Can anyone give me an idea of the final cost/charge under Cyclescheme (for a £750 bike)?

The only thing I can get out of work is “as little as possible”.

It depends on how your scheme operates. The best scheme will extend the ‘hire’ period once your initial payment period has ended, the bike is transferred from employer to scheme provider and the hire period is extended from 3 to 5 years depending on initial cost of the bike. At the end of this period the bike has zero value so can be passed to the employee at no cost.

If your scheme is a ‘hand back or buy’ at the end of the initial payment period then I think the payment is 20% of value.

The scheme and work aren’t being deliberately awkward, they can’t give you that number for legal reasons.

I was on “cyclescheme”. The way that works is that they divide the total sticker price (your £750) by twelve and charge you that every month **BEFORE TAX** which means that there’s less taxable pay, so the amount of repayment is lower than the £750 they divvid up.

Where it gets interesting is after the 12th month. The worst thing you can do here is either give it back (!!!) or pay the ballon final payment which is calculated using HMRC provided valuation and will be insane. The scheme I was on allows a 13th extra month to be paid, and then they leave the bike with you – and at month 36 come back and apply an HMRC provided valuation of a now three year old bike and possibly give you a few pennies back out of the month 13 payment as a result at which point the bikle is finally legally yours – at all points up to this it belongs to the scheme but is in your keeping.

The total cost of my £1000 bike ended up being around £650-700 so there is a worthwhile saving but not as much as there used to be, it’s more complicated than it used to be, and your tax code makes a big difference.

HTH!

At the end of the hire period, our company ‘gives’ us the bike as a benefit in kind, so we only pay the tax on its value – so if it was valued at £200, you’d only pay the tax on it…

Thanks chaps.

vincienup – that sounds like a more detailed version of the ‘explanation’ we’ve been given.