cycle to work scheme

ben_chesterfield

hello,

i am in the process of registering my company with cycle to work, one of my staff wants a bike, and i also want a bike. But the website only seems to advise members of staff how to get a bike.

how does the employer get a back through this? any advice or experience would be great.

Kind regards

Ben

cooldad

Aren't you legally a member of staff as well?

ben_chesterfield

cool dad,

yes legally i am, so if i just did it as if i am just a employee that should be ok?

i thought i would ask the question on here,

thanks

ben

cooldad

Don't see why not, but some legal eagle will probably disagree.

DIY where are you?

diy

here - but I'm struggling to see what matter of law is being discussed? Isn't this about getting them to send you the right forms? Personally if I was a small firm I'd talk to my LBS as they can do it all for you typically.

benpinnick

The scheme rules are as follows:

Only PAYE paying members of staff are eligible for the scheme - even as a director/partner etc. you are still eligible as long as you pay sufficient PAYE for yourself each year.
You must offer it to all PAYE employees if you offer it to one - you cannot be selective.
Employees whose salary sacrifice would drop them below NMW would not be eligible - including you.

If you want to PM me your email addy I will send you a set of sample forms.

benpinnick

PS - You do in fact have to cater for non-PAYE or NMW employees too, by having a loan bike scheme or similar, but everyone ignores that.

Thewaylander

And please aslo do the maths on the bike.

As now the VAT is charged to the end userof the bike, Basically now the savigng is so small your better off looking for a bargain at the bike shops and buying a last year model as asking for a discount

I did the math recently for some people at work and the savings are so minimal when you ahve such a limited buying raange, your better off ignoring it and getting a bike thats on sale from somewhere.

benpinnick

If you're doing it yourself, and not through a scheme then you can buy discounted bikes or anything you like for that matter.

anj132

ben_chesterfield wrote:

how does the employer get a back through this? any advice or experience would be great.

If you are operating the scheme yourself...
Saves on 'ers NI 13.8% and CT with capital allowances (assuming AIA not fully used) at 20% net of VAT. The overal effective rate is something along the lines of 30%.

There doesn't seem to be any VAT savings as there will also be output tax to pay on the salary sacrifice. This is assuming you are VAT registered.

At the end of the hire term (typically 12 months) if you were to gift the bike to your employee there is a small taxable benefit as well to consider. Employer paying Class 1A NI at 13.8% of the fair market value of the bike when gifted or 25% of this cost. Employee has 20% to pay on this 25%. On a £1000 bike that's £50 tax for the employee to pay and £34.50 NI the employee is to pay.

If you having someone else run the scheme then best check what they say you can save, probably along the same lines.

benpinnick wrote:

If you're doing it yourself, and not through a scheme then you can buy discounted bikes or anything you like for that matter.

That as well, so in theory you can get a decent bike in a sale and then go onto save more via operating the scheme yourself.

benpinnick wrote:

The scheme rules are as follows:

Only PAYE paying members of staff are eligible for the scheme - even as a director/partner etc. you are still eligible as long as you pay sufficient PAYE for yourself each year.
You must offer it to all PAYE employees if you offer it to one - you cannot be selective.
Employees whose salary sacrifice would drop them below NMW would not be eligible - including you.

If you want to PM me your email addy I will send you a set of sample forms.

Also this as well! Good guide here about it http://www2.dft.gov.uk/pgr/sustainable/ ... kguidance/ which is a little out of date for the VAT info but basically there is no VAT savings now.

As stated above re: directors - a lot of directors in small closed companies draw a salary at the NI threshold to avoid paying NI & tax so it isn't possible to operate the scheme. Probably best to have a quick word with your accountant who will know your situation a lot better.

oh, and the bike should mostly be used for travel to and from work....

bikerocks

Starting to see a pattern here, what was meant by the govmnt to be a simple scheme puts employers off and gives employees headaches. I work for a company that runs an 18month scheme (nhs,Scottish ambulance service) but there have Been threats that the scheme will end and payroll found it difficult to manage, etc,etc,etc Now the application forms have been removed on the intranet and paper copies are missing. All this to discourage workers applying. Previously a few co/workers managed to get a bike but even the savings were minimal. The government has to make this easier for all to take up.
:idea:

diy

My employer is with one of the big national schemes. I'm a 50% tax payer, so thought I'd take the risk. After all if it works for anyone it should work for my situation.

