Real cost of Cycle to Work?
copperthorpe
Posts: 82
Hello there,
looking to give Cycle to Work a go but would like to know how to work out how much per month the scheme will cost me
ie: is there an easy way to work out how much I will down in my 'take home' pay as I cant find a straight answer to this anywhere
Will proably spend around £500.....
Thanks.
looking to give Cycle to Work a go but would like to know how to work out how much per month the scheme will cost me
ie: is there an easy way to work out how much I will down in my 'take home' pay as I cant find a straight answer to this anywhere
Will proably spend around £500.....
Thanks.
C49
0
Posts
Just be careful to only use this as a very rough guide unless you work it out in detail.
http://www.cyclescheme.co.uk/calculator
Just tried it, put in my tax code, cost of the bike and salary and it gave a 'Net salary sacrifice, based on 12 month hire period' i.e how much I would pay a month. I ignored the bit about weekly commute costs.
Yes, and the provider won't tell you up front what that final payment will be.
Was a deal breaker for me and I went down the route of finding a good value bike and using an interest free credit card route instead, knowing I'd own my bike immediately and have predictable repayment period and amount. Also, it meant I didn't have to wait for my benefit window to open in December before applying for my voucher...
The scheme needs changing to just make it an HP agreement as the rules used to be 'interpreted'.
From the above link:
If Cyclescheme is handling your end of hire options you will be given the following 3 options at the end of you hire period:
Interesting ... I hired through cyclescheme, and don't recall doing anything after the initial hire period ... concern now is whether I actually own the bike :shock:
... and indeed it does ... amazing I remembered my password ... and it says ...
Completed
Thanks for your payment; we're pleased to confirm that you now own your equipment.
it mentions step 5 of my hire process was Decision time - You have 3 End of Hire options, choose wisely ... don't remember doing anything (or paying anything), but good news that I do own it now
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Good job too as company went bust within a year so very awkward if I'd done it. The main thing for me was not owning the bike and TBH it was not much of a saving. I could buy a cheap deal bike and get 0% credit too. The schemes I could have used only allowed for full price bikes. So basically end of season sales I could get up to 50% off last year's model and own it outright with 0% credit. IMHO that is cheaper way to do it than cycle to work. One shop near me even did special deals such as bring an old bike any condition and get so much off. Basically £50 for a skip job fished from my local canal would have got that off, then add a last year's deal and 0% credit deal... I think those on higher rate of tax could of course make it more worthwhile.
One thing though is the money is not the whole deal. Other intangibles such as whether it suits your circumstances. Do you want to be tied into a deal with your current employer? WIll you be leaving, made redundant, want a new bike within a year because you've outgrown your sub-£1k bike?
After checking i did the same got a sale bike on interest free credit. Better deal and not tied to employer.
Where we work they just use the standard HMRC table for valuation - http://www.hmrc.gov.uk/manuals/eimanual/EIM21667a.htm
So I have three options: Return Bike; Pay final value fee based on HMRC table; Keep using it for nothing.
I've gone for option three.
Am actually thinking about getting my second bike now my first year is up on the same basis...
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For basic rate tax payers, do they benefit at all from the scheme these days?
Edit: Using http://www.cyclescheme.co.uk/calculator suggests that a £1k bike gives you an overall saving of ~£16.50, if my sums are right after using HMRC's 18 months transfer of ownership!!!
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First one in 2012 and I picked the second up on Wednesday.
I spend £500, I pay £26 an month (or rather £26 off my take home pay) making it £312 over 12 months and last time it was a final payment of £40. I am guessing it will be similar this time.
For me it was a good deal, my previous bike was very tired and it would have cost a lot to replace the transmission components and tidy it up a bit.
I got a brand new bike and am keeping the old one as a winter/spare bike or just as spares.
I'll do the same again in 2/3 years.
I was able to buy a sale bike as long as it was from a retailer who could provide a proper invoice. And to top it up to £1,000 with some bits (pedals and cleats etc).
I've owned the first one for 2 1/2 years now and done 3,000 commuting miles. Thinking of starting a new c2w deal, as it's such a great saving for a higher rate tax payer.
As a 40% tax payer it would be a bigger benefit to me (erm isn't that kind of the wrong way round) than to a lower rate payer, but as I build all my own bikes there are few bikes that really appeal.
So if the bike got stolen or destroyed, would you still be liable for payments? Im assuming you would. The whole scheme sounds farcical to me. I heard its not even that much of a saving all things considered. I would rather spend more and get things sorted strait away.
...I don't know of any way of buying a bike that means you don't have to still pay for it if it's lost or stolen!? You can of course pay for insurance if you wish!
I saved almost £400 on £800 worth of bike and equipment. To me that's a substantial saving! I'm past the end of the 12 months now, and I pay nothing to keep riding it as long as I want (that does depend on how your scheme/employer works of course). If at some point I want to make it mine I just calculate the residual value at that point using the HMRC tables and pay that and it's mine.
