Has anyone use this firm for a cycle to work bike?

The cycle to work scheme with no £1000 limit

I think canyon use them to get c2w bikes through them.looks interesting.

I am sceptical of their claims surrounding the £10k limit and I would be interested to see comments from someone more knowledgeable. Similar the lack of a “final” payment at the end of the taxable benefit deadline seems at odds with the tax law.

If memory serves correctly the limit for bicycles on any kind of cycle scheme is £2000, end of story. [Edit4: £2000 is what my own employer allows but perhaps higher is possible]. The £1000 figure that gets quoted is actually due to the consumer credit laws, and is completely meaningless if (for example) you work for a bank that has the relevant FCA approval. I could buy a fancy e-bike for £10k and avoid paying £4k in tax and HMRC won’t mind? Nah.

Also, I think usually it’s your employer that needs the FCA credit license so I suspect some extra wrangling would be needed between GCI and your employer.

That’s a nice waffle based on very little actual knowledge 🙂

Edit: so in this case GCI itself owns the bike financed by a third party (they cite Akira Finance, who charge the oh-so competitive 8% but that’s OK because it’s covered by the employers NI saving…)

Edit2: they state GCI is the only scheme without the £1k limit, which as above, is incorrect (I personally went above £1k with cyclescheme.co.uk)

Edit3: the loan period is 5 years (taxable benefit), rather than the usual 3 years for cyclescheme.

My colleague has bought a Giant Fathom E with no issues. £3500 bike has cost him £2400. He’s decided to pay it off in just 4 months. They were very helpful in answering all his questions and those of our accountant. Certainly how I’ll buy my next commuter.

I have no doubt it “works” avdave2… I’m just not convinced it’s 100% compliant with the HMRC regs 🙂 4 months is absolutely definitely within the taxable benefit period so your colleague should check carefully what he’s “paid off”! He shouldn’t “own” the bike in <5 years without paying some additional charge.

I read a bit more on the GCI website and one difference to normal schemes is that GCI owns the bike, not your employer. Their arrangement with your employer is then more like a generic salary sacrifice benefit (like getting a dining card or something). Again, I’m not sure whether this is actually strictly permitted in law as the only docs I’ve skimmed talk about /employers/ loaning cycles and cyclists’ safety equipment to /employees/.

We are a small company, he doesn’t bother him whether he actually owns it or not nor does it bother the business owner. It’s there to get him to work and back and it’s actually used for that, it’s an off road route. I’m not actually sure he’s used it for anything but work, pretty sure he hasn’t. His alternative with the arrival of a baby was to buy a second car so it really has taken one off the road. Company accountant looked into too and was happy with it.

Avdave2, sorry just to be clear I’m not saying your colleague (or company) is intentionally doing anything wrong and of course I definitely approve of commuting by bike 🙂

Sounds like your company paid GCI upfront and your colleague has already paid back your company from salary sacrifice. However (unless I’ve misunderstood, which is totally possible!), the bike belongs to GCI and will do so for 5 years from purchase in order to avoid the tax.

@twowheels, there is no practical limit on cycleschemes so long as the employer has a credit license and the hire charges do not drop the employee salary below min wage. However…

This scheme sounds ripe for challenge for a number of reasons but not least its handling of end of period. HMRC has a valuation table. Then there’s the need to legally not be a HP contract (a number of limitations but notably impossible to guarantee term beyond the year the company initially loans you the equipment, or defined end price). Legitimately, it exists to encourage cycle commuting. It also needs to be borne in mind the bike isn’t your property for several years so any parts you decide to swap have to be kept, and legally your ‘upgrades’ could be lost if the company ever feels the need to repossess the bike (possibly because you lost your job or moved to another job).

There are a number of advantages possible with c2w with the right employer, but there are a number of issues, and frankly discussing abusing the scheme on a public forum is beyond stupid.

twowheels, he’s aware of the ownership situation and the payback was just what suited him and the boss, the minimum wage part was made clear too. It does all seem to good to be true but so far no issues. I really only made the point about the fact that it is only used for commuting because I find it rather amusing given that everyone on here using the various schemes are buying bikes that will do a lot more than the ride to work. My own take on all of these schemes is that they should be scrapped, I find the idea that higher rate tax payers get a better deal and that it’s not open to everyone unacceptable. Instead simply remove VAT from bikes, that could be completely or say on the first £1500 which will buy anyone a very nice commuting bike.

