If you were setting up a cycle to work scheme for a small business- probably less than half a dozen employees who would avail themselves of the scheme- which one would you use?
Are there any that are “better” than the others for the employee?
Are there any that will be easier to manage for the employer?
A quick google reveals quite a few competing schemes- are they all the same?
Is it worth checking what local bike shops use? (there is a halfords close to where the majority of employees live, plus jejames, edinburgh cycle, evans and various independents within a 20 mile radius)
cheers

Plain old Cyclescheme.

Or just do it yourself internally. Get your co to buy the bike by BACS from the local shop of your employees choice so they can get better deals/sale bikes etc.

Plus one for set up your own scheme. I did a few years ago so not difficult, easy to administer and can chase better deals on bikes.

Definitely do it internally if possible – maybe get hold of a contract from one of the big schemes and adapt that. It should be pretty simple to set up from a payroll perspective once you have a contract.

Bike shops will probably prefer to deal direct…

Hmmm don’t think the manager will go for that- she has enough to do running the business. I think we need a ready made option.
How is plain old cyclescheme different from say halfords c2w?

The company could just buy the bikes, and let the employees use them.

Cost paid from gross profit, VAT back and before corp tax etc and no BIK issue for employees (you could either lower their wages or reduce bonus if needed). Also doesn’t need to apply to all employees.

Works for me, but its my company.

But if you’ve got to have a C2W scheme, talk with your local LBS – I know my old one was able to sort out for others.

docrobster – you a partner?
I’m toying with the same thought processes…could you not just run it yourself as a practice expense (if it’s to be used for visits etc…)

DrP

B R – I was thinking of doing something like that myself – buying the bike through my Ltd company.

I’m a one-man Ltd company though, so the employee using it would be me, and I’m also the Director. Does that make any difference?

Yes DrP I’m a partner.
I see it more as a way of boosting morale a bit in these cash strapped times. No pay rise for staff 3 years running, people getting cheesed off.
I hadn’t thought of buying one for visits- I’d certainly be up for it but we are a bit too rural to use a bike for all visits! My partners a bit too keen on their cars I think.
Salaried GP’s nursing and admin staff could all use it. If I was salaried I’d have made it happen years ago!

I hadn’t thought of buying one for visits- I’d certainly be up for it but we are a bit too rural to use a bike for all visits!

Patients are very quick to get used to it – I’ve met some ‘cyclists’ that you wouldn’t have expected, if it wasn’t raised by themselves (a 90 yr old couple who used to ride fixed tandem, for example!)

Green is the way forward! (there was a ‘green renal medicine’ diploma/job that a colleague of mine took – I’d love to ahve a similar one in GP)

DrP

Aye there’s a fair few cyclists about- have a nice chat to a guy in his 80’s regularly who tells me all about his fantastic electric assist jobbie.

I used Evans in the end because they do it all for you and you can add to the £1000 to get a better bike. But mostly because they apply it to sale bikes too. Most lbs won’t do this sadly.
Having said that, I won’t be using Evans next year as they have been terrible with after sales. I’ll spend more and use my lbs.
The paper work / effort involved for a handful of employees took up about 20 mins of my time, if that.

We took the DIY approach as well, not much paperwork involved. I’m sure you could find the paperwork online without too much trouble.

IHN – Member
B R – I was thinking of doing something like that myself – buying the bike through my Ltd company.

I’m a one-man Ltd company though, so the employee using it would be me, and I’m also the Director. Does that make any difference?

This is pretty much what I did, following the c2w scheme but not using anyone. (Assuming your low salary topped up with dividend). Company buys bike increase salary by the amount you pay back on a monthly basis, this will take you into paye & nic but the deduction comes back off to put you back to the thresholds. Company gets VAT back and Tax relief on bike. When transferring ownership of bike, back to yourself you may want to be a little more realistic about value than say 5% of purchase price as your the director, just to save any potential comeback later on. (Don’t forget you will need to add VAT on when selling it to your self)

The trouble is there is a definitive maximum of 1k to spend on the bike and accessories, adding money personally to get a better bike doesn’t or shouldn’t work even for normal employees wanting to pay a bike shop the extra personally. the reason being, the bike can not be owned by two or more parties.

I’m thinking of buying a better bike, and thinking I might just get the business to buy it regardless of cost, claim vat and tax back, and take the benefit in kind on it, not worked the numbers through thoroughly yet, but your saving 20% tax and 20% VAT straight away on full price of bike, Plus all upgrades/oooppps i mean repairs could be paid for by the business ;-).

I’m thinking of buying a better bike, and thinking I might just get the business to buy it regardless of cost, claim vat and tax back, and take the benefit in kind on it, not worked the numbers through thoroughly yet, but your saving 20% tax and 20% VAT straight away on full price of bike, Plus all upgrades/oooppps i mean repairs could be paid for by the business ;-).

tbh That’s all I did. It was the guy at BikeTreks that explained it to me. No messing around with salary deductions and the like. I don’t bother with repairs/spares through the business, but then I’m not using it for business use – if I was, I would.

If you are on the VAT FRS scheme, then you won’t save the VAT unless you specificially put it through (I didn’t as I was happy with the corp tax, NI (empe and empr) plus income tax saving plus didn’t want to draw ‘attention’).

If you’re a 1 man ltd company, it’s actually much easier than that. There is no requirement to make payments to hire the bike. The company can just buy a bike and let you use it.

