cyclescheme thingy

Anonymous

was thinking around £450-500 bike £100 lock+lights+helmet



Total cost of bike and accessories:
£600




Net cost of bike and accessories, including finance and admin costs (if applicable):
£600

Income tax saving over hire period:
£120

Employee NI saving hire period:
£72

Final cost of bike & accessories:
£408

Total saving:
£192

Gross salary sacrifice, based on 12 month hire period (this should be the figure displayed on your hire agreement):
£46.15

Net salary sacrifice, based on 12 month hire period:
£31.38

Percentage saving over RRP:
32%

Anonymous

my company only does it with 2 shops and 1 of those charges a 10% fee

the other http://www.mickscycles.co.uk/most likely get the bike from the one that doesn't charge a fee looking around there shop last week noticed a nice red specialized one for £450.

Anonymous

I managed to find it on ebay (the one I liked in the shop) what do people think

http://www.ebay.co.uk/itm/Specialized-R ... 43b9fda1e4

The Rookie

Similar spec to a carrera Vulcan which is £370ish.....

Check the scheme details, you've missed off any final payments at all in that calculation.

Also I have a feeling HMRC may clamp down on some of these tax evasion/avoidance schemes and you could get caught out....that of course will kill C2W stone dead.

tarbot18

The Beginner wrote:

Similar spec to a carrera Vulcan which is £370ish.....

Check the scheme details, you've missed off any final payments at all in that calculation.

Also I have a feeling HMRC may clamp down on some of these tax evasion/avoidance schemes and you could get caught out....that of course will kill C2W stone dead.

I very much doubt it , it would cost them more in investigating and policing it than the pittance they would receive back .
You only have to look at the lack of legislation and tax amendments in the wake of the tax evasion scandals involving ebay , amazon , starbucks , google etc etc etc

Thewaylander

there not even tax evasion though.

it's all with in the rules, as anyone would say why pay more tax than you legally have too. morally is a different thing all together.

anj132

It could be evasion if the bike was not used for 50% of work related journeys albeit on a small scale where logs are not necessary. Although I don't think HMRC will be directly looking at this scheme for evasion, as it would be far easier to close it. Yes RTI will make a difference to how HMRC can look at information but I don't see the impact to C2W.

I don't think there is an issue with morals when it comes to paying less tax with the correct application of a scheme it was intended for.

OP: I could be reading in between the lines incorrectly and making incorrect assumptions however given your budget it will be worth checking a few things;

a) You are paying enough tax to cover the tax savings
b) If you are on national minimum wage, the salary sacrifice would take you under the NMW so it may not be possible to operate the scheme
c) It also can have other effects on items with examples such as tax credits or loan applications as this will be based on your lower salary.


These may or may not effect your situation and apologies if you were aware of them.

Briggo

The Beginner wrote:

Similar spec to a carrera Vulcan which is £370ish.....

Check the scheme details, you've missed off any final payments at all in that calculation.

Also I have a feeling HMRC may clamp down on some of these tax evasion/avoidance schemes and you could get caught out....that of course will kill C2W stone dead.

What are you on about, it's the HMRCs own scheme devised by the government, how would he get caught out.

Anonymous

im starting to think if its to good to be true theres uselly a horrible catch.

chrisw333

andrewgrundill wrote:

im starting to think if its to good to be true theres uselly a horrible catch.

well, 1000's of happy punters haven't be caught yet. With that said, anj132's comments are worth bearing in mind as it is more beneficial for some peoples circumstances than others.

Briggo

andrewgrundill wrote:

im starting to think if its to good to be true theres uselly a horrible catch.

I'd like to know what the catch is.

The Rookie

If you are only a 20% taxpayer and are forced to pay an FMV of 50% at the end of the year, clearly a horrible catch.

From a pure accounting point of view it's hard to see how anything that is significantly cheaper than the FMV and isn't generally available to anyone is anything other than a benefit in kind and taxable as such, in which case at some point I can see it going back to people being given the bike at the end of the year and paying tax on the benefit and therfor halfing the saving.

97th choice

This talk about the death of cycles schemes has been going on for years, thousands of people use them and public bodies still don't enforce the FMV rule on their schemes. I would just use the scheme to the best advantage and stop worrying.

