Is it possible to use the £1000 voucher towards a custom build and pay the extra or is it for off the peg bikes only?

Complete bike only

And if I instruct a bike shop to build it for me first? I really want to get my hands on a Singular Swift.

If you can get a full build for the value of your £1,000 voucher, you are OK.

However, you should consider just how much money you will really save. With enforced “market value” figures and the application of VAT on your payments, most folk are now realising that they can get a better deal by approaching their LBS directly, perhaps getting discounts on older models etc. The days of a true 25/40% saving on RRP are well and truly over.

So you think the scheme is not worth it?

It’s not that it’s not “worth it”. Just make sure you’re going into it with your eyes open. The schemes are still advertised as providing a 35-40% saving on list price, as well as effectively providing interest free credit for 12 months. However recent changes in the final valuation that you have to pay before you can claim ownership on the bike have meant that the actual saving you make is more like 10-15%. still not to be sniffed at if interest free payments are an important factor to you.

So you think the scheme is not worth it?

it depends – if you think you’ll keep the bike for 5+ years then you’ll save approx 40%. Its the ‘final’ valuation fee that has ruinied it…

for example….

i bought a 2009 Cannondale Badboy ultra in the sale rrp 1400 reduced to £999 in April 2010.
a years payments @£52 each = £624
i bought the bike from teh company i work for last month – for £175
so total cost for two years riding has been £774 – half the orriginal rrp.
I sold the bike for £550, so its actually cost me £224 for the two years.

If i had bought the bike at the end of the contract term it would have cost me around £220, but if i’d waited 5 years (6 years of owning the bike) it would be mine with no final payment. Basicly, the longer you own it the cheaper it gets.

now heres the dodgy bit, the final fee is provided by governement advice for second hand bikes @ 20% of purchase price for the 1st year, reducing to )% over 5 years. If the company you work for wanted to, they could get a shop estimate and then try to charge you that – so you rent the bike for a year at around £600 and then have to by it form teh firm 2nd hand for another £600……

A lot of companies / people see to find restrictions where there are none. I run the scheme at our company and by “scheme” all it really is, is an interest free loan deducted gross from salary over a period of time.

There is no real “scheme”, its just an allowable tax free benefit. You dont sign some paperwork and send it off to the government or apply to join a scheme or anything like that.

So long as I see an invoice for a bike then I deduct total that from their salary, gross over say 1 to 5 years. Simple. I bought a credit licence so staff are not stuck with the £1000 limit. My bike was about £6500.

Some staff even bought the bike on their company credit card which was even eaiser, others got the shop to invoice the company. Whichever was eaiser for them.

At the end of the period Ive depreciated the bike to zero, so they pay me a tenner and its theirs. It our balance sheet, not the governments, and I take the view as to what the bike is worth and dont use the governments “advice” since they dont know much about mountain biking.

It can be that simple but companys and HR departments seem to get sucked into making it harder and more complicated.

Its a shame most company accountants / HR staff are not bike riders.

So it wouldn’t be possible for a family member, who can get this scheme where they work, to buy a bike for ‘themselves’ but then I buy it off them for the reduced price?

Trimix, that just sounds like a company doing a decent thing by offering company loans, but its not a bike2work scheme is it? (i dont know anything about bike schemes btw) just trying to understand the differences and if our company can do this

Trimix is right IMO.

The government has provided a tax break. There is no requirement for employers to deliver this tax break through an “official” scheme, but many choose to do so.

All that has to be done in the eyes of the law is for the accounting to be performed correctly.

Company buys bike. Reclaims VAT. Deducts remaining cost of bike from employee’s salary before tax, possibly over a number of months.

There appear to be ways of minimising the final market value payment without breaking the rules…
http://www.bikeradar.com/gear/article/buyers-guide-to-uk-tax-free-bike-schemes-18360/

What happens if the company goes bust or you get finished for one reason or another?
Not exactly a rarity these days

What happens if the company goes bust or you get finished for one reason or another? Not exactly a rarity these days.

Nope. And to be valid, the scheme can’t have any guarantee that you buy the bike at the end of the scheme.

On the other hand, if you have sufficient confidence in your future at your employer, and the scheme is well set up, you can still save a decent amount.

Our scheme still sees 35% (basic rate) or 43% (higher rate) savings, and you’re free to buy from any bike shop and there’s no vouchers involved so you can buy at sale prices. My bike was bought in components from various on-line shops, but it adds up to a complete bike so there’s no problem with the company providing it to me under the tax break.

Since I run the “scheme” it does what I think it should do.

I had a nice suprise in the post this morning. I signed up to my scheme under the old rules where to own the bike outright you would pay a nominal sum (a months rent) to own the bike outright.

My last payment came out in Febuarys pay packet. The letter says I now have to pay under the new “fair value” rules. Nowt fair about that! Go into it with your eyes wide open.

Most employers farm it out to Cyclescheme who administer it to rigid guidelines. I got a road bike this summer because my employer offered 3 months grace on the VAT ruling-anyone signing up before Oct 1st stayed on the old VAT regime (employer paying it for me which is nice).

If youre after a bargain bike and not too fussed on badge (not the OP) a New old-stock from somewhere like Pauls Cycles would get you more choice, no price cap and often a bigger discount.

As above, best to think of it as a bike on interest-free credit and treat any saving you might make as a bonus. I think whether it’s worth doing depends on what you want and what you’ve got available to you on credit or in the sales.

I replaced my nicked commuter in 2010- if I wasn’t being fussy I’d probably have just chosen something from Evans on credit, but I wanted a Roadrat and Cyclescheme let me get one on the same sort of terms.

At the end of the period Ive depreciated the bike to zero, so they pay me a tenner and its theirs. It our balance sheet, not the governments, and I take the view as to what the bike is worth and dont use the governments “advice” since they dont know much about mountain biking.

Since I run the “scheme” it does what I think it should do.

That’s fine, but if HMRC take an interest you should expect to have to justify why the bike was only worth £10, or your employees will be getting an unexpected tax bill.

I had a nice suprise in the post this morning. I signed up to my scheme under the old rules where to own the bike outright you would pay a nominal sum (a months rent) to own the bike outright.

My last payment came out in Febuarys pay packet. The letter says I now have to pay under the new “fair value” rules. Nowt fair about that! Go into it with your eyes wide open.

When did your scheme start? The HMRC clarification was well over 12 months ago now.

Unfortunately what you signed up to won’t have guaranteed a final sale price (or at least it shouldn’t have done).

Have you not got the option to extend until the bike has depreciated to a lower value?

18 months ago so August 2010. We can send a picture and some info on wear etc to some third party for evaluation, do nothing and pay the HMRC value or return it. No option to extend it.

Got a Croix der Fer so it’ll be in the higher percentage bracket. Feel hard done by but I guess there’s nowt that can be done about it (especially since I actually use the bike to get to work unlike a lot on here who’ve used it as an excuse to buy some niche bike on the cheap, but that’s another arguement for another day)

Don’t think I’ll be getting a new one now. Seems like a good thing has come to a end.

i had the same problem darkcove…. but to be fair, it does say in the original contract ‘sale at fair market value’ – all the HMRC have done have clarified what that means to stop some people taking the piss and buying the bike only to keep it in the box and sell it at the end of the year for proffit.