How does cycle to work actually work

crispyj

Instead of paying the bike off with my salary can i pay it off straight away if I have the amount of money needed in the bank ?

Thank you.

supersonic

No, it is a salary sacrifice/bike hire scheme. Full details are on their website.

ThePriory1978

If you have catch-up tv. Watch last nights Cycle Show program on ITV4. It describes how the Cycle to Work Scheme works.

Note, i would never usually recommend watching the Cycle Show. Its horrid.

nicklouse

http://www.bikeradar.com/gear/article/b ... eme-18360/

shigllgetcha

you could pay in one deduction though if you wanted

tarbot18

There are different cycle schemes depends on the one your employer sets up , with most you cant pay them off , mine is for a maximum of £1000 over 18 months and they then then lend me the the bike for a further 18 months which gets around any final payment issues . It will cost me £468 nuff said.....

The Rookie

The Cycle show described it about as badly as it could be described.

Many sources still quote a 30-40% saving but if he FMV guidelines are followed the saving is often -10%

RevellRider

The Beginner wrote:

Many sources still quote a 30-40% saving but if he FMV guidelines are followed the saving is often -10%

Only if you take the transfer of ownership at the end of the year. Cyclescheme do offer you the option to transfer the ownership to them for a further 3 years for 7% of the value on bikes over £500 as well. So decent savings can still be made

Andy 1974

Just watched the Cycle Show and my work (Royal Mail) does this scheme,yet we only get a total of £500,yet anybody I talk to gets £1000,anyone else just get £500?

bails87

shigllgetcha wrote:

you could pay in one deduction though if you wanted

You could, but you'd have to pay the whole lot out of one months pay, without the £1k deduction taking you below minimum wage.

If you've got the cash lying about it might work out better to got to a shop and haggle for an end of year discount.

benpinnick

Andy 1974 wrote:

Just watched the Cycle Show and my work (Royal Mail) does this scheme,yet we only get a total of £500,yet anybody I talk to gets £1000,anyone else just get £500?

The amount is set by your company. £1000 is the maximum a company can do without a consumer credit license - Royal Mail has a lot of employees, and since they have to offer it to all who qualify, that could be alot of money, hence the limit I suspect.

The Rookie

RevellRider wrote:

The Beginner wrote:

Many sources still quote a 30-40% saving but if he FMV guidelines are followed the saving is often -10%

Only if you take the transfer of ownership at the end of the year. Cyclescheme do offer you the option to transfer the ownership to them for a further 3 years for 7% of the value on bikes over £500 as well. So decent savings can still be made

Agreed, but it depends on what scheme you're on (or even if the company self administer)....

Andy 1974

Thanks for the replies.

shigllgetcha

The Irish system seems so much simpler. The company buys the bike, they save alittle on their part of the PRSI(like NI I guess).

They put it up as a gross deduction on your wages and you save what taxes and other charges you pay on your gross salary and then pay the net amount back as a salary surrender. They have no control over what discount you get. You can repay it anyway you want over the next 12 months

anj132

The Beginner wrote:

Many sources still quote a 30-40% saving but if he FMV guidelines are followed the saving is often -10%

Doesn't have to be transferred at FMV - you just pay tax on this via a P11D. So a 32% saving becomes a 27% saving. Or don't transfer ownership that year and reduce the FMV further the next year. Furthermore, this comes out of your tax code the following year.

benpinnick wrote:

The amount is set by your company. £1000 is the maximum a company can do without a consumer credit license - Royal Mail has a lot of employees, and since they have to offer it to all who qualify, that could be alot of money, hence the limit I suspect.

But they save on national insurance 13.2% plus they will save on capital allowances, surely the combination is greater than their cost of capital. So the more people they get doing it, the more they save.

benpinnick

Its not so much the actual cash, its the concept of having £5m worth of bikes on the books that would worry them. Actually, the cash would be nice too. Not everyone has £millions to spare on bikes.

anj132

Sorry late night post I wasn't thinking properly, they don't really save using capital allowances as this would have been offset against the extra tax paid due to not paying extra wages. :oops:
And given how many bikes there might be, this means full relief won't be realised until the ownership is transferred to the employee.

Yeah that I'm sure there is other reasons why they might have that cap