Cyclescheme having a laff

Viewing 40 posts - 1 through 40 (of 72 total)
  • Cyclescheme having a laff
  • Bought a new shiny Genesis last year on cyclescheme. Upgraded a few bits at point of purchase which brought the cost to £1000. Not the worlds best bike, but like a Mondeo, does what it says on the tin.
    So now the payments are up next month I get a mail telling me:
    1) I can pay 3% OR 7% of original cost and keep the bike for another 3 years (they dont tell you which % they want you to stump up).
    2) At the end of the three years I can keep or hand back the bike
    3)I can hand the bike back next month and start a new scheme
    4)I can pay a “much larger” fee at the end of next month and the bike is mine
    5)I can also start a new cyclescheme with another bike ASAP

    Now! – why would I hand the bike back (its like new). Tell me is it 3% or 7%, make your mind up. And what is this crap about continuing for three years with the “agreement” when you are only treating it as a paper exercise.
    I could have bought last years model from Evans (or similar) on 0% and that would have been it after a year. Cyclescheme needs to just finish it after the year is up. A lot of our staff wouldn’t take the scheme up because it looked (and is apparently) so confusing.And now I can see why.
    Certainly wont bother with it again when bike shops offer exactly the same deals without all the crap.

    birney29
    Member

    It’s only confusing if you are either Hard of Understanding or too lazy to read the terms and conditions.

    at 1k, you pay 7% of the value. Your agreement continues for 3 years at a cost of £0 per month for tax reasons. You are free from the moment you pay the 7% to get a new cyclescheme bike.

    Premier Icon matt_outandabout
    Subscriber

    Buyer beware – I would have read the small print.

    TiRed
    Member

    It is not a paper exercise. You do not own the bike. The Inland Revenue cottoned onto the idea that three year old Bromptons are worth a lot more than a nominal 3% of the purchase price. So the scheme was changed to reflect the fact that at the end of three years, there is still a benefit in kind (depending on the value of the voucher). And you have to pay for the bike or give it back. Even with 40% tax relief, it’s not the bargain it once was.

    Rorschach
    Member

    It’s called terms and conditions.When entering a financial contract it’s is best practise to read them before you sign legally binding agreements 🙄

    I am pretty sure I can read, and am fairly adept at reading “complicated” instructions. I think you missed my point entirely though.

    Which was this – Buy your bike over one year at £xxx, then its yours.

    Novel idea I know, but if you trot along to your local LBS, their 0% deals do the same thing for diddly hassle and without a long winded explanation on “terms”

    Premier Icon wwaswas
    Subscriber

    if you trot along to your local LBS, their 0% deals do the same thing

    bar any tax and vat benefits buying through the scheme might give.

    st
    Member

    It’s a straightforward case of a lesson learnt then isn’t it?

    Buy your next bike through a 0% finance offer and leave the C2W scheme alone?

    I’m going through the end of year 1 arrangements with my bike and was fully aware of how it was going to end and am happy to treat it that way.

    With C2W you’re in effect leasing a bike that you then have the option to purchase. I wouldn’t expect to new car I had 2 years ago to be given to me FOC in another 2 years time when the finance agreement is up so likewise with my bike.

    Premier Icon julians
    Subscriber

    Novel idea I know, but if you trot along to your local LBS, their 0% deals do the same thing for diddly hassle and without a long winded explanation on “terms”

    But you pay income tax on the cost of the bike if you just ‘buy’ it from a shop. The whole point of cycle scheme is that you dont pay income tax on the money that was used to pay for the bike, ie it works out cheaper than just buying the bike from a shop in the usual way.

    I think you’re missing the point of the cyclescheme.

    geetee1972
    Member

    I tried to buy a bike on the C2W scheme but failed to find anything I would remotely want for £1000. I really tried, but just couldn’t bring myself to do it.

    How do the rest of you do it? The minimum I could bring myself to spend on a commuter bike is £1500.

    Premier Icon convert
    Subscriber

    Try this

    It makes it all pretty clear. You will be a 7%er as you spent over £500. Just a shame you managed to get to the end of the first year before cottoning on to what you got involved in!

    Gee – 😯 . It’s a commute bike, supported by the government by giving you a tax break – to promote people out of their cars – it should not be for buying a pimpy bits of bling. If that’s your thing you just have to pay the tax and that seems totally reasonable to me. Plenty of sub £1K bikes will get you to and from work reliably for years to come.

    The aspect that really hacks me off with the C2W scheme is that the people that make the biggest saving are the people who least need the financial incentive. IMO only high rate tax payers make a worthwhile gain using the scheme now.

