Cycle to Work and a Company Car

Hi this might sound stupid but i work as a territory sales manager and a company car is a tool for my job, i have no choice but to have the car as i travel around all day.

Now the question i have is would i be able to do the cycle to work scheme as myself and others at the company believe that exercise is vital to any workforce and driving around all day and eating at the wheel seriously hampers our fitness levels. Cycle to work would be a excellent way to get fit and save money in the process.

Do you have to stipulate to the government that the bike would be used only for work or am i just ineligable for the scheme?

From CycleScheme…

Employees should use the bike mainly for commuting to and, if relevant, between work places (at least 50% of the bike’s use should be for work purposes). However, the bike can also be used for non-work purposes and there is no need for employers to monitor individual usage or for employees to keep a mileage log. Please note that employees can not claim business mileage allowance with a bike obtained under the scheme as the bike belongs to the employer.

Not sure how rigidly the above is enforced. Guess its down to the employer. Guess you could park overnight & commute in to get your car, if that was practical.

Depends on your employer. You would be sticking rigidly to the rules if you got the bike rode it to work once (or even just part way to work), then stuck it in the garage for 12 months…

Do you have to drive to work? Could you leave the car at work and ride in and back?

well see as silly as that sounds the parking for my building is a fair walk. im not sure they have to state usage so i can't see it making any difference. guess it depends if my company will allow the scheme or not. there is a massive push about being healthy and fit and i just can't afford a bike without this scheme.

mike im home based you see. we drive from home to 6 different locations and then back home. I just think its a scheme everyone should benefit from. What annoys me is my friend has done it and he lives next door to his office.

Can't see why you couldn't get use out of the scheme, unless your company are very petty.

Go for it, the health benefits are good for them as well as you

I can see how you think it is a scheme that everyone should benefit from.

BUT

it is a scheme to supply employees with a reliable way of getting to and from work. Not just a way to get a nice bike.

If you are not going to use the bike to get to and from work, why should you benefit from the tax benfits? If you claim a fuel allowance, or have a company car, you are getting benefits in another way, yes?

HMRC guidance recently out says that the scheme must be made available to all employees, regardless of whether they have company cars or not. techinically, cycling 10 yards from your car to the office door qualifies as a commute by bike.

you'll be fine. get the bike.

I've said it before – it's a crap scheme. Abused by most in it's literal function it mostly seems to be used to fund the puchase of bikes for weekend warriors out of our collective pot. No issue with that if it was fairly distributed – why should those most able to afford a new bike get the most help? Deduction or deuction of vat off bikes would cost little more to tax payer, be less admin heavy and most importantly be available to all regardless of working status.

out of our collective pot

What the hell are you talking about? It's not subsidised by taxes you know, it doesn't cost the tax payer a frickin thing. In actual fact, the people who can most afford to buy a new bike are the very ones who are propping up the rest of the workshy country.

Convert, you are wrong. Ime vast majority of ctw is used for commuting. Mainly by professionals who pay plenty tax anyway. We would all like to see vat cut on bikes, but this is what we've got right now.

off the bed before I see anotherctw threadandstart typing!

People getting bikes on C2W neither pay VAT on the purchase itself, or tax/NI on the payments made. So every £1000 bike bought on C2W rather than via traditional purchase is effectively £400 or so of taxes lost to the govt.

I do agree, VAT off cycles (at least, off cycles under £700 or so) would be a much better idea.

with mine I think a DH frame would be good 🙂

I'm looking to fund an Xtracycle kit so I can commute by bike & drop my boys at nursery. (A commute currently done by car due to them now attending different nuseries/school). Have commuted with trailer for year or two till eldest went to school. Commute now goes through some busy roads & Xtracycle with 2 child seats will be ideal

This is the literal meaning: 50% for work purposes doesn't mean you have to go to work on it 50% of the time, if you use it 2 times a year its OK, as long as once its for work.