Edit2: they state GCI is the only scheme without the £1k limit, which as above, is incorrect (I personally went above £1k with cyclescheme.co.uk)

They are correct in that no other scheme has a default limit above £1k (without your employer having a credit license)

Abusing? really?

I’m surrounded at work by self employed folk that avoid tax as much as they can, companies who do the same, all in a car obsessed world. But a cyclist on a cycling forum getting a wee break on a bike that they absolutely intend to use? what a **** liberty!!.

Jeez.

If memory serves correctly the limit for bicycles on any kind of cycle scheme is £2000, end of story.

Your memory is faulty. The HMRC guidelines provide a ‘group’ credit licence of £1000. If the employer wants to use their own credit licence then they can provide whatever limit they want. My own employer does this – I can get whatever bike I want as long my earnings don’t drop below NMW.

My own take on all of these schemes is that they should be scrapped, I find the idea that higher rate tax payers get a better deal and that it’s not open to everyone unacceptable.

Should we do the same with pension schemes and child-care vouchers? (Also salary sacrifice where a higher rate tax-payer gets more benefit than a lower rate.)

I’m surrounded at work by self employed folk that avoid tax as much as they can, companies who do the same, all in a car obsessed world. But a cyclist on a cycling forum getting a wee break on a bike that they absolutely intend to use? what a **** liberty!!.

Yep. Company owners who drive company vehicles as their personal cars, use company mobile phones as their own, write off all sorts of day to day things against the company and pay their employees as close to the minimum as possible. Let’s get rid of tax breaks for everyone..

@vincienup – agree about abuse and hope my posts elsewhere don’t suggest otherwise. For the avoidance of doubt my only c2w bike (Arkose for around £1.2k) was and still is primarily a commuter bike in near daily use. You seem to be correct about the limit, which is bonkers.

@nealglover – but that’s not what they write at all and I could see no mention that many employers (not just banks) will have a CCL. So it looks misleading/economical with the truth at least.

@avdave2 – agreed it benefits higher rate tax payers more, which doesn’t seem fair. I don’t see that as a massive issue though and would rather see the scheme tweaked with a more sensible limit and the final valuation system sorted out.

I’m certainly not talking about abusing anything, I was just asking if these guys are legit as they seem to be applying different rules to the rest of the cyclescheme providers. It is highly unlikely I will get my company to support anything other than halfords (this is setup, they have other priorities than a few cycling commuters)

When this was introduced the £1k limit bought you a nice mid range hard tail (I had a £999 charge duster / LX / rebas etc..). Bikes have got more expensive and the limit has stayed the same. Road bikes with discs under £1k are available, but not many and not with proper discs. Same with ebikes, which is probably where a significant amount of growth will be now they are becoming mainstream.

If it helps, I do commute on my £800 boardman TT bought via C2W. I also commute on my lovely carbon roadie with zipps etc… which was a lot more than the £1k limit (and not bought via c2w). If I’m buying a bike, which will be commuted on, and there is a potential legitimate tax break via a government scheme I’d like to take advantage of it!

If we really want to get more people to commute by bike then put in a system open to absolutely everyone, If higher rate taxpayers only get the same benefit as lower rate payers that just means the same budget can help more people. Let’s not lose sight of the fact that the most important thing here for the benefit of all is to remove cars from the road. Whatever the scheme that should be it’s absolute priority.

that just means the same budget can help more people

What budget?

btw I agree with changing the system to something better like removing VAT would be much fairer and benefit more equally But as none of us are actually able to do that it seems pointless debating it.

Re. higher rate tax payers saving more – the scheme can only return tax. Despite the government’s intentions when setting this scheme up, HMRC changed the rules so that VAT was no longer removed from the hire value, reducing the incentives of the C2W scheme especially for those that pay lower rates of tax.

Personally I ride to work all year, in all weathers. Between the bike itself (best described as solid rather than blingy) and accessories (mudguards, pannier rack, dynamo lighting of adequate power) I reckon I’d be comfortably over £1k. If I were to include items like studded tyres I use in winter and clothing/protective equipment, it would be in the region of £1500 plus.

