Cycle to Work Scheme (again) Worth doing?

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  • Cycle to Work Scheme (again) Worth doing?
  • cyclistm
    Member

    I reckon your better off with an end of year bargain! Depends if you have the cash available or not.

    Premier Icon MoreCashThanDash
    Subscriber

    After the final lump sum payment I will save about 25%. I haven’t dared check if Evans have reduced my bike by that much in a sale, but I’ve had a great 6 months out of it so far

    mindmap3
    Member

    It worked out as quite a good way for me to buy a road bike because I didn’t want a proper loan, it limited me to spending up to a grand and it was easier to get past the other half.

    I’ll still save money on the bike if I hang onto it for the extra two years paying £1. I’m not a die hard roadie and the bike is just something I ride so I think I’ll be happy hanging onto it and replacing stuff as it breaks.

    gonefishin
    Member

    Had I taken it up it would have been great for me as the company I worked for had did the scheme over three years (only one year of repayments though) so the end value was effectively zero. Higher rate tax payers do of course benfit more.

    Premier Icon tomaso
    Subscriber

    I negotiated a 50/50 split between rrp and the discounted price. So £100 less than rrp but £100 more than cash.

    Double check your deal on the bike you want as it isn’t cut and dry how different bike shops work the scheme or discounts.

    Dibbs
    Member

    Had I taken it up it would have been great for me as the company I worked for had did the scheme over three years (only one year of repayments though) so the end value was effectively zero.

    The Inland Revenue value for a 3 year old bike up to £1000 is 12% not zero, you are liable to the tax on that 12% (£48 in my case).

    Premier Icon kayak23
    Subscriber

    My employer has finally decided to introduce this scheme. We’re a big College so it’s surprising it’s taken so long, but anyway, introduced it they have.

    Do people still think it’s worth doing, over say, an interest-free loan for instance?

    My employer puts this small print at the end of the info too. Anyone know what we’re talking about in terms of say £1000 bike?

    If the College did decide to offer to transfer the ownership to you at the end of the loan period and you decided to accept, you would be liable for NI Contributions on the bike’s ‘fair market value’

    Premier Icon Scapegoat
    Subscriber

    My employer gives us the bike at the end of the 12 month period as a gift. I bought a £1000 bike, (a model which was sold out pre-order by the way, so would never have been discounted) and over the 12 months paid about £82 a month pre-tax, £48 post tax. Total so far £576.
    HMRC consider the residual value of the 12 month old bike to be 25%, or £250. As I was given the bike as a gift HMRC make me pay tax on that value, £250 x 40%= £100. I am taxed PAYE, so my tax code was adjusted to pay off that £100 over 12 months.

    The total cost of my £1000 bike was therefore £676. Even if I could have found a bike discounted by 32% I very much doubt I would have been able to get interest free credit on it.

    SO, it you want a popular bike and want easy monthly payments, then go for it. Don’t forget added benefits that some schemes include a good percentage of the bike’s value in equipment vouchers etc.

    ALso, don’t forget that if you are in the Halfords scheme you are not forced to buy a Halfords bike. I have just ordered a 2014 Cube Peloton Race from my LBS.

    pdw
    Member

    Depends entirely on the details of the scheme.

    Some schemes use middleman providers like Cyclescheme which take a cut from the bike shop, meaning you’re tied to particular shops, and the shops are unlikely to allow discounted bikes. Others buy the bike directly, meaning you can get whatever deal you can find.

    Similarly, there’s lots of different ways to deal with the transfer at the end of the rental period.

    Premier Icon bails
    Subscriber

    If the College did decide to offer to transfer the ownership to you at the end of the loan period and you decided to accept, you would be liable for NI Contributions on the bike’s ‘fair market value

    This makes it sound like the college are willing to ‘pay’ the bike to you, so you’d be eligible to pay tax/NI on a benefit in kind, but you wouldn’t have to buy the bike off them so you’re unlikely to be stung for a £250 final value fee or anything like that, which makes it better value.

    Premier Icon kayak23
    Subscriber

    ALso, don’t forget that if you are in the Halfords scheme you are not forced to buy a Halfords bike.

    Yes, it is the Halfords scheme as far as I can tell. Good to know that as I wasn’t really after an Apollo BSO…

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