As I’ve been branded the office cycling ‘expert’, I’m getting lobbied to ask the company to set up a C2W scheme. Easiest option seems to be one of the administered schemes, and I notice that my mates LBS is registered with Cyclescheme.co.uk 😀

Any reason not to push this one? Seems to have a reasonable choice of retailers, plus Wiggle and Evans.

Any reason not to push this one?

From a shop’s point of view they’re dead easy to work with and I think easy for employers too.

Having read the small print, it appears the employer buys the bikes, ie has to finance the scheme. Is this always the case?

I guess they can buy finance, but that would obviously add cost.

40mpg – Member
Having read the small print, it appears the employer buys the bikes, ie has to finance the scheme. Is this always the case?

I guess they can buy finance, but that would obviously add cost.

Yep – some employers will offer cycle to work through a third party leasing company, seen one where the cost associated with that equates to about 6% of the value of the bike.

HMRC use Cycle scheme. Worked for me. I was careful not to try and bend any rules though.

Cycle to Work Schemes – are they all the same?

No!!

Ok that’s oversimplified let me explain a little more, ‘the cycle to work Scheme’ is in reference to the tax break awarded by the HMRC

Company’s or administrators then set up ‘schemes’ based on this such at ‘Cyclescheme’ ‘bike to work scheme’ ‘[insert your own play on words]’ it’s an important to understand the difference.

Ok so as the company appointed cycling expert you have 3 options for applying the HMRC tax break (cycle to work scheme) You can use an administrator, do it yourself or a hybrid.

Before I cover each option I’ll just explain the common method of applying the cycle to work scheme, the scheme
allows employes to use a bike provided by the company (at no charge, no BIK) and if the company wishes to recover its cost then it can set up an agreement with the employee to recover from the gross salary (that’s your tax break), this is called salary sacrifice and is a whole different HMRC scheme. So as you can see these schemes provided by the administrators are a combination of HMRC schemes and a set of T&C that allow your company to take advantage of the HMRC cycle to work scheme.

Ok that’s a pretty breif explanation but should give you the jist

Right so option 1 is use an administrator, the advantage here is that they will take away the admin burden and should ensure you are on the right side of the tax law, most schemes opperate in a very similer ways but may have subtle differences such as the value they allow employees to apply for, shops they allow, charges at the end of agreement.
The disadvantage is that these companies are not doing it for free (although they say they are) the cost is usually charged to the cycle shop I’ve heard figures of 10-20% of RRP (any bike shop peeps wish to share charges?)

So you will find that on most administered schemes you can only buy a bike at RRP value, no sale items, no discounts (and we all know bike shops love to give discounts)

Whilst this is fine for most it’s not always the best option if your looking for a bargain or have a particular brand in mind.

So your next option is run the scheme yourself, it requires a little reading and understanding of the HMRC schemes, then set up your own T&C and agreement forms, you can always have your T&C checked by a solicitor.
The advantage here is that as far as any bike shop is concerned the deal is a cash buyer and you can shop anywhere the company allows and buy sale items or negotiate a deal.

The 3rd option is a hybrid, this is where you effectively buy the paperwork and marketing material and run the scheme yourself, this offers the same advantages as doing it yourself but reduced the admin burden.

Hope that helps

I did it in 2011.

To quote myself from back in the day…

I set up one at my last place. Quite easy to do if you have finance and purchasing dept on side. It’ll take you a couple of hours to get the paperwork templates done (rip off the Evans one) and the Consumer Credit Licence can be downloaded for free.

Big saving to be had if you could sort out a deal with your LBS. We did and got 10% off on all purcahses.

Calculator is on HMRC website. Guidelines on final settlement price based on 12 month loan period were 18% of rrp for bikes below £500 and 25% above. No settlement fee on helmets, lights and other other bits and bobs other than the bike.

spot on Harry, just a couple of points, the consumer credit lic no longer exists (though I thing you mean the hire agreement) which means as long as you meet the FCA conditions you can set your own limit , the old £1000 Group consumer credit licence limit is gone.

Also final settlement fee can be worked around by providing extended hire agreements at a nominal cost £1 per annum up to the 5 years at which point the final vaule fee is also nominal.