[Closed] Cycle to work scheme

I'm not sure how your figures add up... according to what you have put up above you're paying the £927.46 over the year out of your gross salary, so that means that you are paying the VAT, but not paying for the finance charge.

Say the bike is £1000 + £91.11 finance charge - the Vat of £163.65 = £927.46 /12 = £77.29 per month

Aaaah.. in that case you are getting stiffed for it, and that's got to be by your company as we have our work scheme through Halfords and there is no finance charge...

Oh, and whoever worked out the VAT figure has got it wrong, it looks like they are using the 17.5% figure...

Yeah, no finance charge here and we use Halfords. You do know though that you don't have to only get bikes that Halfords stock? - eg they can get Specializeds, Giants and so on

The Vat looks right but 15% of £1091 🙁

Why the finance charge then?? I'm miffed!

Yeah clubber, its the finance charge thats the problem! I'd like the d-jab for £999 though!

It's not 15% of 1091 though, that's the figure with 15% added so you need to multiply 1091 by 100/115 to get the exc-VAT figure...

£1091` is the price of bike plus the finance!

I know.. but, assuming you do actually pay VAT on the finance figure, you have £1091.

To work out the exc-VAT figure for that value you need to divide it by 115 and then multiply it by 100.

That gives £949 as the exc-VAT figure for that if VAT is at 15%. If you take VAT as being 17.5% then you get £928.

Oh, i added £1000 to the £91 and times'd it by 0.15 which gave me the same as work quoted of £163!

I'm still £77 worse off now and i think someone is having my piece of pie!

Who said pie? 😀

They do a Barrymore pie at Mad o Rourkes pie factory in Tipton (faggots and peas!) FACT 😀

surely vat element depends on the vat status of your company?

?? Its Network Rail BTW

I did the RTW scheme 2 years ago - I organised it with Evans cycles with their forms. My employer sent a cheques - got a voucher - spent the voucher with evans and payed my employer back over 12 installments (monthly) out of my gross salary ex VAT as he reclaimed that.

Doesn't sound such a good deal you buying it on finance - I presume you company wont actually finance the purchase? Are you therefore getting a loan charge?

TBH I think its just an additional charge for "finance" The payment works out about a fiver a month more than the Evans calculator works there scheme out at, butv thats not the point! Think someone is getting a £77 backhander

Kinda666,

sounds like your company may be using an external finance company to fund the scheme. This is common among companies who aren't that cash rich (or scared of the potential take up among employees for the scheme, as at the end of end of the day they have to initially fund it)but want to run the scheme. Therefore the savings aren't as great as they pass on the cost of borrowing the money to you.

sorta sucks, and your savings won't be as great, but you'll still make the savings compared to a normal purchase, and it's spread over an amount of time. Seems correct to me.

mail in profile if you have any more questions.

hope that helps.

Cheers Jimbo, Its only a few quid extra per month and after the tax saving it'll be about50p, really just wanted to know if this charge was the norm, or if Network Fail was robbing me even more :o)

Nah - they're not robbing you, just reducing the risk on their part to zero. (well they actually do quite well once they've taken their reduced NI and the final FMV payment is taken into account)

J

Doesn't seem too bad to me; we don't get charged the finance figure at our place; but we also don't get the VAT off either, so I'm on about £82 / month for my £1k bike - your still up on that !

As far as I'm aware the actual salary deduction is lower due to not paying tax/NI on the ammount of the cost of the bike.
According to the halfords c2w website the actual lower rate taxpayer cost is £54.66 and higher rate taxpayer cost is £46.74.
The cost also differs if you're paid four weekly or monthly.