I’m not complaining about this cost, it’s saved me far more over the course of time owing to my savings on public transport/fuel/parking/not having a second car when my ex was with me. But to suggest that £1k is a reasonable limit is very limited. Cheaper stuff than I run is available, but it would be a heavier (if that is possible) and more maintenance intensive bike if I ran that.

The C2W scheme is an incentive, it should be cost effective for folk, and I don’t see why a more expensive bike should be excluded, it’s still massively cheaper than a car, and the benefits outweigh the costs to the tax man (NHS savings etc). As it happens it’s another bike that I got on the C2W scheme which does get used for the commute more than anything else (I like road biking but I prefer MTB), but is only really suitable for fair weather.

Re. higher rate tax payers saving more – the scheme can only return tax. Despite the government’s intentions when setting this scheme up, HMRC changed the rules so that VAT was no longer removed from the hire value, reducing the incentives of the C2W scheme especially for those that pay lower rates of tax.

Personally I ride to work all year, in all weathers. Between the bike itself (best described as solid rather than blingy) and accessories (mudguards, pannier rack, dynamo lighting of adequate power) I reckon I’d be comfortably over £1k. If I were to include items like studded tyres I use in winter and clothing/protective equipment, it would be in the region of £1500 plus.

The scheme does sound a bit bogus, though – how many people are sitting at home thinking I’d love to ride a bike in to work, if only I could get some tax relief on a 3 grand bike? Perhaps some folk are with respect to e-bikes, so that’s legit I guess.

But the more expensive the bike, the less likely you are to commute on it to work ISTM. Day in day out commuting takes a workhorse machine like you say. Do you know anyone who rides into work on a 3, 4 grand bike? Probably the odd one on here who can stick it in their own office in a small company perhaps, but I think it must be v rare (Doubt there’s a bike over a grand in our bike shed, out of 100s, but that does include a lot of penniless PhD students.) No way would I come in on a smart road bike, if I owned one, as I’d need to lock it up in this sea of BSOs where it would likely get scratched to fk.

End of the day one should take a wide perspective on these schemes, IMHO – they’re a positive for cycling, even if you go out and get yourself an enduro bike. Not so sure it will impact real numbers of bike commuters but time will tell.

@Garry_lager – yes.. and at the opposite end I have a (higher rate tax paying) colleague who bought a 15kg £160 Argos bike to try biking to work.
That was even after I explained he could get a far better bike like a 10kg Pinnacle Neon using cyclescheme for about £75 more. This is a guy that understands running twowheeler workhorses (CBF600 commuter). I don’t think many non-cycling people are eying up £1k+ bikes for commuting at all, they just think such bikes are a joke and don’t mind buying disposables.

Another question about CGI (supposing it really is HMRC compliant, which I still doubt):

Usually if you move jobs before the salary sacrifice ends you either forfeit the bike or pay off the remainder from your salary post tax (and sort out tax on whatever residual for the tax free part you paid).

With GCI your employer doesn’t own the bike, GCI do. Does that mean they can simply “transfer” the bike to your new employer? If not, why not?

If yes that’s quite handy as it removes the “what if I need to change jobs?” consideration.

The other point is – if you can avoid the 7% “ownership” fee simply by having the loan period run to 5 years, then fee cyclescheme.co.uk et al charge is basically a scam, right?

What budget?

A scheme like this has to be costed and the loss to the treasury estimated. It’s brought in and it’s parameters are determined by that estimated loss. If you take off VAT you have to again estimate it’s uptake and you will have a budget for that loss and set the VAT free limit based on that. So not budget in the way you might think of it as an amount that you will definitely spend but an estimate of what it will cost with measures to try to prevent it exceeding that. Hope that makes clear what I meant `:-)

Do you know anyone who rides into work on a 3, 4 grand bike?

yes several. For rubbish winter / wet months I have a ‘work horse’ but its still a nice bike with nice reliable kit, like 105 etc.. which cost close to £1k. If I am going out before / after or lunch time and the weather is good I commute on the nice bike

If I look around our secure bike sheds there are several very nice bikes. It helps we have a very active cycling club.

