Cycle to work scheme questions???
Benz carrera
Posts: 146
Hello I'm thinking of doing the cycle to work scheme is this a good idea and what are the payments like each week and how much can I have? Thanks
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I don't do smileys.
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Parktools0 -
Cheers mate but it don't say nothing about payments and how much if I had I.e £1000 what is the best bike shop in the West Midlands?0
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Make sure you know which scheme your company deal with. Halfords? Cyclescheme? Ride to Work? - your bike choice will be limited to whatever your particular dealer stocks. Although am fairly sure Halfords scheme is (or certainly was) able to get other bikes (possibly through leisure lake bikes).
once you choose the bike, then get the voucher for that amount + add a bit to cover other stuff you may need such as a lid, hydration equipment, pump...
if you were to take a grand, then the amount would be 1/12* 1000 per month. It's straightlined over the year. It comes from your gross salary, pre tax. Therefore you reduce your gross salary and save the tax on that amount.
However - the tax man will reclaim some of this. at the end of a year, the bike is deemed to be a benefit to you....on a grand bike I think it's 25% value....therefore deemed to be a benefit of £250. You will pay tax on that as a benefit (@ your top rate - eg 40% of £250.0 -
Benz carrera wrote:Cheers mate but it don't say nothing about payments and how much if I had I.e £1000 what is the best bike shop in the West Midlands?
Did you try the calculator?
http://www.cyclescheme.co.uk/calculator0 -
Thanks for the replys I just found out they use cycle scheme is this a good thing so do they go by how much u earn? And what happens after the 12 months can u put it in simple terms please? So a £1000 how much is that a month and what would happen after the 12 months?0
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It's all laid out in the above links! Take 20 mins to read it through and use the advanced calculator to see the savings.0
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Redundant postI don't do smileys.
There is no secret ingredient - Kung Fu Panda
London Calling on Facebook
Parktools0 -
OK, heres a real life example. I just brought a MTB on the C2W scheme (cyclescheme).
Bikes original cost = £1000. It was in the sale for £680. I had all the accessories I needed so £680 was what I needed from C2W scheme. I pay tax at basic rate (20%) so save this and my National Insurance (12%) - total 32% saving on £680 = total from C2W scheme is £462. This means I pay back (I have chosen over 18 months) - £25 a month.
At the end of the 18 months I have 2 options really:
1) return the bike (not likely as I have paid £462 for it.
2) pay a deposit to rent it for a further 2 years. The deposit is dependant on the value of the bike when new (in my case £680). If the cost is under £500, you pay a 4% deposit, if it is over £500 you pay a 7% deposit. Then at the end of the 2 year rental period if you want to keep the bike, cyclescheme keep you deposit and thats that. If you dont want to keep the bike you get the deposit returned and you give up the bike. Simple.
So, I will pay a total of £462 + 7% deposit of £48 = a grand total of £510. Not bad for a £1000 bike if you ask me!!!
Hope that make things clearer.0 -
I think the whole cyclescheme thing is rubbish. It doesnt matter how much you pay, at the end of the day, you are not the one who owns the bike ? It is just ridiculous, they say you buy the bike saving tax, but you are not its owner ?
After the 18 months you rent it for 2 years ?! 3.5 years for a bike is so much time, it might "die" on the 3rd year. Also, if you read the terms carefully, you will see that you have the option to rent the bike after the initial period has ended. So this means, they can say - no, you can't rent it.
@arnie1000 : you said the bike you bought was in the sale for £680. So you have saved £170, and that is if you actually get to own the bike after the N years have passed.0 -
pe60t0 wrote:I think the whole cyclescheme thing is rubbish. It doesnt matter how much you pay, at the end of the day, you are not the one who owns the bike ? It is just ridiculous, they say you buy the bike saving tax, but you are not its owner ?
After the 18 months you rent it for 2 years ?! 3.5 years for a bike is so much time, it might "die" on the 3rd year. Also, if you read the terms carefully, you will see that you have the option to rent the bike after the initial period has ended. So this means, they can say - no, you can't rent it.
@arnie1000 : you said the bike you bought was in the sale for £680. So you have saved £170, and that is if you actually get to own the bike after the N years have passed.
Own it / Rent it - whats the difference? You still use it the same, maintain it the same, bear the cost if it gets nicked or needs repairing the same. The only difference is you save a fair bit of wedge in the process.
Cyclesheme confirmed the choice at the end of the 18months is up to me - in my hands. I will pay the deposit, own the bike and say thanks for paying £500 for a £1000 bike. Yes, I could have paid £680 for it in the sale outright, but of couse no only do I save £170 extra thanks to the C2W scheme, I also get to pay for it over 18months interest free....0 -
Depends on the company you work for whether they decide to keep the bike after 18 months. I know for a fact that mine don't give a toss about reclaiming after the hire period is up, so it's mine for a fraction. You need to ask around and check out other participants stories.Voodoo Hoodoo0
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pe60t0 wrote:arnie1000 wrote:Own it / Rent it - whats the difference?
The difference is that after the rental period, the bike might not be yours. Why not just rent a bike then ? Barclays Bikes ?
Probably because you won't get a decent quality MTB from them..... Or anything you can really use outside of the centre of London.0 -
Also you are open to spot checks where you haev to prove to the tax man you use said bike for cycling to work.
On the whole the scheme saves you very little real world money when it is worked out. as you a now liable to the VAT on the bike. ( i do the salary calcs on these).
