C2W or 0% for 16 months

Lew barnett

Hey everybody!

I was looking at getting a bike through the C2W scheme. However, an Evans cycles has just opened up near me and they're offering 10% off bikes and 15% off accessories.

Now this may sound stupid (and probably is) but is it worth me using my credit card and buying it myself, or should I go through the scheme instead?

Tell me straight if I'm being stupid, I'm a newbie and I need to learn!

Chunkers1980

Tbh, buy a rockrider, 500 quid, better than most of Evan's' 800 quid machines.

Lew barnett

Is the rockrider a better spec than all the bikes upto £800 in Evans?

Chunkers1980

It appears so, at normal prices.

Lew barnett

Ok, thanks mate! I didn't think finding a bike could be so hard!

danlightbulb

And if you buy the rockrider through C2W you'll get it for £350. Its what I'm gonna do. New RR8.1 out very soon in new colours.

Lew barnett

My C2W scheme you have to buy from halfords and ive been put off them by the mixed reviews, so using the credit card may not save me money but I'll have a bigger selection of bikes.

danlightbulb

Halfords are fine just give the bike the once over when you get it. Voodoo Hoodoo got 5* reviews and its £450, through C2W about £300! Bargain.

Lew barnett

The voodoo hoodoo was the bike I wanted too. I know nothing when it comes to specs but when I saw the review on here it made my choice. I think I need to forget what ive read about them and just go for it.

danlightbulb

No matter where you buy a bike from it'll need some fettling after a few weeks riding, you have to learn how to do it all eventually.

Lew barnett

Yeah I've been looking at maintenance courses which will teach me the basics. Don't get me wrong, I can fix a puncture, but anything more than that and I'm lost!

cooldad

Plenty of stuff online, help here, plus the Parktools website has nice clear how to do pretty much anything.

Thewaylander

Actually be careful of cycle to work,

This tax year its lost it's VAT benefit, so you will only get a saving equal to your tax band, and since there is a payment at the end most bike shops will give you equal discounts.

I personally would be browing for a last years bike deal.

Lew barnett

Thewaylander wrote:

Actually be careful of cycle to work,

This tax year its lost it's VAT benefit, so you will only get a saving equal to your tax band, and since there is a payment at the end most bike shops will give you equal discounts.

I personally would be browing for a last years bike deal.

So if I could get a deal on last years model with a 10% voucher plus 15% off accessories. Would I be better off going the credit card route?

I've used the halfords scheme calculator and it seems that the monthly payments will be cheaper but I still won't actually own the bike at the end!

Briggo

Lew barnett wrote:

I've used the halfords scheme calculator and it seems that the monthly payments will be cheaper but I still won't actually own the bike at the end!

Best you read into it a bit more then, because you will, depends on how you do it though for timeframes.

I've just finished a years worth of payments and have opted to extend the 'lease', this will mean I actually save circa 25% on the RRP (if you don't do that the savings are minimal, as you end up paying 25% of the bike cost to buy the bike after 12 months, why would you do this?!?), however technically I won't own it till the end of the extended period but at the end of the day my company will never ever ask for the bike back, it's just a formality for the government.

Pointless beucracy.

danlightbulb

For a bike under £500, and a basic rate taxpayer, you'll save 32% off the selling price (20% tax plus 12% NI), so you'll get the bike for £340 paid over 12 months.

At the end of 12 months you have to pay 3% (less the VAT element). VAT is 20%, so you'll pay £500 x 80% x 3% which equals £12. You then get to keep the bike for another 3 years before you officially 'own' it but as poster above says its just the official line. For a bike > £500 the payment after 12 months is 7%, but the same rule applies.

So all in, a £499.99 bike would cost you about £352.

If you're a higher rate tax payer you'll save even more.

So you'd have to find a bike with around 30% discount for it to be similar to the C2W schemes.

anj132

Briggo wrote:

Best you read into it a bit more then, because you will, depends on how you do it though for timeframes.

I've just finished a years worth of payments and have opted to extend the 'lease', this will mean I actually save circa 25% on the RRP (if you don't do that the savings are minimal, as you end up paying 25% of the bike cost to buy the bike after 12 months, why would you do this?!?)

You don't have to pay 25% of the cost for the bike... that was the recommended amount as a fair value from HMRC (IIRC it being over £500, the percentage is lower for under £500). And in effect, you could argue the fair value is lower than this although it's unlikely.

So if your employee gifts it to you after 12 months then you have a benefit in kind and pay 20% of potentially 25% of the cost, which is an effective 5% of the cost.

Lew barnett

So what happens if I want to upgrade/sell the bike in the extended lease? Am I allowed to do that?

Lew barnett

anj132 wrote:

You don't have to pay 25% of the cost for the bike... that was the recommended amount as a fair value from HMRC (IIRC it being over £500, the percentage is lower for under £500). And in effect, you could argue the fair value is lower than this although it's unlikely.

So if your employee gifts it to you after 12 months then you have a benefit in kind and pay 20% of potentially 25% of the cost, which is an effective 5% of the cost.

So for a £500 bike I would pay £25 at the end of the 12month term and own the bike?

danlightbulb

anj132 wrote:

So if your employee gifts it to you after 12 months then you have a benefit in kind and pay 20% of potentially 25% of the cost, which is an effective 5% of the cost.

Assuming your employer would gift it to you. Mine won't and I guess many employers who go through either Cycle to Work or Cycle Scheme will simply follow the procedures of the provider.

Here are the final value payments:

http://www.clarkslegal.com/Article/701/Cycle%20to%20work%20scheme%20%20fair%20market%20value%20%20clarified%20by%20HMRC

I think these would be the actual payments for most employees who are dealing with a cycle provider 3rd party.

So the key figure is the 3% or 7% for 5 years of ownership, but actually paid at the end of 12 months.

Not sure why they don't offer 6 or 7 years and simply make no charge.

danlightbulb

Lew barnett wrote:

So for a £500 bike I would pay £25 at the end of the 12month term and own the bike?

Technically you'd be paying at the end of 12 months to extend the lease for another 4 years. However in reality there are no more payments and you won't have to give the bike back, so yes, its essentially owned, for all intents and purposes.

<£500, 3% payment. £500 or greater, 7% payment.

anj132

danlightbulb wrote:

Assuming your employer would gift it to you. Mine won't and I guess many employers who go through either Cycle to Work or Cycle Scheme will simply follow the procedures of the provider.

Here are the final value payments:

http://www.clarkslegal.com/Article/701/Cycle%20to%20work%20scheme%20%20fair%20market%20value%20%20clarified%20by%20HMRC

I think these would be the actual payments for most employees who are dealing with a cycle provider 3rd party.

So the key figure is the 3% or 7% for 5 years of ownership, but actually paid at the end of 12 months.

Not sure why they don't offer 6 or 7 years and simply make no charge.

Yeah assuming that and I suppose larger firms rather let a provider get on with it. Although I don't see why they shouldn't gift it considering they have saved the wages plus employers NI, bit greedy if you ask me keeping the bike afterwards! But then I guess they can't say they will gift it or sell at x price as that would then be a HP agreement. :roll: