c2w has been introduced by my employer just as i want to buy a bike! im concerened tho with a few things.i understand exactly how the scheme works but it seem a lot is based on trust that my employer will do whats promised. ie
my salary will be lower to suit but there is no mention that it will be automatically raised when the 18 mnths is up.will it be?what if i got a payrise during the 18mnts?

the bike is my employers property and they “can choose” to sell it to me for “about £40” at the end of the scheme.what if they try to get me to go for another new bike instead or up the price i need to pay?its supposed to reflect the market value of the bike but an 18 mnt old £1000 bike isnt worth £40!?

do i get any written agreement of what the rules or contractual obligations are? it seems i cant have anything concrete as then its h.p. and i wont get the tax breaks, thats why its all based on “trust”

anybody completed a scheme and come out of it smelling of roses?

I’ve had two.

Yea HM forces cant take part, theres a problem 🙁

I’ve had mine over a year and they haven’t deducted a penny yet 🙂

Also it’s parked in the cycle racks 2/3 days per week

Just because you’re paranoid; doesn’t mean they’re not out to get you.

Yeah, did it no probs.

no problems for me either.

The government want to stop people geting to porky. They are willing to give you the NI & income tax back on upto £1000 (typically). So if you are earning more than £40k ish then you effectively pay only approx £550. Company will typically sell you the bike for £50 at the end

downsides –
1. The bike shops tend to charge you 10% more than if you came in with cash (as they have to pay to be in the scheme)
2. You buy a bike when you don’t need one.
3.the tax reduction form 22 to 20% income tax the other year robs you of a couple of quid saved.
4. Not all bike shops in the scheme
5. It can take a few months to get your bike.

No real catches otherwise, get it sorted

Ye gods! They will make you sign a form, just a simple form but…….you have to do overtime every night and most weekends without pay! You can hand your notice in but you can’t leave until the cyclescheme agreement you signed runs out….and it never runs out. It goes on for that long, your state pension will be used up to make the payments. It’s all a big fat con! In fact, your employer only employed you so they could entice you in with the cyclescheme so they could then rip you off for the rest of your working life! Run! Run away now! Keep that tin foil hat on your head as well..

or…

It could be that you genuinely get a bike at about 45% less than retail, your employer may sell it to you for one final instalment at the end of the 12 months or they may decide to keep it as a souvenir. You could always ask to make sure before you get one. If your salary goes up during the scheme, you’ll take home more money. It’s a fixed price purchase, not a percentage of your salary. it’s an agreed deduction not an attachment of earnings to the Treasury.

I’ve just bought a bike with the scheme and I’ve never owned a tin hat in my life 🙂

That 10% charge from Shops is utter tripe. you pay the price a regular punter would.

One dealer that sells Cube bikes and has not round wheels in it’s name told me I would have to pay a mark up of £90 to cover admin and delivery for my bike which was going to cost £930. They wanted the £90 as an up front cash deposit. I found a more local Cube dealer where i could collect in person and they didn’t charge me any admin fee. Bought the bike for the voucher price of £935. Looks like some shops do indeed recoup the 10% they pay to cyclescheme from the customer.

unlss its on sale, then most shops add on 10% as the margins are pretty slim.

That 10% charge from Shops is utter tripe. you pay the price a regular punter would.

True, but not utter tripe. Cycle2Work get a 10% discount from the shop which the customer won’t see (that’s how they make their money) so the shop won’t usually offer extra discounts on top (like they might normally).

drinkmoreport is right. shops do not and should not be charging extra…

we lose 10% on every voucher in fact. i.e. we get a £1000 voucher – we see £900 of it.

In our case we got a further 10% discount from the LBS for bulk.

And you don’t have to use any intermediaries who charge, your company can organize it all itself. It’s just a tax break like any of the others your employer is probably used to claiming.

That 10% charge from Shops is utter tripe. you pay the price a regular punter would.

If I walked into my LBS and paid cash up front (pound notes or card) they would give me 10% off the RRP off most of the bikes they sell.

If I was to buy the bike through the cyclescheme, then they don’t give me the 10% deduction because a figure approximately equal to that goes to cyclescheme for doing the paperwork.

So if you have a good relationship with your LBS it may be that you get a regular discount when paying cash, which they may be less likely to give you through cyclescheme.

The downside is you have to ride it to work.

Just got my second bike on the scheme, it works for me 🙂 We save VAT as well I believe. The final payment is a bit of a worry, but just make sure you ask what it will be. Commonly it will be about 5% of the total cost. Our accountant runs the scheme independently, so we just get a quote from anywhere we like and he produces a cheque. My LBS has sold our company about £15k of bikes in 18 months, so hopefully it’s working for them too.

actually, the rules don’t say anything about you having to ride it to work. I think it just insists on a minimum ratio of riding to work and riding elsewhere. In theory, you could leave it in the shed and you’d not be breaking the rules.

dannyboy – there is a contract which clearly stipulates how long the payments are taken off your salary and for how much etc. In that sense your concerns are unfounded. The technical downside is the resale value to you at the end as this cannot be pre-agreed; however I believe it would be acceptable for a company to publish its policy on how it disposes of and values its cycle assets. That policy could be changed in the interim – but if you don’t trust them that much – you probably want a new job… …But there is a topical concern with the scheme:

You should ensure that it makes clear what happens if (1) you are made redundant (2) you decide to leave the company for any reason (new job, sickness, look after the kids, etc)? And make sure you are happy with what happens, e.g. if you are made redundant and £400 of you redundancy is “gobbled up” to finish the lease then that might make life very difficult financially. On the otherhand if you’ve already paid them £400 and then it all ends with “no penalty” and no bike for you [in the worst case the reciever may have a different attitude to that asset than your boss] then you’ll have no job, no bike and paid a lot to rent a bike for a short period!

ie
my salary will be lower to suit but there is no mention that it will be automatically raised when the 18 mnths is up.will it be?what if i got a payrise during the 18mnts?

You salary isn’t changed at all. All that happens is that they take the bike payments out of your pre-tax salary (ie you don’t pay tax on the value of the bike which is where the main saving is) in exactly the same way that they take pension payments, etc.

the bike is my employers property and they “can choose” to sell it to me for “about £40” at the end of the scheme.what if they try to get me to go for another new bike instead or up the price i need to pay?its supposed to reflect the market value of the bike but an 18 mnt old £1000 bike isnt worth £40!?

Is your company likely to want to have your bike, really? Unless you really think your company’s out to get you then they’re going to do exactly what they say and ‘sell’ the bike to you at the end for the stated amount. I’ve never heard of anyone having a problem with this. The ‘value’ of the bike is debateable but it’s one of those things that the Inland Revenue seem happy to accept.

do i get any written agreement of what the rules or contractual obligations are? it seems i cant have anything concrete as then its h.p. and i wont get the tax breaks, thats why its all based on “trust”

You should get a clear agreeement written down.

anybody completed a scheme and come out of it smelling of roses?

Yes, three times and I’ve never heard of anyone have problems. The only potential issue is if you leave before the term. At our place, you have to pay the outstanding balance off when you leave but it doesn’t cost you any more.

My wife’s had 2 B2W bikes now, a £900 Rock Lobster and a £300 Trek commuter.
Everything (Including the buy-back) is in black and white before she starts. Sign dotted line, get voucher, go shopping. It’s that easy.

I had one a cpl yrs ago and a few of my workmates have got them now, the only downsides are your can only spend £1K (but you used to be able to get £1.5K for a PC in a similar scheme!) and afaik if it gets nicked and you tell the c2w people you have to pay tax on it for the rest of the agreement (so dont tell them)

Oh and I was told santa cruz bikes arent available on our scheme (dunno if its all schemes), you generally cant get frame only (unless your friendly with your LBS) and you generally have to pay full RRP which most people dont when they spend their own wonga (do they?) but you wont be paying the total cost in the end anyway.

I’m on my 2nd now and once the years up I’ll probably go for another 🙂

Only downside is that you’ll find it hard to get the bikeshop to knock the price down…

Basically what clubber says. It’s hard to imagine a scenario where the easiest thing for everyone involved isn’t just to flog it to you at the end for £50 or whatever. What do they have to gain by doing it differently?

I do wonder if at some point they’re going to crack down on the ‘fair market value’ thing. The whole scheme is misused really so it wouldn’t surprise me.

To be fair to bike shops, the margin is reduced. When I got mine, the RRP was £1500 but the cash discount price was £1300. Because I was getting a voucher for £1000 and paying cash for the difference, he offered a price of £1350, which is only £50 more than a normal punter paying cash. I was happy with this as I’m not trying to take food from his baby’s mouth!

it reduces you pension contributions – if applicable.

On the salary side do you not get a letter with your salary amount stated in it after each pay review? I do and besides providing an auditable record it also states the gross amount + the amount after salary sacrifice. Not sure if it’s same everywhere by my overtime rate is based on the amount after salary sacrifice so I guess if a large proportion of your annual income comes from OT then sacrificing £1000 for C2W could end up costing you.

Does anyone know what happens if you leave before the agreement comes to an end?

And does it matter if you leave due to redundency or your own choice?

you dont have to use cyclescheme.co.uk
get your Co’s accountants to do the work.
The cyclescheme web thing is a public / private partnership to make the process easier, however it makes it long winded and cost you an extra 10%

CRC have all the paperwork to download, it is an agreement between you and your employer, it has f’all to do with anyone else.

yes I have done it this way. got a £2600 bike from pauls for 1/2 price, paid 300 up front and sorted the rest out through the scheme. Sorted.

Do your research:
Dept 4 Transport Website

thanks for all the help guys im gonna grill the people at work!

if your company is small enough, organise your own scheme,print up all the forms make it all official, and run your own scheme is very do able
example
i purchased a bike from pedalon i got 20% of in store vouchers to spend and did not have to pay 10% to scheme as i was runing my own scheme
take of the vat,ni,and tax
and i paid it back over 4 months not 18 then after 12 months purchased bike of employer for £20 quid
it took our accountant 20 mins to set up a scheme but we are a smalll company