As a company its a huge burden offering little benefit to the end user other than an interest free loan. just go look around and offer cash at a bike shop and you will probably get a bigger discount than the scheme can provide.0 -
Thanks for all your comments I think I might jus save and get a bike I can call my own with out all the hassle thanks again
So when I have saved suppose the next question will be what is the best bike for £1000 in 20130 -
arnie1000 wrote:pe60t0 wrote:I think the whole cyclescheme thing is rubbish. It doesnt matter how much you pay, at the end of the day, you are not the one who owns the bike ? It is just ridiculous, they say you buy the bike saving tax, but you are not its owner ?
After the 18 months you rent it for 2 years ?! 3.5 years for a bike is so much time, it might "die" on the 3rd year. Also, if you read the terms carefully, you will see that you have the option to rent the bike after the initial period has ended. So this means, they can say - no, you can't rent it.
@arnie1000 : you said the bike you bought was in the sale for £680. So you have saved £170, and that is if you actually get to own the bike after the N years have passed.
Own it / Rent it - whats the difference? You still use it the same, maintain it the same, bear the cost if it gets nicked or needs repairing the same. The only difference is you save a fair bit of wedge in the process.
Cyclesheme confirmed the choice at the end of the 18months is up to me - in my hands. I will pay the deposit, own the bike and say thanks for paying £500 for a £1000 bike. Yes, I could have paid £680 for it in the sale outright, but of couse no only do I save £170 extra thanks to the C2W scheme, I also get to pay for it over 18months interest free....
You haven't paid £500 for a £1000. You've paid £680. Saying otherwise is misrepresentation.
Cycle scheme is good for someone who can't afford the bike outright but the returns and savings are not as great as they used to be. Not all retailers allow you to pay sale price either.
I used cycle scheme to buy a full sus bike (RR 9.1) rrp is 799 plus shoes @ 40 = 839. I pay back £72 a month for 12 months. However because of the tax savings my monthly income has only dropped by approx £50. Saving me £240. Who knows when I'll own the bike but I don't give it a second thought.0 -
Thewaylander wrote:Also you are open to spot checks where you haev to prove to the tax man you use said bike for cycling to work.
you have to prove it to your employer, the tax office dont care. there are no HMRC death squads searching for people using C2W bikes for 49% of journeysZesty 2140 -
Actually your employer is asked if they ahve done checks and what they are.
So its part of any payrol inspection that is undertaken on the company.0 -
Yeah they ask what the checks are, i would reckon most payrols will give the same answere every year. its not viable for HMRC to audit checks on a C2W scheme, they will take the word of the employer on this one.Zesty 2140
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I didn't ride the bike I bought on C2W to my office once. What a badass.0
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What a tax dodger.0
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Thewaylander wrote:On the whole the scheme saves you very little real world money when it is worked out. as you a now liable to the VAT on the bike. ( i do the salary calcs on these).
As a company its a huge burden offering little benefit to the end user other than an interest free loan. just go look around and offer cash at a bike shop and you will probably get a bigger discount than the scheme can provide.
Too broad sweeping statement and the real answer, as always, 'it depends'. Different companies, different needs, i.e. capital & tax planning but a 13.8% saving on NI isn't a bad return.
Using a scheme operator such as http://www.cyclescheme.co.uk/ may not be a great saving when comparing to a discounted bike online but a company administrating the scheme it's self it's quite possible to make some savings - which in itself once understood it's not that difficult.0 -
Thewaylander wrote:Actually your employer is asked if they ahve done checks and what they are.
So its part of any payrol inspection that is undertaken on the company.
So, what evidence do they want? They follow you on their bikes or car while you travel into work?0 -
Lots of misinformation in this thread... Employers are not expected to keep records of how the bike is being used. Taken from HMRC's guidance here: http://www.hmrc.gov.uk/manuals/eimanual/EIM21664.htmEmployees are not expected to keep detailed records of time spent cycling or miles travelled for the purpose of this 'main use' test. Accept that the test is satisfied unless there is clear evidence to suggest that less than half of the use of the cycle or equipment is on qualifying journeys. If it is clear that there is substantial use of the cycle for qualifying journeys, do not make special enquiries about the extent of any other use.
As for whether the scheme saves you much money or not, the answer is that it depends on the scheme. Our company's self administered scheme offers very good savings (35% for basic rate tax payers) and places no restrictions on where or what you can buy so employees can get exactly the same discounts and deals as they would for cash, and then save at least 35% on it and spread the payments.
It's hardly a great burden to administer the scheme, particularly if you're already operating other salary sacrifice arrangements such as child care vouchers.0 -
There are many different versions of the cycle to work scheme
I`ve just bought a Voodoo Bantu via this scheme and am very very pleased
my example was I had a £400 voucher for Halfords (my scheme only allows Halfords) and I get a 15% discount so in reality only pay £360
however its spread over 36 months interest free and comes out of my wages before tax and NI so that`s where the saving is
my deduction is £9.44 per month but in reality it`s £6.55 per month
so my total cost is £235.96 i.e a saving of £164.04. A good saving on a £400 bike
as it happened at the time I went to order my bike it was reduced to £360 and there was also a 3 for 2 offer on accessories so I had loads of stuff
with my cycle to work scheme you pay for 3 years and then its yours to use for as further 2 years without payment and then after 5 years the bike reverts to you with no final payment.
if it was over £500 it would be the employers property for 6 years
It enabled me to buy a good bike for no outlay and only be paying just over half the price so I am a big fan of the scheme0