Increasing your salary just so that you can reduce it again with the payments is actually a bit dodgy – read up on what constitutes a “salary sacrifice”.

Also, if the company just lets you use the bike, rather than having you pay for a hire agreement, I don’t think the £1k limit applies as that’s a credit limit on the equipment being hired.

On the other hand, if I were going to do this on a bike worth much more than £1k, I’d probably keep some records to prove that it really was being used primarily for work purposes.

As it’s your company, there’s no need to be too concerned about when ownership is finally transferred. Wait 6 years, and then it’ll be “worthless” (according to the HMRC approved table), so your company can just give it you for free and it’s not a taxable benefit.

so as a partner of my own (shared)Podiatry business I could get the company to buy my next bike and put it down as a bike used for ‘home visits’.
would I benefit from any savings as my business is VAT exempt (medical services) I guess it would still come off taxable profit?

how would this purchase affect my partner ?

how would this purchase affect my partner ?

Let him spend an equivilent on his hobby?

im not sure we could get surfboards/wetsuits passed by the accountant!

If you’re a 1 man ltd company, it’s actually much easier than that. There is no requirement to make payments to hire the bike. The company can just buy a bike and let you use it.
Increasing your salary just so that you can reduce it again with the payments is actually a bit dodgy – read up on what constitutes a “salary sacrifice”.
Also, if the company just lets you use the bike, rather than having you pay for a hire agreement, I don’t think the £1k limit applies as that’s a credit limit on the equipment being hired.
On the other hand, if I were going to do this on a bike worth much more than £1k, I’d probably keep some records to prove that it really was being used primarily for work purposes.
As it’s your company, there’s no need to be too concerned about when ownership is finally transferred. Wait 6 years, and then it’ll be “worthless” (according to the HMRC approved table), so your company can just give it you for free and it’s not a taxable benefit.

I see what your saying, but do not agree, just letting your self use a company assets for private use brings with it the Benefit in kind rules, the whole C2S is purely away of trying to avoid paying class 1a nic on a business asset being used for private use ( private use being travelling from home to one place of work. ie fixed office) plus the tax and VAT thing again is the incentive the government are giving people and company’s to help obesity and green issues and therefore allowing people tax relief on bikes, so as long as they use it for commuting to their place of work of course.

I certainly think you could have an issue with tax man if bike is greater than 1k in This scenario because that limit the revenue have specifically stipulated. On the assumption you can get a quality bike for that money.

I don’t see anything dodgy about increasing your salary and reducing it again, I only mentioned that as most sole/owners directors will pay themselves minimum salary and therefore there is no tax saving to be had from a salary sacrifice scheme. So as a director/ owner you can pay your self what you like, the fact that you increase your salary so you need to pay tax and nic is your decision, the fact that you then use a Revenue approved salary sacrifice scheme which happens to bring your salary back down to below the threshold, is just smart tax planning IMO. Same applies to child tax vouchers.

As i said earlier the benefit in kind route for more expensive bikes MAY work out cost effective, but would be depending on the individual circumstances, Going 6 years though of paying tax on the BIK would probably cost you more than what the company would have saved in the first place, again you would have to do the maths on each instance for that one.

As for partners in a firm or sole trader that’s totally different, arguably easier as no BIK rules, but you would need to make a fair private use proportion to add back for tax purposes.

I see what your saying, but do not agree, just letting your self use a company assets for private use brings with it the Benefit in kind rules.

Correct, but that is exactly what the C2W tax break is all about. It allows a company to make bikes available to employees and for it to not be considered a taxable benefit. Read the legislation:

http://www.legislation.gov.uk/ukpga/1999/16/section/50

I certainly think you could have an issue with tax man if bike is greater than 1k in This scenario because that limit the revenue have specifically stipulated.

No they haven’t. The £1k limit is specified by the OFT, not HMRC, in that that is the limit on the group credit licence issued to all companies for the purposes of operating the scheme. You need a licence because the “hire” part of a normal C2W scheme falls under the Consumer Credit Act. If there is no hire period and the company just lets you use the bike, then I believe it’s not covered by the CCA, so no licence required, so no £1k limit.

There’s plenty of guidance (e.g. Cyclescheme’s FAQ) that says that if your company has its own credit licence, the £1k limit doesn’t apply.

I don’t see anything dodgy about increasing your salary and reducing it again,

Read this: http://www.hmrc.gov.uk/manuals/eimanual/eim42774.htm and the stuff about when a salary sacrifice is effective. I’m not certain on this, but I think this wording is to ensure that your salary is actually reduced.

I’m not sure what you mean by the “benefit in kind” route. I would expect that if you buy the bike and your company let’s you use it (other than in accordance with the C2W rules), then the taxable benefit is equivalent to the value of the bike, so you don’t save anything at all. Same as using your company to buy any other equipment for personal use.

Provided that your use of bike is in accordance with the rules in the legislation above, your employer can just buy any bike it wants, and let you use it, without generating a taxable benefit.

The company could just buy the bikes, and let the employees use them.

This is what I did through work. One thing to be aware of is that in this situation the company is responsible for the bike being in a safe condition. I appointed myself as bicycle safety officer. 🙂 None of the others have taken up the opportunity although one keeps threatening to do so.

Don’t overthink this, worse case put it through as a computer or the like 🙂