262.50. Definitely worth doing in my opinion, and as PaulBox states, the main reason is to get a bike past the Mrs.

The main issue with the scheme for me, is that arguably the people who could make most use of the saving (standard rate taxpayers) don't save as much money.

thelonegroover

I think you'll find most if not all retailers will not discount and offer cycle scheme. The cycle scheme costs them 10%. In my experience it's one or the other.

milfredo

bilbo126 wrote:

I warn people to tread carefully. And no it is NOT possible to calculate down to the last penny the actual cost through the scheme at the outset. I purchased a Brompton through the scheme 12 months ago including lights just under £1000. Deductions of £83.33 for 12 Months off gross salary (saving tax and national insurance). I have just paid the £70 fee for continued use of the cycle for 3 years (extended use) or else you pay nearly £300 to own it outright. The catch is despite being assured by telephone that I will not have to pay more the following greeted me after paying up my £70 which I thought was the end payments - "At the end of the Extended Use Agreement Cyclescheme will contact you and may offer ownership of the bicycle at the market value; the market value to be ascertained at the time in accordance with HMRC guidelines." So I have asked by e-mail "when will I own this bike" and no reply. I am not allowed to dispose of it in the next 3 years as it is the property of Cyclescheme. Just go pay up front or get a loan and forget this farce of a system.

Exactly my experience and exactly the same figgures as well. I felt cheated to be honest but blame no one but myself.