£1,000 cycle to work scheme at work

[BlackCoat2k10]

Going to go to Halfords this weekend and have a good proper look at cross bikes / mountain bikes and an extra set of slimline tires and road bikes. To help me obtain a better understanding on everything. Come next Friday I should be ready to place my order !

Cheers for the ideas fellas!

 

[KaiserDJG]

my work has a cycle to work scheme but you need to be careful... read the small print because in ours you pick the bike and basically your renting it from halfords for the time period and at the end the bike is owned by your company but your paid all the money yet you still have to buy the bike from your company at the end usually at 2nd hand price... you want to pay £1200 for a £800 bike?

i opted for our second choice which is a £250 limit 0% finance on a bycicle from halfords over one year deducted from pay

i got a hybrid carrera gt limited ed for £220 with a year bike plan and i commute everyday rain or shine, works great for me

 

[Vonhelmet]

my work has a cycle to work scheme but you need to be careful... read the small print because in ours you pick the bike and basically your renting it from halfords for the time period and at the end the bike is owned by your company but your paid all the money yet you still have to buy the bike from your company at the end usually at 2nd hand price... you want to pay £1200 for a £800 bike?

Well, yeah, that's how the schemes work. If they didn't work that way, then your employer would be classed as giving you an asset, and you'd be taxed on it as well as subjected to class 1A NIC, if memory serves. If they sell you the asset, then it's different because it's just a market value sale between two people, and essentially nothing to do with your employment. And your employer, unless they're mental, will use the HMRC agreed second hand values for bikes which is 18% where the loan was for under £500 and 25% if it was up to £1,000. I think we can all agree that a Boardman Comp, for example, costing £800 new, is worth a wee bit more than £200 after a year's use.

Besides, it's not like your employer wants to keep the bike at the end of it, so of course they're going to give you a good deal to take it off their hands. What the hell do they want with a year old bike? And they'll have already made bank by not paying you that chunk of salary and not paying employer's NIC on it.

Right, now I'll take my tax adviser hat off...

 

[matt_fsr]

Going to go to Halfords this weekend and have a good proper look at cross bikes / mountain bikes and an extra set of slimline tires and road bikes. To help me obtain a better understanding on everything. Come next Friday I should be ready to place my order !

Cheers for the ideas fellas!

Please don't just go to Halfords for advice and assistance.

They are completely hit-and-miss. Some stores you'll get an excellent service with someone who's really into bikes and helps you loads, and others are staffed by knuckle-dragging apes who can't fix a problem even when you tell them what needs doing under warranty!

I'd strongly recommend getting yourself along to a local bike shop for advice as well.

Vonhelmet - that's interesting to read about the tax aspects, it explains why the "value" of such bikes is so low even after 1 years ownership. No employer wants their staff member to hand the bike back to them, and leave them with the cost of getting rid of it!

 

[SexyGreyFox]

Please don't just go to Halfords for advice and assistance.

They are completely hit-and-miss. Some stores you'll get an excellent service with someone who's really into bikes and helps you loads, and others are staffed by knuckle-dragging apes who can't fix a problem even when you tell them what needs doing under warranty!

True this.
Our Fenton Halfords lads knew what they were talking about while the Hanford Halford lads didn't know much.
I'm lucky that I've got 3 Pro bike shops in the City and to be honest they all gave virtually the same advice.

 

[BlackCoat2k10]

Interesting read on the Employer bit. Will have to talk to our HR Monday and see what their deal is and hopefully see an example or two.

As for local shops that is something I wanted to do next week when I have a bit more time and see how much it would cost me to go other places than Halfords. The one near me does have a very enthusiastic biker as I know him from University but it's hit and miss whether he will be in / around to help much.

 

[Vonhelmet]

It's definitely worth looking at the fine print and making sure you understand it, because the maths is fiddly.

