CTW info

bikeit65

I bought a new bike 14 months ago through the cycle to work scheme and the final payment was taken from my salary eight weeks ago, but i was enquiring today about buying another bike through the scheme but the company accountant informed me that i owe the company 25% of the value of the bike, is this correct? if it is when is the incentive to use the Cycle To work scheme,

SoSimple

The C2W scheme is based on you 'renting' the bike from your company...or C2W provider for a set period in return for receiving tax benefits. As a result of this you are offered the option to buy the bike at a 'fair market value' which depending on the duration of the scheme - in your case 12 months, equates I believe to 25% of the amount you originally borrowed.

Add this to the tax benefit and you'll still have benefitted but not by a significant amount, although of course you haven't had to find the full purchase price.

kajjal

Bikeit65 wrote:

I bought a new bike 14 months ago through the cycle to work scheme and the final payment was taken from my salary eight weeks ago, but i was enquiring today about buying another bike through the scheme but the company accountant informed me that i owe the company 25% of the value of the bike, is this correct? if it is when is the incentive to use the Cycle To work scheme,

Yes that is correct. This is why it can be cheaper to buy a bike in the sales on 12 months interest free credit as you effectively own the bike and if you change job you don't have to repay the whole lot at once.

rolf_f

The normal approach is to transfer ownership to the cycle scheme operator for two to four more years. That way the transfer of ownership payment is either equivalent to one months payment or nothing at all.

That way you retain pretty much the same benefit as the scheme originally offered.

bikeit65

Thanks folks,

simonj

I thought at the end of 12 months you could hand it back, pay 25% town or pay 3% or 7% to effectively rent it for an extended period after which most companies right it off and let you keep it, so effectively after you've paid the 3/7% you can forget about the scheme as you effectively own it.

Snip 'At the end of the hire period, Cyclescheme will contact employees to discuss the options available.

The most attractive option for employees will be to pay a small, refundable deposit (3% or 7% of the equipment value*) and continue to use the bicycle or safety equipment for an extended period of up to 36 months.'