[Closed] Cycle to Work scheme: who's good?

https://greencommuteinitiative.uk/

They look good to me, several LBSs told me they were good for them and they have an adhoc sign up for employees so hopefully easy for small companies that don't want big commitment.

My employer has just moved to them after I asked them to move away from an Evans only scheme so hopefully they'll be as good as the claim to be. 🙂

According to a friend who works in the bike industry, Green Commute Initiative have more favourable terms for the bike shop.

Whether that's they take a smaller cut, pass through payments quicker or what I am not sure, but I am lobbying my workplace to move to GCI.

I've been looking into this quite a lot recently and (as above) GCI look best. The whole thing is bizarre though as all providers are just friction in the work adding on cost to employees. Much better to just give employees tax relief for bikes and get rid of these middle men. Anyway enough moaning.

GCI have an extended lease period beyond 4 (same as Evans) years so no "admin charge" of 7% CycleScheme charge

Do seem to charge shops a little less than the 10% CycleScheme charge so you should get hit with less of a surcharge that most shops charge on sale items. Haven't really seen this in reality though.

If it helps, I'd started to check with these shops if they took it and what charge they passed on to you:

Westbrooks Yes 10% on sale items
Pauls Yes 5% on sale items
Sigma Yes 10% on sale items
Evans Yes 0%
JE James Yes ??
Leisure Lakes Yes 10% on sale items
Rutland Yes 11% on sale items
Certini Yes ??
Merlin Yes 10% on all items

Start No
Sprockets No
Tredz No
Wiggle No
Spec Concept Store No

A big question is though if you have lots of employees who would go to Halfords as they don't seem to accept anything other than their own scheme.

Thanks chaps and will pass on the GCI link. Of course the biggest hurdle is that the whole world and his dog are currently riding bikes meaning lack of stock, added to which this will be very much a basic commuting bike.

You don't have to use a scheme, we don't. Company buys bike direct from shop, company rents bike to you and collects the monthly payments out of your payslip pre-tax. Feel free to DM for more details

nbt

Tricky thing is persuading them. I couldn't even convince mine to switch from CycleScheme to GCI.

Most companies have such low take up that the non-cyclists can't be bothered to look at it but I think it's partially to do with it being such bad value if you just use CycleScheme. Even as a higher rate tax payer, you're saving 42% tax and paying 17% over the odds for a bike. Add in that if you leave your job before the 12 months are up (voluntarily or probably not in the current environment) then you won't get all of that relief but still pay the 17%.

you don't need to use any scheme as above, expect if your company is not registered as a financial company (not sure on the wording here) they are limited to £1000. (something to do with the financial things with lending money).

Edit - If not FSA registered/authorised

£1000 limit was removed as above to encourage take-up of purchase for electric bikes

My work place is still using a scheme with £1,000 limit... it's really annoying as it basically allows you only to get a Halfords Carrera around the £900ish mark. If you go independent they add a 10% to 15% fee for dealing with Halfords and the scheme. It makes the whole process a pointless complicated exercise over 12 months where you may save around £200 max on a £950ish bike....

our company buys the bike, then claims the VAT back and charges us the net price. even with the old 1k limit, that effectively allowed us a £1200 bike

providers are just friction in the work adding on cost to employees.

And

Even as a higher rate tax payer, you’re saving 42% tax and paying 17% over the odds for a bike.

You don’t understand how the scheme works if you think that.

Read through it again.

Happy to be put right. Which bit do you not agree with?

paying 17% over the odds for a bike.

Where’s the 17% come from? Bike costs £1,000.

Voucher costs £1,000.

£1,000 deducted from gross salary over 12 months (or longer). Assuming deductions continue from gross, you pay back £1,000 less tax for a £1,000 bike.

Where’s the 17% cost?

Ok. Shops are charged around 10% by CycleScheme i.e. they give them £900 cash when the shops hand in a £1,000 voucher. No right minded retailer wants to get hit by that cost. Most do though on full RRP bikes as they're still making some money. On sale bikes they're less happy so often pass the £100 cost on to you so if you bought a £1,100 RRP bike that Jo Public could buy in the shop's sale for £1,000, the shop will take your £1,000 voucher but also want £100 cash.

In reality, it's actually often the same for full RRP bikes as all our local shops will knock off 10% for cash rather than a voucher so you're back to effectively paying more than if you walk in off the street with a bag of money.

Then, at the end of the lease period your employer sells the bike to you effectively as up to now they own it and have leased it to you. This sale will usually be for nothing. HMRC aren't happy though as you've been given something for nothing that they say is still worth roughly 7% of it's original value. Cyclescheme kindly offer you an extended lease period so that the bike is worth nothing at the end which is when you buy it off them for nothing. Less kindly they pocket the 7% you had to pay them as an "admin fee" when they extended your lease.

You're now 17% worse off than if you'd just gone into the shop with cash.

