Ride to work scheme

stu100

Been reading about this and am i being thick??

You pay out £23 a month say out of your monthly pay for a £400 bike. Works out at at a £100+ odd off. Fine. But after 12 months the bike doesnt get transferred to you for tax benefit reasons. You can have the bike but at a cost of buying it off the the employer at the market value?
Wheres the gain?? as you still have to buy the bike at the end of the day on top of the money that has come out of your monthly pay. So i pay out £230 then pay another amount to get it transferred into my name.

pdw

The amount you pay will be HMRC's specified minimum "fair market value". For a £400 bike that'll be £72 after 1 year, or if you defer the payment until the end of 3 years, £32. So you're still ahead.

Depending on the scheme, you may or may not be restricted in which bikes you can buy. Commerical schemes like Cyclescheme charge retailers 10%, so retailers often won't give you the best possible deal.

stu100

Ah ok thats sounds better. Thanks. Im restricted to bikes at Halfords for my work but seen a good MTB thats currently £450 with a promtional code its £405 so the ride to work scheme looks like a no brainer if i only pay £72 at the end of the year! or even 3 years!

White Horse

I bet Halfords won't let you use the prmotional code AND the cycle-to-work voucher. I couldn't get my British Cycling discount as well as use the voucher.

inkz

The government have a list of acceptable disposal values here:
http://www.hmrc.gov.uk/manuals/eimanual/EIM21667a.htm

To get around it, my scheme make you pay back the bike over the first year and then at the end of the first year you 'hire' it for another 3 years. The 3 year hire cost just happens to be a refundable deposit which is conveniently exactly the amount you need to buy the bike at the 4 year value. (3% for bikes under £500 and 7% for bikes over £500).

At the end of the 3 year hire they use the refundable deposit to pay for the bike and transfer ownership to you.

On a £1000 bike (max you can get unless your employer has a license to lend money) you will have to pay a £70 deposit after the first year which then pays for the bike after the 3 year hire period.

So after all that basically your bike is paid for out of your Gross salary (saving will depend on your tax code) and you will need to set aside either another 3% or 7% for the end of year one (max £70).

Easy yes? lol.

twist83

White Horse wrote:

I bet Halfords won't let you use the prmotional code AND the cycle-to-work voucher. I couldn't get my British Cycling discount as well as use the voucher.

They did for me. I used Collect and Reserve with a 10% Voucher making the Boardman £450, also chucked a set of pedals in as well which brough it to about £493 ish. Went in collected along with a tube as well.