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£1000 would cost me £680. Plus £250 buy at end. But because I want the P-X carbon cross bike, also add £100 admin fee.
= £1030 sad face
pretty sure I've heard of other retailers saying "C2W? oh, in that case the price has gone up" which is kinda understandable if they take a 10% cut. Plenty of places will do you a 10%ish discount giving another 10% to C2W isn't going to work is it?Not if you are P-X, who helpfully pass it on directly to the 'customer' at the point of the 'hire'
don't a lot of companies have nothing to do with it and everything gets deferred to a C2W agent who generally won't let you off?Isn't this the employer? I just asked my boss if I had to pay anything at the end of the scheme and got a "Nope".
jamiep - Member
£1000 would cost me £680. Plus £250 buy at end. But because I want the P-X carbon cross bike, also add £100 admin fee.= £1030 sad face
If you could get your company to run it's own scheme then no need for £100 admin fee and if you just extend the lease then you only have to pay 7% £70 not £250
That's £750
[quote=eskay ]My company gave the bikes to us (this is current as the scheme has only just ended). We just had to pay the taxable benefit.
Given the calculated tax cost, why don't more companies just do that instead of all the other complicated stuff? Seems the best solution for all concerned.
The main thing for me is the status of the bike at the end of a year and beyond, which for me diminishes the saving further.
This depends on the company of course: but at the end of the first year, getting the option of an extended lease means you still do not own the bike, right? Our company offers this, for a tiny fee you continue to use the bike for 5 more years. For me though, after a year of paying money, I would want to own the darn thing. It basically turns into a 6 year lease with the bike effectively worthless at the end. I wouldn't feel like it was mine, or would want to make upgrades. I'd rather pay a bit more and own it from the beginning, with freedom to make changes and re-sell at an OK price whenever I choose. Obviously i'm the wrong kind of person for the scheme and it works for many, but it's not that great a deal when you think beyond the bottom line costs. It's not good value, unless you are on a higher tax bracket.
aracer - Member
eskay » My company gave the bikes to us (this is current as the scheme has only just ended). We just had to pay the taxable benefit.
Given the calculated tax cost, why don't more companies just do that instead of all the other complicated stuff? Seems the best solution for all concerned.
If it is done like this after the 12 month lease do you effectively pay tax on the reasonable disposable value i.e. 25% so in effect as a lower rate tax payer I would pay 5%? Do you have to pay NI?
See, what I don't understand is why would I enter into a credit agreement (even a very favourable one) to buy a bike, with no guarantee that I'll get to keep the bike at the end of it.
All the info on the C2W website (see the link posted on first page of this thread) - says that either C2W or the employer 'may' offer the bike to the employee. May Offer? Why the ambiguity?
I asked my employer what happens at the end of the scheme - they had no idea.
For that reason, I'm out.
Just checked our C2W page and it says to make sure you insure it, how does that work then, I can't claim for a company laptop on my home insurance so how can I claim for a company bike? and if my insurance does replace a stolen c2w bike who owns it?
v.complicated.
Evan's website has a very handy calculator which tells you the costs, savings and monthly payments depending on your price of bike, accessories and salary/tax.
You're not buying the bike (unlike a 0% finance) you're leasing it - with an option to buy later
You are all completely missing the point.
C2W was dreamt up by a minister who was struggling to convince his wife that they could afford a new shiny bike. Even MrsMC fell for it 😆
[quote=fr0sty125 ]If it is done like this after the 12 month lease do you effectively pay tax on the reasonable disposable value i.e. 25% so in effect as a lower rate tax payer I would pay 5%? Do you have to pay NI?
Yes - it belongs to your company and if you get given it for free at the end of the lease then it's a benefit in kind of the disposal value. I'm not an accountant, but I believe only tax, not NI is payable on benefits in kind.
The retailer looses 10% of the sale to the scheme, which they often cant afford, especially considering how time consuming c2w sales tend to be
Rubbish. If they can't afford that then they don't need to offer C2W
I know of at least 6 people who have purchased a bike through C2W who almost certainly would never have got a bike otherwise, retailers may 'lose' 10% but they are selling more bike because of it. And any sensible LBS would also use this as an opportunity to 'upsell' and sell clothing, luggage, service plans etc as well.
The one thing I can say about Cyclescheme is they are very upfront with costs etc, non of this should be coming as a surprise to you now.
See, what I don't understand is why would I enter into a credit agreement (even a very favourable one) to buy a bike, with no guarantee that I'll get to keep the bike at the end of it.All the info on the C2W website (see the link posted on first page of this thread) - says that either C2W or the employer 'may' offer the bike to the employee. May Offer? Why the ambiguity?
You would not be entering into a credit agreement, you would be leasing the bike.
If they guaranteed you would own the bike then they would be offering you credit, that is why they have to say say they 'may' offer to sell.
I think in the history of C2W scheme , it is very unlikely that anyone has not owned the bike at the end of it. Certainly I have never, ever heard of this happening.
Lots of people struggling with the concept here.
No offence franksinatra, but many can't afford it and can't afford to turn away c2w business either.
"I drink your milkshake!"