    IanW
    Member

    The end of contract terms do seem a bit sharp and reduce the saving but are clear and there for all to see.

    philfive
    Member

    Just pay the 7% you have still saved on it all.

    Premier Icon cynic-al
    Subscriber

    sangobegger – Member

    Buy your bike over one year at £xxx, then its yours.

    I don’t think it’s marketed as such though, is it?

    Premier Icon jamiep
    Subscriber

    Last week received a bulletin at work for the scheme – pay a flat fee of £250 at the end of your 12m lease and the bike is yours.

    7% instead sounds like a pretty good deal to me. Stop your greetin’

    Premier Icon sv
    Subscriber

    So just to confirm on a £1000 bike – after the 1st year (£80odd pm) I pay a 7% ‘deposit’ and enter into a 3 year deal (£0pm). Once that period is over they keep hold of the £70 and I keep the bike without any further £££ changing hands? If so seems like an ok deal, not quite what it once was but…

    dragon
    Member

    The minimum I could bring myself to spend on a commuter bike is £1500.

    WTF? Seriously? For something to cycle to work on £700-800 should get you something pretty decent. It’s not like you’d want to run Dura-Ace / XTR on a bike getting regularly covered in salt, muck and water.

    Premier Icon julians
    Subscriber

    So just to confirm on a £1000 bike – after the 1st year (£80odd pm) I pay a 7% ‘deposit’ and enter into a 3 year deal (£0pm). Once that period is over they keep hold of the £70 and I keep the bike without any further £££ changing hands? If so seems like an ok deal, not quite what it once was but…

    yes, and the £80odd pm is before tax, so saving you either 40% (£400) or 20% (£200) income tax on the £1000, depending on whether you are a higher rate or basic rate tax payer.

    IHN
    Member

    geetee1972 – Member
    I tried to buy a bike on the C2W scheme but failed to find anything I would remotely want for £1000. I really tried, but just couldn’t bring myself to do it.

    How do the rest of you do it? The minimum I could bring myself to spend on a commuter bike is £1500.

    I know you’re not as big a knob as this makes you sound, but I bet others don’t. They’ll have to take my word for it.

    Premier Icon wwaswas
    Subscriber

    I know you’re not as big a knob as this makes you sound, but I bet others don’t. They’ll have to take my word for it.

    It’s ok, I assumed there was a missing 😉 at the end and he was taking the pee out of stw attitudes to non-expensive bikes 🙂

    jamiea
    Member

    I was lucky with my Cyclescheme bike (before the changes)- I got made redundant 1/2 way through the year and the firm didn’t ask for anything 8)

    Cheers,
    Jamie

    c2w sucks. The retailer looses 10% of the sale to the scheme, which they often cant afford, especially considering how time consuming c2w sales tend to be. It’s a very cynical business model, as most businesses don’t realise that they can administer their own schemes.. The c2w scheme maintains an air of officiality even though it’s only a private company. They can suck my balls. I’m glad I don’t have to work with them anymore! Contrast this to something like the Bristol Uni scheme.. They would send us a cheque covering £800 of the bike’s value, with the customer free to top up what they wanted.

    Your LBS will like you far more if you go out and get yourself a new credit card with 0% on purchases. They’ll be able to do you a deal, or sell an already discounted bike. You’ll probably get a better discount overall, no ties to your place of work, and 18 months to pay for it.

    Premier Icon jamiep
    Subscriber

    bikewhisperer
    c2w sucks. The retailer looses 10% of the sale to the scheme,

    Not if you are P-X, who helpfully pass it on directly to the ‘customer’ at the point of the ‘hire’

    Premier Icon riddoch
    Subscriber

    The best way to look at it is a interest free loan for a period that doesn’t require any credit checks.
    The saving is fairly minimal compared to what it was when the scheme first started.

    I saved money using it over walking in and buying it. Only half way through at the mo.

    If you don’t like it don’t use it, simples. I hope its still about for my next bike.

    TiRed
    Member

    Our C2W scheme has a limit of £3000. I think the company has to be able to offer a Consumer Credit Agreement for the higher limit. I bought a nice bike, but still couldn’t stretch to Dura Ace, even after topping it up!

    And yes I do ride it to work (on sunny days and when there is a club ride or race after work 😉 )

    Premier Icon wwaswas
    Subscriber

    The retailer looses 10% of the sale to the scheme

    and

    They’ll be able to do you a deal

    seem to be a bit at odds with each other.

    If I get 10% off for buying direct isn’t that the same loss to the LBS as the retailer giving 10% to the ctw provider?

    Our C2W scheme has a limit of £3000. I think the company has to be able to offer a Consumer Credit Agreement for the higher limit.