Roughly, the treasury are down £420, Cyclescheme are up £170, you're up £250. That's if you keep your job for 12 months.

Roughly, the treasury are down £420, Cyclescheme are up £170, you’re up £250. That’s if you keep your job for 12 months.

He's right you know - it's a stupidly inefficient way of giving members of the public a discount on bikes. VAT free, or a reduced VAT rate, for all bikes to everyone (or ideally imo - bikes in a recognised commuter category to reduce the piss takers - for tools but not for toys) would be a much more efficient and egalitarian method.

If you want to give tax relief then just give tax relief! Let people do it the same as other expenses like claiming for professional memberships.

As I said before, these are just middlemen adding cost.

Of course that is a separate debate about people buying £1k Zipp wheels for their commute......

londoncommuter
Member
Ok. Shops are charged around 10% by CycleScheme i.e. they give them £900 cash when the shops hand in a £1,000 voucher. No right minded retailer wants to get hit by that cost. Most do though on full RRP bikes as they’re still making some money. On sale bikes they’re less happy so often pass the £100 cost on to you so if you bought a £1,100 RRP bike that Jo Public could buy in the shop’s sale for £1,000, the shop will take your £1,000 voucher but also want £100 cash.

In reality, it’s actually often the same for full RRP bikes as all our local shops will knock off 10% for cash rather than a voucher so you’re back to effectively paying more than if you walk in off the street with a bag of money.

Then, at the end of the lease period your employer sells the bike to you effectively as up to now they own it and have leased it to you. This sale will usually be for nothing. HMRC aren’t happy though as you’ve been given something for nothing that they say is still worth roughly 7% of it’s original value. Cyclescheme kindly offer you an extended lease period so that the bike is worth nothing at the end which is when you buy it off them for nothing. Less kindly they pocket the 7% you had to pay them as an “admin fee” when they extended your lease.

You’re now 17% worse off than if you’d just gone into the shop with cash.

Roughly, the treasury are down £420, Cyclescheme are up £170, you’re up £250. That’s if you keep your job for 12 months.

Don't know what shops you use but never had the scenario you describe happen to me despite having bought 4 bikes through Cyclescheme over the last 8 years and one currently on order, not once has any shop added any cost to me over and above what the bikes advertised cost is, including one sale bike and on one occasion they even knocked 10% off the RRP on a new season bike.

Currently waiting for a VanMoof, and only thing they did was to only take the voucher for the bike, anything else needs to be bought separately.

Evans are good , I got a 2019 trek slash discounted to £1890 and they asked the wife to put it on her c2w. So basically got it for around £1300 for a £2700 bike. They were really understanding hwen the certificate took 5 weeks to come as well.

londoncommuter

That’s very glass half empty. If you take a scheme offered by the retailer directly then there is no loss.

I’ve had three bikes over the years and never once paid an admin fee. Never once paid a supplement. Never once paid a final fee either.

What’s more, the first one I took out (through Halfords) got me a 20% off offer on the day I went to redeem the voucher. So the bike that regualrly retailed for £1,000 was only £800 and I used the spare £200 to buy accessories tax free.

On that basis alone, I’d recommend Halfords. They can also use Wheelies now to source pretty much any bike (albeit at RRP).

There’s no magic money tree. If a third party introduces a sale to a retailer, then it’s not unreasonable that there’s a commission. You can choose not to pay it.

Look at the list I posted earlier. Those online shops charge a surcharge e.g. Merlin 10%.

Your big chains like Evans don't on the face of it as the price is the price so to speak. Having said that, they do a bit as if you use their own Ride2Work scheme (i.e. they don't have to pay CycleScheme their cut) they throw in some free parts and a RideIt entry. Looks to be just £30 now but used to be £100.

So in answer to the OP, Halfords good. GCI better. Cycle Scheme less good in some circumstances (like you insist on selecting a bike from certain retailers and / or below RRP).

Hee hee, we did stray a bit there but yes, I reckon if you've loads of employees who might actually want to start commuting on cheapish bikes and you have loads of different locations then Halfords probably wins.

For fewer employees, happier to shop online and spend a bit more then GCI looks great.

Not sure what you'd advise for people who need £3k full suspension trail bikes to get to work:

https://singletrackworld.com/forum/topic/new-bike-fs-trail-cycle2work-2000max/

londoncommuter

You had me ferreting around the Cycle scheme website and I found the following page where it highlights those retailers that have agreed to fulfill sale prices.

In your experience, is this BS / out of date?

If not, I reckon there are some ok brands on there. And if they allow >£1k orders, there's probably some good stuff to be had... Albeit subject to CS admin fees.

Can I get a sale bike on the Cycle Scheme?

I didn't look into those above but obviously it's a bit out of date in terms of Cycle Surgery and Cycle Republic both closing! Tredz are part of Halfords and Wiggle/CRC are one so there aren't many there. Surprised at Ribble.