GeeChandler

That was a complete monstrosity...be glad it was removed from sale before it killed someone! Reeeal bargain bikes are bloody hard to find on Ebay - if it's any good the vendor knows it is and lists it well and accurately, and it's noticed by people like...well like me, and it sells for about the right sum. The only chance of a real find is when someone screws up the listing and doesn't know what they have ('selling my son's old mountain bike, I made by Klein I think') and just lists it as 'mountain bike'.
Just stick with the big name manufacturers and lower spec models - as with many things, it's better to buy the lowest model from a good manufacturer, rather than the shiniest one that was made by a company that share their shed with water buffalo.
Don't know where you're based, but there are few good second bike shops round my way - you pay more than ebay but they do offer some backup.

cooldad

GeeChandler wrote:

Just stick with the big name manufacturers and lower spec models - as with many things, it's better to buy the lowest model from a good manufacturer, rather than the shiniest one that was made by a company that share their shed with water buffalo.

I would suggest this is absolute rubbish. As components are all generic, all you are paying for is branding and a frame, which is very likely made in the same far east factory making the cheaper bike, with nary a water buffalo in sight.

cooldad

Unless of course you mean Orange, in which case a whippet or ferret is more likely than a water buffalo.

chez_m356

cooldad wrote:

Unless of course you mean Orange, in which case a whippet or ferret is more likely than a water buffalo.

don't be too sure of that, there's not many things that can't be found in china

Briggo

The Beginner wrote:

If you are only a 20% taxpayer and are forced to pay an FMV of 50% at the end of the year, clearly a horrible catch.

From a pure accounting point of view it's hard to see how anything that is significantly cheaper than the FMV and isn't generally available to anyone is anything other than a benefit in kind and taxable as such, in which case at some point I can see it going back to people being given the bike at the end of the year and paying tax on the benefit and therfor halfing the saving.

Forced to pay 50% FMV? Link where you got that from.

I think the only horrible catch here is ill informed persons.

friedpizzainbatter

The Beginner wrote:

If you are only a 20% taxpayer and are forced to pay an FMV of 50% at the end of the year, clearly a horrible catch.

From a pure accounting point of view it's hard to see how anything that is significantly cheaper than the FMV and isn't generally available to anyone is anything other than a benefit in kind and taxable as such, in which case at some point I can see it going back to people being given the bike at the end of the year and paying tax on the benefit and therfor halfing the saving.

From another post:
http://www.bikeradar.com/forums/viewtopic.php?f=20005&t=12912071

The Beginner wrote:

Hmm, that 'retaining fee' is blatant tax evasion.........word of caution for you, by next year I can forsee HMRC clamping down on such measures that avoid the tax liability if FMV isn't paid.

I've asked this in another post, and you didn't reply. What is your issue with cycle schemes? I did a lot of reading before I signed up for mine, and have not found anything to indicate that I would have to pay 50%FMV at the end of the year, or anything to indicate HMRC are about to clamp down on the 7% FMV to extend the lease for 3 years. I think out of all the tax evasion that the government could clamp down on, if this can even be regarded as a tax evasion seeing as it was setup by the govenment in the first place, it is unlikely that this will be a target. From reading this post it reads like you are trying your upmost to put people, who couldn't otherwise afford to buy themselves a nice bike, off using them, but you have supplied no evidence to support what you are saying.

supersonic

The HMRC values are 'acceptable' disposal values ie guidelines. This is explained on the Cycleshceme page. The employer/finance company doesn't even have to offer you the bike at all, nor offer to extend the lease.

cooldad

But in reality not many employers want a bunch of semi trashed bikes, and HMRC have better things to do than faff about with a few £'s due on cycle schemes.

supersonic

True, but it is worth knowing the full facts. I know of people who have not had the bike offered to them.

The Rookie

People said the same of HMRC over FMV's.....but that happened....

cooldad

Yeah I guess. My company does it's own simplified scheme as they reckon the official ones are too much admin.
Just an interest free loan as a salary sacrifice, so you own the bike from day one, but get the tax benefit. No idea how legal it is, but a really clever Oxbridge accountant type ok'd it, and we're a by the book kind of place, so I'm happy.

The Rookie

cooldad wrote:

Just an interest free loan as a salary sacrifice, so you own the bike from day one, but get the tax benefit. No idea how legal it is,

Not at all!

cooldad

The Beginner wrote:

cooldad wrote:

Just an interest free loan as a salary sacrifice, so you own the bike from day one, but get the tax benefit. No idea how legal it is,

Not at all!

Excellent, now I feel like a master criminal. In fact a fair proportion of the company must be by now.
South America here I come.