    They’ll have a consumer credit licence to be able to do that. Then the £3000 is at their discretion.

    wwaswas.. A common offer in a place I used to work was offering 10% of the value of the bike in free accessories.. Effectively a 10% discount to the customer, but only costing 5%. Either way, there’s no reason to give the cyclescheme 10% if you can avoid it. They do nothing to help retailers directly, except I’m sure that big entities such as Evans can negotiate a discount. It all gets ploughed back into pushing the scheme to more businesses, and nothing to promote the retailers that support them.

    I was going to enter into this years scheme but it just doesn’t appeal. Yes, it seems overly complex vs the old ‘pay no tax on it and buy it at the end of the year for a nominal fee’ type thing but it also doesn’t seem to make much financial sense when I was doing the sums unless I wanted to keep the bike for 4 years (which would be a rare thing for me).

    Makes a lot more sense to just buy something in the sales or get something second hand.

    I figured that out in 10 minutes of reading the blurb. Maybe the OP should have done the same a year ago…

    They do nothing to help retailers directly, except I’m sure that big entities such as Evans can negotiate a discount. It all gets ploughed back into pushing the scheme to more businesses, and nothing to promote the retailers that support them.

    I worked in a few LBS and Evans during the first few years of the scheme.

    The introduction of the scheme increased sales of bikes. Maybe not a great to the enthusiasts but certainly to the masses. I can’t see many retailers wanting to ditch the scheme unless they are wanting to move into another market.

    I’ve also checked my agreement:

    Under 4.0 Salary Sacrifice and Hire Period

    “At the end of the hire period, the owner of the equipment will contact you to disscuss what is to happen next.”

    Isn’t this the employer? I just asked my boss if I had to pay anything at the end of the scheme and got a “Nope”.

    Im really thick i still don’t get it. Though i am very interested in this as my company have this cycle to work ..

    So, in a £1000 bicycle … How much do i really pay at the end of the day ? (End of contract)

    So, in a £1000 bicycle … How much do i really pay at the end of the day ? (End of contract)

    I would be paying £665 for a £1k bike. over 12 months.

    @singlespeed .. Cheers. I’m in 🙂

    Premier Icon eskay
    Subscriber

    My company gave the bikes to us (this is current as the scheme has only just ended). We just had to pay the taxable benefit.

    ” Company Name will give you the equipment at no charge, making it a taxable benefit. You would then simply pay tax on the value of that benefit over the course of the following tax year. Company Name would make an adjustment to your pay code using a P11d tax declaration on your behalf.

    How to work out your taxable amount

    1. Start with LoC amount (eg £1000)

    2. Calculate the ‘residual value’ of your LoC using the HMRC matrix below
    (eg £1000 LoC x 21% = £210)

    3. Multiply the ‘residual value’ by your tax rate
    (eg £210 x 20% = £50 tax payable via P11d)”

    The introduction of the scheme increased sales of bikes.

    I agree with that.. Most of the c2w customers are newbies, and it encourages them to spend up toward the £1000 limit, so often they spend more than they otherwise would. It’s just a tax vehicle though which is simple to implement. If that were encouraged by the government, then I’m sure more small companies would take it up rather than having to deal with an external company. I’ve seen a couple of customers make quick calls to their accountants and then get their company credit cards out. Both ended up spending more as well.

    Unfortunately £1000 doesn’t get you the value it did when the scheme started pre-2008. I asked c2w once what they were doing about lobbying the government to increase this. They didn’t have a clue.

    EDIT: Eskay’s company have got it right!

    Euro
    Member

    Not so fast Wolfie…

    A £1,000 bike costs £1,000 using C2W. What you are saving on is how much money you have to earn to get £1,000 in your pocket (as you don’t pay TAX or NI on it) which depends on your TAX bracket. Shep up there must be on 4o% to get it at that price – your may be more expensive.

    Sorry should have said it can vary person to person and also what ever the agreement is at the end of the process. As far as my boss and I are aware we won’t we paying anything at the end of the scheme. (We are the only 2 on it currently)

    But as it stands the calculator on the website is only a couple of pence out from the agreement I have here.

    More and more staff here are looking at it and the accounts team are looking at what other options are available.

    😕

    So in laymans,laymans term .. If my tax is 20% .. My savings for a £1000 bicycle is 20% ?

    Shep on the other hand has 40% tax rate.. Thats why he pay only £600+ of a £1000 bicycle at the end of the day?

Viewing 40 posts - 1 through 40 (of 72 total)

The topic ‘Cyclescheme having a laff’ is closed to new replies.