Bought a 1200 quid bike 1000 voucher 200 cash + processing fee. 1000 is vat free, so that covers the fee pretty much and meant I'd only be charged something like £960 gross, I think that is about £400 net thereabouts. Then the confusing bit. I have heard two versions from the scheme and the operator.

a) for a small fee (£50 i think) I can extend the lease another 18 months and be gifted the bike at the end without tax liability.
b) or I have to pay £125 tax at the end of this year

This bike is in the sales at about £920, so my worse case is this will cost £725 - A £200 saving, which is modest and nothing like what the scheme advertises. Particularly when it affects my pension contributions too (in a very small way).

It would make a big difference if our scheme was calendar year not tax year, because prices are tip top in april/may and rock bottom in dec/jan. Its all about timing.

I personally think they should scrap the scheme and just reduce VAT on bikes.

benpinnick

There are a lot of flaws in the system, but its not too hard to administer so its worth sticking at. In January, a new scheme called Workriders will launch which like the current ones offers administration on behalf of the companies, so makes it easier to 'accept' for employers, but its not charging 10% to the shop, meaning you can buy any bike that you want, whenever you want. Also, DIY - I expect that your company likes to do FY purchasing as it fits with budgets. Workriders offers the bikes on finance which costs the employer nothing overall, meaning your company could start to accept submissions for bike purchases more flexibly across the whole year?

bikerocks

Ben, sounds like a little improvement . Hopefully by then I will have found the application forms, lol.Seriously though if the govmnt are serious about promoting the green transport bill they have to go even further. I am returning to a bike after many years and the employers can make it difficult to facilitate a great idea, Healty staff,less abscences,positive attitudes etc,etc,etc. For diy; totaly understand the frustration, the scheme for us (18 month) ends and the management don't know if there is a final payment. My two work collegues are 15/17 months in and THEY still don't know. ITS A BIT OF A JOKE.

bikerocks

Sorry forgot; remember to declare it on you're year end P11D tax form for a "perk" offered by you're employer. Yeah right, it seems to be the employees doing all the work.

diy

its only a perk once you are gifted the bike.

Thewaylander

i would say the goverment is making it more awkward and pointless on purpose.

And this is because they can't police it, They can not make people use these bieks as commuter bikes. Alot of people by there new shiney MTB's on the scheme and never use this once to commute which bascically comes down to Tax evasion.

But instead of simply cancelly the scheme which looks bad there just making it pointless and unusable on the whole.

ben_chesterfield

hi all,

Many thanks for your input, sorry not posted sooner, been very busy at work.

sometimes i think i will just buy it through business as a business vehicle and get vat back,

I am a recycling company, so put a trailor on back to collect scrap computers

my email is recyclingdepot@gmail.com for the forms, many thanks

ive just been to my lbs, theres some great savings, but might see what the new year brings, prices might drop again when the 2012 comes out.

kind regards

Ben

benpinnick

Ben, Not in the office until the New Year, but if you can wait til then I will mail you the forms. That way you can do it al yourself and grab a bargain in the sales. I know a friend of mine is planning a pretty massive Boxing day sale at their 4 shops, I suspect other shops will be the same this year.

ben_chesterfield

hi ben,

thanks alot, yes there no rush.

i want to look around and get a good bike and a good price, im in no real rush.

only prob with me being 6ft 6, i can only have the xl frame so stock are low.

thanks

ben

bails87

bikerocks wrote:

if the govmnt are serious about promoting the green transport bill .

HAhahahahahahahahahahahahahahaha



hahahahahahahahaha!


Anyway, I bought a road bike through the scheme. A Ribble, which was the best value I'd have got anywhere, so even at full price, paying with cash it was better than anything I'd have got from an LBS, or even Halfords.

Then I saved NI and PAYE (no VAT savings for my employer) on it, paid £83 at the end of 12 months to take ownership of the bike, having saved around £200 on the cost of the bike over the year. So I was £117 up, not huge, but still, £117. Then consider the fact that it was essentially 0% finance for the year and although the benefits aren't as great as they're sometimes made out to be I still got the bike I wanted at a lower price, with easier monthly payments, rather than forking out £1k in a lump sum.

diy

Had I not found a good used bike, I was going down the Ribble on a voucher option. I think Ribble's are great, but they do get a mixed reputation. Also you mention the word Ribble to any LBS that stocks Spesh Tarmacs or Roubaix and they bore you to death talking about carbon fibre warps n' wefts for the next 20 mins.