I use mine to commute, and I used to have a company car at the same time.

I know its a very unbalanced scheme, and so is the child care voucher scheme, but I don't loose any sleep about the 57.5% tax relief I received on my Condor :-))

Simon sussed it and underhill's grasp of state funding is worryingly primitive! Workshy – is that what you really think? Why should those of us who are high rate tax payers effectively get a bike cheaper than our colleagues working for the same company on minimum wage?

I do admit that because of the circles I mix in being mainly sporting types I probably have a warped sense of the preportion of scheme users who "abuse" it but still think it makes up a sizable chunk.

And if you are on minimum wage, you can't get C2W as the salary sacrifice would take you under minimum.

That's an interesting point Rev
If that is indeed the case it really should be looked at

Sorry, me again. Just to add to Simon's explanation above – every £1k spent on a bike through the c2w scheme instead of no purchase at all is a big chunk of cash not past on to the state in lost NI (employer & employee contributions) and income tax. It dosn't have to be compared to a normal bike purchase for the loss to the state to be felt.

If it genuinely is meant for the purchase of wheels to use as transport to work the OP has morally no right to use it. If however it is about us all having cheaper access it a healthy life, then imo it is morally unfair for a scheme to be state funded that discriminates between members of the population.

For what it's worth. I have a company car and also have a bike from c2w. As far as I can see it's completely at the discretion of the employer. Mine's up soon and I shall probably be getting another (maybe a frame ;-))

I work from home and am on my second one. I use it for going to the station for onward travel to meetings (amongst other things).

And not everyone saves the vat – the majority of public sector workers don't.

I do admit that because of the circles I mix in being mainly sporting types I probably have a warped sense of the preportion of scheme users who "abuse" it but still think it makes up a sizable chunk.

From working in a bike shop I would say there are 3 categories of C2W buyer:

1: people who wouldn't buy a bike normally and are just doing so because it's cheaper and will use it for commuting, in theory at least;

2: people who would be buying a bike anyway, for commuting, but buy a more expensive one;

3: people who see it as a chance to get 'another one for the stable' and have no intention to commute on it

I would say the vast majority of people fall into 1 or 2, but most folk on here who talk about it are in number 3, not surprisingly! The 'occasional cyclists' aren't likely to frequent a cycling forum…

at least 50% of the bike’s use should be for work purposes

Surely using the bike to keep fit, is a benefit to the employer and can can be classed as work related. 🙂

[quoteI don't loose any sleep about the 57.5% tax relief I received on my Condor :-))[/quote]

How did you manage 57.5% on your bike? mine only worked out at 37.25% ❓

40% + VAT?

I'm a homeworker and I use the benefit…I have nice run in the morning, 45 minute ride at lunch or hit the dirt jumps then a ride on the bike to pick up the wee man from nusery at 5 🙂

How did you manage to get the VAT off? I don't think I did.
And although you may be paying 40% tax it doesn't work out at 40% discount.

bike must be used at least 50% plus of the time for commuting or work purposes (like biking to site, meetings etc)

so as above if you ride it twice a year – one of those trips should be to work.

thet other percentage yuou can use to go to shops, leisure etc

as for savings, the more you earn, the more you save.

also as a note you can get tax relief per mile if you use your own bike for work purposes, but you can not claim this if you are using a bike from a c2w scheme

Every time I read these threads I feel stiched up. I think I saved less than £200 in total on my C2W bike. I could have probably got a better discount by buying in the closeouts. How do people get the fabled 50% off I keep seeing banded about???

And yes I can't see the scheme carrying on much longer given abuse. Anyone remember the Home Computing Scheme?

Most companies can reclaim the VAT – 17.5%

The remaining cost of the bike is then deducted from your Gross salary. This means that you are paying for the bike out of untaxed income, which saves you the extra.

If you are a 40% tax payer this is a big saving. If you are in the lower bands you might only save another 10-20%.

