Grabbed myself a bargain

gregster10217

Have been (back) road riding for a few years, but want to get into some off roading, and going out with my son on some easyish trails. Have had a mountain bike, which was 13 years old, which I used, but it was heavy, no sus front or rear and quite frankly, it was passed it.
My C2W scheme begins again next week, and I can only go to Halfords. Have been more than pleased with my Boardman Team Carbon roadie, so looked at the available bikes and decided on the Boardman MTB Team. Originally £850, reduced to £722, plus then for trading in my 13 year old heap, I got another 10% off taking it down to £650. Once I finish paying for it through the C2W scheme, it will only cost me just upwards of £450.
Absolutely chuffed and cannot wait to get out on it and enjoy the off road side of things, rather than finding it a chore on the old one. Maybe I'll be able to keep up with my son now!

The Rookie

gregster10217 wrote:

Once I finish paying for it through the C2W scheme, it will only cost me just upwards of £450.

Does that include the final FMV payment ( http://www.halfords.com/webapp/wcs/stor ... yId_173020 ) which should be £360?

supersonic

FMV at 50%?

Thewaylander

what HMRC are pushing for.

best thing to do is not pay it, and leave ownership of the bike with the company. then ride it for 2-3 years then the company can just write it off.

Most wont do that though as then you have a depreciating asset on your books.

The Real Radioactiveman

just had my benefit in kind charge from HMRC for £1k bike after 3 yrs and it was only £50

gregster10217

According to HMRC site, FMV of a bike under £1000 after 18 months is 21% of the original price, so nowhere near the £360 mentioned above. My last bike cost me one extra payment on the scheme and it was mine.

97th choice

Never heard of them doing trade in before, sounds well worth it

The Rookie

supersonic wrote:

FMV at 50%?

Hmm was sure it was 50% for upto £1K, still is 25% or £180.....

Thewaylander

gregster10217 wrote:

According to HMRC site, FMV of a bike under £1000 after 18 months is 21% of the original price, so nowhere near the £360 mentioned above. My last bike cost me one extra payment on the scheme and it was mine.

still at 21% you have lost your paye saving unless your in the 40% bracket. silly scheme and no you dont save the VAT your charged that now.

gregster10217

Your employer aims to ensure that your savings are maximised through the scheme. At the end of your Hire Term, your employer may offer the option to take ownership of the equipment. If the employer transfers ownership to you at no cost you would be receiving a benefit in kind, which is taxable. P11D facilitates the payment of tax whilst maximising the savings. By applying the amount to your P11D you will only pay tax on the market value as calculated from the HMRC guidance. HMRC guidance enables your employer to calculate the value of your selection at the end of the Hire term. The guidance states a selection valued under £500 will be worth 18% after 12 months, where as a selection over £500 will be worth 25% of its original value. For example: - If you select £650, the market value would be calculated as £162.50 (25% of £650). The £162.50 is the reported on your P11D which will allow you to pay the tax on that value. Based on a 20% basic rate tax payer the cost to you will total £32.50

Just copied the above from the work scheme site. So if I understand correctly, I'd just pay the tax on the % valuation and not the amount the bike is worth after 18 months?

2003bluecat

gregster10217 wrote:

Your employer aims to ensure that your savings are maximised through the scheme. At the end of your Hire Term, your employer may offer the option to take ownership of the equipment. If the employer transfers ownership to you at no cost you would be receiving a benefit in kind, which is taxable. P11D facilitates the payment of tax whilst maximising the savings. By applying the amount to your P11D you will only pay tax on the market value as calculated from the HMRC guidance. HMRC guidance enables your employer to calculate the value of your selection at the end of the Hire term. The guidance states a selection valued under £500 will be worth 18% after 12 months, where as a selection over £500 will be worth 25% of its original value. For example: - If you select £650, the market value would be calculated as £162.50 (25% of £650). The £162.50 is the reported on your P11D which will allow you to pay the tax on that value. Based on a 20% basic rate tax payer the cost to you will total £32.50

Just copied the above from the work scheme site. So if I understand correctly, I'd just pay the tax on the % valuation and not the amount the bike is worth after 18 months?

That's how I understand it, although there will be some additional administration from your employer regarding the P11Ds. Also, you may have to add VAT onto the market value, although I'm not entirely sure as it's not being purchased as such.
It could be a much more simple scheme if the government weren't trying to put off people who might not actually cycle to work by making it ridiculously complex.

The Rookie

It would appear than they are not following the info they give in their own FAQ!

Thing is the companies got too tied into 12 equal payments and giving the bike away, they forget they can charge anything they like for the monthly hire, so it needn't cost anymore or be any more complicted, the problem is actually the people running the schemes!