Cycle to work scheme - any point?

Guest2

Guest2

Guest2

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I have applied for a voucher at work through the Cycle to work scheme.

The allows you to use receive a voucher up to £1000 and then you will be subsidised £83.33 a month, meaning get the £1000 tax free.

You hire the bike from your employer and after 12 months you have the option of buying the bike from them or hiring it for another year.

The cost to buy is based on fair market value which used to be 5% + VAT for a bike over £500 and 1 year old. However it is now 25% + VAT.

Therefore if you want to buy the bike after a year, you end up saving nothing.

It also takes around a month from applying for the voucher to receiving it.

Would it not just be quicker and the same cost to get a £1000 bike on 0% finance, instead of using the scheme?
 
Let's say you buy a bike for £1000 and you are in the 40% tax bracket. Because you haven't paid tax you are effectively getting a discount of 40% on the bike.

My bike was around £800 and I paid £53 at the end of the 12 months.

Also it doesn't take a month, it took me a week to get the voucher.

If you can combine this with the end of season sales before the new model comes out you can get some amazing deals. Also evans have tradein deals etc and you can use freecycle or buy a cheap £5 kids bike on ebay.

It's not as good as it was but still a decent saving.
 
Only if you had a deal like I did which meant coming away with a 1.2k bike and not have to pay a penny (in an old workplace I was at)

I had the offer to do it in my new job but just bought a bike outright
 
It used to be great as the bike buy back was pennies.

Most of the retailers only receive say 95% of the value of the voucher which striking a deal is tough.
 
Pointless when I looked into it, as they changed the rules, so now it's a large final fee when you buy the bike after x years, when it used to be a token amount.
 
Adam said:
Let's say you buy a bike for £1000 and you are in the 40% tax bracket. Because you haven't paid tax you are effectively getting a discount of 40% on the bike.

My bike was around £800 and I paid £53 at the end of the 12 months.

Also it doesn't take a month, it took me a week to get the voucher.

If you can combine this with the end of season sales before the new model comes out you can get some amazing deals. Also evans have tradein deals etc and you can use freecycle or buy a cheap £5 kids bike on ebay.

It's not as good as it was but still a decent saving.
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Ok, lets say you are in the 20% tax bracket (In my eyes if you are in the higher rate bracket you can afford to buy a bike!)

Then the cost is £66.66 a month, so £800. Add on the 25% and VAT and it will end up costing you £1100!

I applied for my voucher last Wednesday, I have been told payment to Cyclescheme will be made Friday and from then it can take upto 2 weeks. 11th - 10th
 
Just looked through my docs - bought a Trek FX 7.6 bike in June 2012 from a local bike shop that took cyclescheme vouchers - £900 rrp reduced to £800.

My gross salary sacrifice amount was £66.67 a month, which amounted to a net monthly payment of £38.67. Over the 12 months I paid £464 in total.

The following June I made an "extended hire deposit" payment of £56 to cyclescheme and if at the end of three years (from June 2013) I choose to keep the bike (which I will), cyclescheme keep the "extended hire deposit" and the ownership of the bike transfers to me with no more money due.

So, I've paid £521 for an £900 rrp bike (or 42% off if you prefer), with the added benefit of having an interest free and credit check free loan in the interim.

Sounds like a pretty good deal to me.

FYI, only took my employer a couple of weeks to process the voucher.
 
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amigafan2003 said:
Just looked through my docs - bought a Trek FX 7.6 bike in June 2012 from a local bike shop that took cyclescheme vouchers - £900 rrp reduced to £800.

My gross salary sacrifice amount was £66.67 a month, which amounted to a net monthly payment of £38.67. Over the 12 months I paid £464 in total.

The following June I made an "extended hire deposit" payment of £56 to cyclescheme and if at the end of three years (from June 2013) I choose to keep the bike (which I will), cyclescheme keep the "extended hire deposit" and the ownership of the bike transferes to me with no more money due.

So, I've paid £521 for an £900 rrp bike (or 42% off if you prefer), with the added benefit of having an interest free and credit check free loan in the interim.

Sounds like a pretty good deal to me.

FYI, only took my employer a couple of weeks to process the voucher.
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I've also just paid Cyclescheme.co.uk the deposit for an extended hire, therefore bypassing the now large % you have to pay at the end of one year.

And I've just sent off another voucher to Planet X and should have a bike winging my way next week.
 
When I did it when it first started people were buying them and selling them straight on ebay. I think I paid 400 for a 1200 bike
 
Didn't seem worth the bother when I looked into it at the weekend. The only way I can see it being valuable is if you get the bike near enough free at the end from your employer.

If I remember right then it's up to your employer what the bike is worth at the end, could be cheap or could be hundreds.

Personally I would go with a 0% finance option.
 
amigafan2003 said:
...that took cyclescheme vouchers - £900 rrp reduced to £800.

My gross salary sacrifice amount was £66.67 a month, which amounted to a net monthly payment of £38.67. Over the 12 months I paid £464 in total.
Click to expand...

That's all good if you are paying higher tax rate

20% you pay £53.33
40% you pay £40

The only way it would be workwhile was if I was to keep the same bike for 6 or 7 years, then the fair market rate would be negligible

I have just cancelled out the scheme.
 
maccapacca said:
When I did it when it first started people were buying them and selling them straight on ebay. I think I paid 400 for a 1200 bike
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This was the reason HMRC banged the buy back rate to 25% instead of 5%

Meaning people would lose out on £200 (payment of £60/£300 with VAT added)
 
If you use the extended hire period your final purchase price is only 7% on bikes over £500 and 3% on bikes purchased sub £500.

If you're in the low tax pay bracket I think you end up saving a total of about 19 - 20% and you have the added benefit of paying for the bike monthly.

Yes you can pick up some bikes in the sale with similar discounts but whether you'd get a 0% offer to pay for it over 12 months I don't know. The scheme is still viable and you do still make a saving. It's also very useful for people who have credit rating issues and would like to pay monthly.

When I run the scheme where I work I used to have vouchers issued within two weeks maximum. Now the scheme has been centralised the vouchers don't get seen for 4 - 8 weeks.
 
As has been said several times, you don't pay 25% at the end of the year. Unless you're dumb and like to pay more money for no reason.
 
Guest2 said:
That's all good if you are paying higher tax rate

20% you pay £53.33
40% you pay £40

The only way it would be workwhile was if I was to keep the same bike for 6 or 7 years, then the fair market rate would be negligible

I have just cancelled out the scheme.
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Why are you talking about "fair market rate" after 6 or 7 years? I'm not sure that you entirely understand how the scheme runs or is run by companines like cyclescheme.co.uk. Either that or you're deliberately making incorrect assumptions in order to convince yourself it's not worth it.

4 years and it's yours (if you take the "extended hire deposit" option) and the fair market rate is 7% at that point (which you've already paid in the form or the deposit)

Besides, who's to know if you sell the bike earlier?

You can get another bike a year after getting the first voucher.
 
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