I've just used the Calculator on the Cyclescheme site http://www.cyclescheme.co.uk/employee,calculator.htm?latitude=0&longitude=0, and come up with a saving of 41%, the same calculator through our works intranet comes up with a figure of 37.25%.
And as for

as for savings, the more you earn, the more you save.

I tried £65k and £100K and there was no difference ❓

Dibbs that is because both cases are maximum rate tax payers. There is another band at £150k or something, give that a whirl.

The VAT thing/discount is dependent on your company's VAT status and if they want to pass the benefit on. They don't have to. Still – at the end of the rental period the company are supposed to sell you the bike at an appropriate value. At their discretion. The guideline is 10% of "market value". But it will probably never be policed.

As for health benefits for a worker who needs a company car for the job. Why do you need a bike to take exercise? Could you not go for a 30 minute walk at lunchtime? I did on one of my jobs when I couldn't ride in working week. Be honest you just want to use C2W to fund a new bike.

I haven't really got much against bikies adding to their collection but like just about everything that any Government try to do the original intent ends up "perverted". Surely the idea was to get more people on to bikes and out of cars? Not to increase cycle sales and add to the stables of a lot of dedicated cyclists. I'm playing devil's advocate here. My last job offered C2W and I was planning my Boardman Hybrid. TBF it would have been used to commute as I travelled to work by Bike & Train. But at the same time it would have added to my stable and been used as well for touring work.

Good point above about minimum wage workers not being able to afford the C2W scheme and yet surely a lot of these are the sort of people who the scheme should really be aimed at. Generally if you're earning £6/hr or whatever you probably live quite close to the workplace, cos who can afford to spend much on transport at that wage? Maybe the Gov should approach someone like Madison and try to get some sort of "Government" bike made. This could be issued to workers earning below £12K/£15K whatever as a loan on the understanding that it was to be used for commuting. 12 monthly return for inspection and upkeep/wear and tear at the holders cost. It would be untrendy with something like Nexus/Alfine gearing and maybe belt drive. Return to employer at end of employment. Some sort of insurance scheme through the government at cost to user again, £2/week ish to cover loss for stolen/accident etc. User liable for cost if not locked/stored etc responsibly.

Just an idea.

I'm with the 'disagree-rs' on this one, its a crap scheme subsidising people who have no need to be subsidised. Plus I'd hate to think of the central and local government admin costs been swallowed up just to run it across the public 'sector'.

And as pointed out, its the minimum wage crowd who are paying so 40% taxpayers can have a shiny bike every couple of years.

But then, I just put mine through the company books, as a non-performing depreciating asset – so that makes me a hypo…

Every time I read these threads I feel stiched up. I think I saved less than £200 in total on my C2W bike. I could have probably got a better discount by buying in the closeouts. How do people get the fabled 50% off I keep seeing banded about???

it depends on your tax band.

I saved 41%, but that excludes the 10% fee i have to pay at the end.

so on the £870 voucher cost to me £513 + £87 end fee – (our end fee is being policed as customs are going to start chaing those companies that pass on goods for a £5 / £1 and then tax th employer as recieving benefits in kind)

so actual cost in total £600 so 30% or so saving etc.

also there is now VAT saving on some items like helmets, so if you eneter your quote into a scheme provider as seperate items the vat saving can be lower.

Maybe the Gov should approach someone like Madison and try to get some sort of "Government" bike made.

better to have a bike scheme like Paris Velib (really great scheme)? hope londons works out as well..

if with bikes is that as has been pointed out cycling is middle class, the wealthier you are, the more you are likely to cycle as you can get over the perception that you are poor as you have to cycle..

Shandy

Even if I put £200k its still the same. (41%)

Dibbs,

if go to

http://www.cyclescheme.co.uk/

put in £100,000 as salary, comes out as 49.8%

Its nice to see an example of regressive taxation in modern Britain.