[url= http://singletrackworld.com/forum/topic/cyclescheme-why-so-bloody-vague ]Almost identical thread[/url] when I came to the end of my year.
Do the 3% deposit, then you own the bike. Don't worry about the 3 year thing, that's just paperwork.
I paid £66, shortly after received an email saying I'm eligible to start a Cyclescheme purchase again!
Its not a Bike, its especially not YOUR bike its an "Asset" owned by the C2W scheme operator.
HMRC got a bit huffy a couple of years ago because C2W schemes were being, oddly enough, used as a means for private individuals to acquire goods without HMRC getting their slice, the "Transfer of ownership" fees were in many cases laughably small, HMRC decreed that they wanted tax revenue's proportionate to the actual value of the bicycle, not the price it was sold at, the bike might be sold to you for a nominal £50 but if its really "Worth £750" HMRC want tax revenue based on that.
The work around? quite simple really - Extend that "lease period", allowing the bike to de-value as much as possible before you transfer ownership, a 12 month old bike holds a fair bit of its original value, a 48 month old bike could (potentially) be written off or at least valued at a fraction of its original sale price...
Essentially OP the C2W company are giving you options to try and help you avoid as much tax as possible...
Buy the bike now if you want, extend your lease period for a nominal sum and you [U]may[/U] pay very little in another 3 years to actually, finally own the thing, but basically, by degrees C2W will save you 1% of bugger all, so just get used to it.
No offence franksinatra, but many can't afford it and can't afford to turn away c2w business either
Exactly, better to sell bikes and lose 10% then not sell bikes at all. They just need to use a bit of initiative, and business drive to make sure they make that 10% back in other areas (risk now that we enter into a whole LBS thread)
Or better still to give away 10% in goodwill, which could produce a return in business, than give it to a bunch of cynical arsebags who don't care much if it's you or the next shop.
I agree it's a good "in" for a sale. For the retailer though it's the most expensive finance available, and as such sucks.
And nooo.. no LBS thread. It's a reasonable matter to choose between "I'll give my money to whoever supplies me the cheapest" and "I like to know that the supplier isn't losing out because of the way I choose to pay".
I've no doubt the paper work was all legit but the first iteration of c2w at our place was sold to us as more like a credit agreement, there was no "the bike doesn't belong to you" it was described as we buy it for you and you buy it back tax free over 18months.You would not be entering into a credit agreement, you would be leasing the bike
I await all the missold c2w cases in a few years 😉
Absolutely clear when our employer started C2W that it was a lease deal - the employers blurb, all the Cyclescheme documentation stated it clearly, there was specific reference to the payment at the end to retain the bike. I calculated the costs including the final payment, could probably have got a deal or 0% somewhere that would have got close to it, but it was a convenient way to make a small saving even after taking that into account.
Mind you, my employer is HMRC.
So it will be interesting when our 12 months come to an end in April/May, and I was one of the first to take it out. I shall no doubt be starting my own thread in due course.....
Flaming gits at Cyclescheme decided to apply this retrospectively to current agreements when HMRC updated the rules. They didn't need to, I argued that it wasn't what I signed up to but was told essentially tough. I paid the fee to keep for the further period, then bought it and sold it immediately. Go to your LBS use their 0% if they do it.
[quote=Spud ]Flaming gits at Cyclescheme decided to apply this retrospectively to current agreements when HMRC updated the rules. They didn't need to, I argued that it wasn't what I signed up to but was told essentially tough.
You were probably told that you misunderstood what you signed up to (as above, it is a lease, with no obligation on them what happens at the end of it).
See, what I don't understand is why would I enter into a credit agreement (even a very favourable one) to buy a bike, with no guarantee that I'll get to keep the bike at the end of it.All the info on the C2W website (see the link posted on first page of this thread) - says that either C2W or the employer 'may' offer the bike to the employee. May Offer? Why the ambiguity?
I asked my employer what happens at the end of the scheme - they had no idea.
For that reason, I'm out.
There isn't any ambiguity. It is common for cycles provided under salary sacrifice arrangements to be sold or transferred to employees after the end of a period of loan. [b]The income tax and NI exemption for certain loaned cycles will be prevented from applying if any agreement builds in from the outset an automatic transfer of ownership to the employee at the end of a loan or hire period[/b] . However, where this is not the case, there is no contradiction in an earlier exempt loan being followed by a decision by the employee to buy the cycle.
Not if you are P-X, who helpfully pass it on directly to the 'customer' at the point of the 'hire'
That's compensation for dealing with PlanetX! 😀
spud
same thing happened to me - had a bike on the scheme (a folder that I did use everyday for work, not a bling 140mm travel 'commuter') and HMRC changed th rules halfway through. Because the whole 'extend the lease' hadn't been dreamt up and there were only a couple of us on the scheme my employer simply said this is too complex and stopped running the scheme and I was left with a £250 bill for some reason - in the end my bike was RRP £975 and cost me about £920! I might as well have gone for a special deal or 0% etc.
I argued the toss and my employers ended up footing the bill and I just paid the tax on it as a BIK
Great scheme cocked up
Bike shops also pay a premium for 0% finance.
I've seen a few that operate a similar no or little discount policy on Finance and Cyclescheme.