I'm looking at getting a road bike on the the cycle to work scheme and am tying to work out costs. However there seems to be a charge at either end...10% from bike shop admin at the start (other shops vary with admin fee) and then 10% of cost of bike+vat at the end to go to the employer (was expecting something around about that amount). The two fees serious eat into the savings you can make bringing it down closer to 20-25%. Has anyone else experienced the same?
Bike Forum
Cycle to work - fees
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Posted 3 months ago #
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clareymorris - Member
Check that bit I've put in bold. Depending on how long you keep the bike - and the initial price of it - it can be much higher.
I'm looking at getting a road bike on the the cycle to work scheme and am tying to work out costs. However there seems to be a charge at either end...10% from bike shop admin at the start (other shops vary with admin fee) and then 10% of cost of bike+vat at the end to go to the employer (was expecting something around about that amount). The two fees serious eat into the savings you can make bringing it down closer to 20-25%. Has anyone else experienced the same?Posted 3 months ago # -
True inded - we do have our paperwork to say it will be 10%+vat. we are paying over 12 months but yes a VERY valid point some places will charge up to 25% so I believe.
Posted 3 months ago # -
Never had an upfront fee myself. Your employer are not allowed by law to tell you in advance how much you maybe charged to buy the bike at the end of the hire period - if they do so, it becomes Hire-purchase which is not eligible for tax relief. That's if you are charged anything - they don't *have* to charge you, but you do have to pay something as the Tax man has said that they want the tax on (x) percent of the original price (x varies depending on the original price).
Posted 3 months ago # -
clareymorris - Member
In which case your HR department need to study the HMRC rules on this, because they are about to break the law.
True inded - we do have our paperwork to say it will be 10%+vatPosted 3 months ago # -
How come Druidh? We are going through the already established NHS scheme which states 10+vat.....sounding v comlicated already!!
Posted 3 months ago # -
nbt - Member
This ^
Your employer are not allowed by law to tell you in advance how much you maybe charged to buy the bike at the end of the hire period - if they do so, it becomes Hire-purchase which is not eligible for tax relief.Posted 3 months ago # -
You could get a 0% credit card and haggle with the shop, and come out cheaper, without the restrictions of the C2W.
Having said that, my first C2W ends in March, so I've no idea what I might have to pay.
I worked on about a 25% saving overall, with no hassles, which seems reasonable.
Posted 3 months ago # -
Hmmmm - not really happy about signing up nless I know exactly what I am paying!
Posted 3 months ago # -
Interesting stuff - will see what work say about it!
Thanks guys
Posted 3 months ago # -
this help
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Posted 3 months ago # -
Tricky what site is that chart off?
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Posted 3 months ago #
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Having looked into the current scheme, I'd say it is more faff than it's worth, and you can get similar savings using a 0% credit card or payment plan with a shop.
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Posted 3 months ago #
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Personally I wouldn't bother and (as above) just find a discounted bike outside of the scheme.
Posted 3 months ago # -
I wouldn't listen to Druidh on this tbh. He said the same thing to me a few months back and it was cobblers then, still is now.
Some shops take the 10% handling fee from the price of the voucher (e.g. a £1,000 voucher is actually worth £900). Other don't but the 10% is added to the initial price of the bike.
At the end of the year you can you have 3 choices.
1. Return the bike (pointless really)
2. Pay a 'fair market price ' for the bike (18% or 25% of the net cost - depending on the original value) still a saving but not that much
3. Enter another 3 year deal (with cyclescheme etc) which costs only 3% or 7% (if original value was over £500).I'm going for option 3 and will save over £300 on a £1,000 + bike.
edit: or see diagram above d'oh!
Posted 3 months ago # -
We are using the SME HCI scheme used for the NHS...and looking further I think the 10+vat is a disposal fee although
"To date where bikes have been sold under a separate
agreement after the loan period has finished no bike has been valued at more than the Disposal Fee"suggets they would charge the same to keep it!!!
Posted 3 months ago # -
Some shops take the 10% handling fee from the price of the voucher (e.g. a £1,000 voucher is actually worth £900). Other don't but the 10% is added to the initial price of the bike.
this may be becasue "cyclescheme" are actually a profit making company who charge bike shops 10% of the purchase price for the act of sending out a voucher. You don't *have* to go through cyclescheme, but thanks to a shrewd choice of name they seem to have become the default for most people. For the purposes of payroll, it's just another tax code and deduction, not that hard to administer, but cyclescheme seem to be on a winner
Posted 3 months ago # -
clareymorris, sorry if you know this but if its from 'Bikes for the NHS' its a separate private company (not cyclesheme or B2W ) and after you pay the VAT then its not really any cheaper now than a decent discount from the LBS. I've had 2 bikes from Bikes for the NHS but wouldnt have another now that the tax changes have come into effect, id get a better deal LBS with a healthy discount and 0% finance. If you get one through LBS but financed via Bikes for the NHS the LBS get charged a fee, think it was 15% with mine.
edit- SME HCI= Bikes for NHS
Posted 3 months ago # -
Pay a 'fair market price ' for the bike (18% or 25% of the net cost - depending on the original value) still a saving but not that much
The actual requirement is that you pay the taxman the tax on that amount. Most people seem to make the assumption that you have to pay that amount, which kind of wipes out any tax saving, but make the sale of the bikes a nice little earner for the company, who've already recouped the price of the bike by claiming the text back off the tax man, then collecting hire fees fro the users...
Posted 3 months ago # -
Scruff - yes the Bikes for the NHS is the scheme we are going to use. I may well not bother!!!!!
Posted 3 months ago # -
It was worth doing and SME HCI/Bikes for NHS seem decent enough but now the tax gubbins has changed a hefty LBS discount may work out cheaper.
Posted 3 months ago # -
I have 4 months left in mine and i would not do it again, the savings are not really all they are made out to be. I knew this at the time and am happy with the deal but just be aware.
Loads of shops do interest free credit these days so getting a bike is less of an issue if you dont have the cash.
The restrictions are all just a bit much.
Posted 3 months ago # -
I am looking at alread discounted bikes so I think it probably would give me more of a saving........will just make sure I read the T's and C's thoroughly!!!
Posted 3 months ago # -
Check the shops will do the discounted bikes on bike to work; many don't as the scheme already eats into too much of their margin.
Posted 3 months ago # -
mustard - Member
Hence the possible admin fee mentioned in the first post....
Check the shops will do the discounted bikes on bike to work; many don't as the scheme already eats into too much of their margin.Posted 3 months ago # -
Hi Guys and Girls
my employer I think runs the C2W scheme rather than the Cyclescheme does anyone know if they also offer exstention of the scheme like the Cyclescheme?Posted 3 months ago # -
They do the discounted bikes but add 10% back on...
Posted 3 months ago # -
+1 on it being better to do 0% CC + buy a 2011 sale bike, cheaper and less hassle.
Posted 3 months ago #
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