 

[pumaz]

I was considering getting a road bike on the cycle scheme as it worked out I would be paying back £420 over 12 months on a £700 bike. But the bit that stopped me is "buying it off my employer" no one seems to know just how much our employer would want! I doubt they would just say keep it or £50, they are far more likely to follow the schemes guidance in which case I might not save anything or even face a loss

Would love to get a new bike before the summers over but with the cost of the bike plus pedals, shoes, helmet and clothes etc. it's going to cost me well over £1000 to get on the road and only have £500 saved in my bike fund

 

[Vonhelmet]

I was considering getting a road bike on the cycle scheme as it worked out I would be paying back £420 over 12 months on a £700 bike. But the bit that stopped me is "buying it off my employer" no one seems to know just how much our employer would want! I doubt they would just say keep it or £50, they are far more likely to follow the schemes guidance in which case I might not save anything or even face a loss

Would love to get a new bike before the summers over but with the cost of the bike plus pedals, shoes, helmet and clothes etc. it's going to cost me well over £1000 to get on the road and only have £500 saved in my bike fund

I can't imagine circumstances under which you would face a loss. As mentioned above, there is no way your employer wants your bike, and they want you to take up the scheme, so it has to work out at a net win for you.

I think the obvious guidance would be... Ask your employer. But I'll bet they follow HMRC's approved valuations above.

 

[pumaz]

If that's the case £420 + 25% of £700 (£175) = £595 a saving of £105. Doesn't really seem worth all the hassle of being limited to shops that are in the scheme, having to wait for decisions and vouchers etc. also knowing for the first year the bikes not even yours

I work for a big supermarket and I'm 99% sure they would just follow guidelines...

 

[Vonhelmet]

Worth checking how they go about handling that 25%. My employer have you pay a bit of it and then they "give" you the rest and you get taxed on that bit so it still works out. For you.

 

[helpimcrap]

I was considering getting a road bike on the cycle scheme as it worked out I would be paying back £420 over 12 months on a £700 bike. But the bit that stopped me is "buying it off my employer" no one seems to know just how much our employer would want! I doubt they would just say keep it or £50, they are far more likely to follow the schemes guidance in which case I might not save anything or even face a loss

Would love to get a new bike before the summers over but with the cost of the bike plus pedals, shoes, helmet and clothes etc. it's going to cost me well over £1000 to get on the road and only have £500 saved in my bike fund

at the end of the 12 months - 3 or 7 percent of the certificate value. you keep it for another 3 years then it's yours or you get your deposit back.

Not a bad thing.

it's supposed to be you have to pay market value at the end of the 3 years but my company website says it's yours without paying anything. I've printed that page off for use in 3 years time if they try to charge me lol.

 

[Vonhelmet]

at the end of the 12 months - 3 or 7 percent of the certificate value. you keep it for another 3 years then it's yours or you get your deposit back.

Not a bad thing.

it's supposed to be you have to pay market value at the end of the 3 years but my company website says it's yours without paying anything. I've printed that page off for use in 3 years time if they try to charge me lol.

At the end of 3 years they can probably get away with saying it's worthless, but they couldn't after just one year.

 

[Mad old tory]

The way I saw it was even before the tax saving I was effectively getting a 0% loan for a bike, but I think I definitely was better off overall, even with the P11d benefit hit at the end.

 

[helpimcrap]

At the end of 3 years they can probably get away with saying it's worthless, but they couldn't after just one year.

But after 1 year it's done and dusted once you've paid your 3 or 7 percent.

 

[Vonhelmet]

But after 1 year it's done and dusted once you've paid your 3 or 7 percent.

I'm not sure HMRC would accept such a low valuation, unless that is the relative value of the tax you'll pay on the accepted valuation.

 

[Jonny ///M]

Cyclescheme call it a desosit from yourself to them and they run it through their books for a further two years. After the full three years are up the bike is yours and that 'deposit' must cover what HMRC think it's worth.

 

[Vonhelmet]

Ah, ok, that makes sense. Cheers.

 

[KaiserDJG]

Mine cost £250 and all i pay is £250... it comes out of my wages over a year 0% interest... theres a year bike cover on it too, what more do you need.

 

[JDeeLFC]

How about a hybrid bike?

http://www.evanscycles.com/products/trek/7300-2011-hybrid-bike-ec023965