The reason I actually came across these guys was I wanted to replace some worn components for my commuter but the halfords scheme only allowed very restrictive things like wheels and pedals – not chains, cassettes, brake pads etc.. Then I saw this, and thought if it was legit it would be brilliant

A scheme like this has to be costed and the loss to the treasury estimated. It’s brought in and it’s parameters are determined by that estimated loss. If you take off VAT you have to again estimate it’s uptake and you will have a budget for that loss and set the VAT free limit based on that. So not budget in the way you might think of it as an amount that you will definitely spend but an estimate of what it will cost with measures to try to prevent it exceeding that. Hope that makes clear what I meant `:-)

That’s what I hoped you meant!

The other point is – if you can avoid the 7% “ownership” fee simply by having the loan period run to 5 years, then fee cyclescheme.co.uk et al charge is basically a scam, right?

You don’t have to pay the fee, simply advise that you wish to extend the loan period and the charge becomes small/zero eventually.

I used them back in March, a friend of mine did too.

They’re pretty good, helpful and quick to respond.

A few of their claims need a caveat – firstly they’re not working for free. They make their money by offering the LBS 95% of the asking price, for most LBS type bikes that’s not a problem, there’s enough margin in their to cover things like 0% finance deals and lots of buyer will try for a discount anyway.

However if you want a direct sale bike (Bird, Intense, YT etc) then it gets tricky, Bird for example won’t accept 95% as their margins are tighter and they don’t offer 0% and stuff like that. It’s not a complaint but I ended up paying 106% of the cost of my Bird which obviously eats into the savings, still makes a lot of sense, especially given what good value Birds are, but it makes it more complex and you need to be involved in the process more.

Also, it seems they claim to be working with a least one LBS who when my mate ordered his didn’t know them, they do now and offer the scheme in their shop.

Also, if you’re part of a bigger firm, you’ll need to convince the boss / HR to deal with them, and they’ll either have to pay the full cost of the bike upfront (or 106% in my case) and get it back over whatever term you choose or pay them for finance – the finance cost however is lower than the savings through employers NI, they can give that to you, but it’s not something they push like some other schemes.

Ultimately I’ve very happy with them, the scheme and the bike, like so many things these days I’ve leased my bike for X years, when it’s done, I’ll sell it, pocket a bit of cash and get a new one.

My man Maths tells me that if I consider what it cost to buy, what I actually paid for it, and what it’s likely to be worth when I’m done with it, it’s going to have cost me about £10 a month after I sell it.

@philjunior – I just confirmed with my emails and for cyclescheme.co.uk that 7% was *required* as a “deposit” to continue using the bike for +3 years.

The only other options were return the bike or buy it. Their website still only gives these 3 options.

Possibly other schemes (or self administered schemes) allow you to extend for the full 5 years. If so I think it’s pretty greedy of cyclescheme.co.uk, as they already take ~10% of the voucher at the beginning.

Do you know anyone who rides into work on a 3, 4 grand bike?

Me!

Only a few days a month, I’d love to do more, but I can’t. I’ll usually be riding every day next week (it’s Half Term here) but I’m in Manchester Wed-Thus and it’s a bit of a pedal from Cardiff.

I’ll admit a 160mm ‘Enduro’ bike isn’t ideally suited to the Urban commute, but I’ve only got one bike.

I noticed Manon Carpenter commutes on a huge old steel roadie the other day.

Possibly other schemes (or self administered schemes) allow you to extend for the full 5 years.

Yes, Cycle Solutions and Halfords do this.

Do you know anyone who rides into work on a 3, 4 grand bike?

Yes as above my colleague who uses a £3500 bike exclusively to ride to work

Do you know anyone who rides into work on a 3, 4 grand bike?

I also know people who commute to work in thier porsches and silly expensive lux-barges.

@philjunior – I just confirmed with my emails and for cyclescheme.co.uk that 7% was *required* as a “deposit” to continue using the bike for +3 years.

I’m not sure what scheme we use, but I’ve done this twice (to be fair, the first bike’s frame did snap at around the point the value was next to nothing).

It is a bit of a swizz making you pay the amount at the end anyway, you should really just pay the tax on that amount, you have after all paid for the bike with your hire payments.