All good to me.
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I would like to tell you my little story. It all starts with signing up to the Cycle2work scheme via my employers and taking proud ownership of a Chris Boardman Team CX bike mid-October 2014.
The Halfords branch in question was Burgess Hill, the staff were so helpful in bike suggestions as I commute 5 days a week from Haywards Heath to Brighton over Ditchling Beacon (approx. 900ft climbing each way, so almost 2000 feet a day.) round trip daily of 35 miles.
Now this is a tough ride for a fat 40+ year old so bike choice and set up were essential, as this is an all year, come rain or shine commute. All started so well first couple of weeks the only issues were to be frank my lack of fitness.
Then the problems started first of the brakes failed and gears would not work, not unusual as the cables had stretched (New bike syndrome) all sorted with expert speed and attention to detail at the 6 weeks free health check carried out by the mechanic Ben at your Burgess Hill branch.
However as the winter progressed I had more and more issues from again gears and brakes would stop working after two weeks, the headset would go lose and cause vibration on braking and creaking on climbs. Closely followed by the bottom bracket barring failing and this was just month 2 of ownership.
So by month 4 (February), I’m now a regular at the Burgess Hill branch and on fist name terms with many of your staff. The Bike hut manager Lee is to be highly commended for his patience and customer service skills.
In February the decision of your area manager (sorry don’t have his name) was to condemn the bike un road worthy. Faults both front and back brakes not working, gears not working, both front back wheel bearings gone, 2nd bottom bracket needing replacement and paint flaking off of the frame.
So after just 4 months my pride and joy condemned. So in the 4 months of ownership the bike was in and out of your workshop for a total of 3 weeks.
Not to worry in just under a week I was back on the road with another brand new Chris Boardman Team CX personally set up by the manager of Burgess Hill Bike Hut Lee. So all good in the world of cycling. All smiles.
6 week check booked in for bike number 2, bike cycled to Halfords Burgess Hill just for a few adjustments (New bike syndrome), and me looking forward to the spring sunshine and lighter nights commuting home.
Until I get a call from Lee, on his thorough check over he discovered the frame had cracked at the seat post. So thank god for warranty.
With Lee’s good advice and opinion a decision was made to go for a replacement bike, but a different make (Raleigh Revenio 2) All is good in the world again, it flew through its six week check with just minor (New bike syndrome) adjustments. But come week 10 guess what? again I’m without a bike to cycle to work. So for the last three weeks I have been riding a £250 ebay bike as the bottom bracket has failed on my 10 week old bike and no branch of Halfords or any local bike shop including Evans cycles head office can get hold of the correct removal tool.
I have been informed by Ben at Burgess Hill branch that they can’t get this tool in stock till September the 5th that’s over a month away already been without this bike 3 weeks and its 10 weeks old, question are all your bikes made of cheese?
Good news I have managed to get the correct tool sent direct from a bike shop in Germany
As no one has it in stock in the whole of Britain, so come the weekend the Raleigh and me with tools will be on my way back too…. I hear you ask my favourite shop Halfords in Burgess Hill.
Too say I’m highly disappointed with the quality of the 3 bikes I have had in the last 8 months I would however like to complement you and the Staff of the Burgess Hill branch, with a special thanks to both Lee the manager and Ben the mechanic for their understanding, help and support over the past half year. They are to be highly commended and I am so fully appreciative of their time and help.
I looked into it and at that time a lot was being made about FMV (Fair Market Value) and being on the lower rate of tax I felt the risk was not worth it to save a very little bit of money. My thinking was I would not go into this scheme for any bike value that I could not afford to buy outright for myself, thinking was that way I could buy out of the scheme if I left the company. It was a time of low job security with the company over expanding and really lurching to oblivion.
I never took it up and less than a year later was made redundant when the bank closed the company down (before a debt shedding pre-pack could be set up fully). I would have then been in a situation where I could not justify paying off the scheme over paying my mortgage so I would have lost all the rental value put into the scheme.
I only say this because IMHO it is always a risk, not least because it is not your asset. Buying on an interest free scheme at a bike shop, each payment gets closer to clearing the debt and full ownership. Even before then you reach a point where the market value would clear the debt and perhaps give you something back. Leaving a C2W scheme in the middle you have no assets held in the bike it is buy back or give it up. In my case it would have been give it up.
I am not saying it is universally a good or bad thing, there is no way to say this. What I am saying is this scheme has benefits and drawbacks. You have to look as much at your security in the company as much as the financials. I guess in public sector it could be safer than in private sector and a smaller company might be riskier than a larger one. This is risk management and one that you need to consider. I did and made the right decision not to take it up. I stuck with the old bike I had and when in my new job I bought a new bike outright in the September sales saving about 40% off RRP (I was on lower tax rate so you could say that I got it cheaper than a C2W scheme would manage for me).
PS some schemes allow sales bikes most do not I believe so I would have had to take up a scheme for £700 when the actual bike in the sales cost £420 for the scheme available.