[Closed] Cyclescheme - I feel robbed

What was wrong with your previous bike that you got through cyclescheme? Not sure that bikes just last a year then instantly fall to bits. The scheme is not as good as it used to be because too many people ripped the arse out of it....

i don't see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.
you still had interest free credit over a year and saved £60

What was wrong with your previous bike that you got through cyclescheme

You assumed it was a year old. My previous bike was 3 years old when I got my new one.

I wish I ended up with £60 in my pocket when I got robbed...

i don't see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.

I'm fairly sure that as Self Employed you can off set your bike purchase against your tax if you use it for getting to and from work.

As a scheme it increases bike sales - good for the economy
Gets people out on bikes - good for their health

The change in the scheme aligns it with the tax system really so more a clarification than a change. It's a pity that your employer does not go for the extension.

And what was wrong with the three year old bike that it couldnt get you to your work?

i don't see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.

I can help you with understanding that. The scheme is aimed at getting more people to ride to work, improving fitness and reducing car dependency. The unemployed aren't going to work or paying tax so they're out. I'd agree that it seems a bit unfair that the self employed can't use the scheme. However, I'd say you have plenty of tax breaks already, no?

only skim read this at best

but a bit baffled as to how getting a discount of any percentage can leave someone feeling robbed

As an addendum, I'd say that the scheme has been a success in my workplace. I'd say about 50% more cyclists, which is great IMO.

And what was wrong with the three year old bike that it couldnt get you to your work

Sometimes you really are boring. The scheme doesn't require you to prove that you don't have another available bike. I replaced it for the same reason that people replace their cars, bikes or whatever. Because I could and I wanted to.

I assume the £255 fair market valuation stays with my employer (public sector), if so that would probably explain why they want the money rather than offer teh extended lease

Out of interest has there ever been any acountability i.e do you actually have to prove youre using the bike to get to work?

I feel robbed as I was never entitled for it 👿

robbed is maybe the wrong choice of wording.

When entering this scheme, all calculations suggest savings of around 35%. There was no suggestion at the time that there would be any change to fair market valuation. I think this changed should alony impact people who entered the scheme after the change was made, and therefore understood the impact.

Out of interest has there ever been any acountability i.e do you actually have to prove youre using the bike to get to work?

Not in my experience.

but a bit baffled as to how getting a discount of any percentage can leave someone feeling robbed

To use the analogy above, He'd probably have had about £200 in his pocket before the robbery. Cyclescheme charges mean that bikeshops are mostly unwilling to discount, so he lost out on that. Agree that he's had free credit. Seems a bit off that the clarification was applied retrospectively IMO. FWIW, our scheme is run independently and our final payment is just the unpaid tax, so it's very similar.

I'd urge anyone using cyclescheme, halfords etc. to look at running things through accounts, as it's cheaper and pretty easy to do. Seems a shame that people are losing out so third parties can cream off a bigger profit.

Frank, we had this at work recently. Friends came to me just because they see me as all things bike! Anyway, with the help of the staff travel coordinator, we managed to get things changed so we were offered extended lease, p11d or fair market value. That was LA as well.

I'd suggest that fair market valuation of a bike that is a year or so old would be more thatn 25% so think yourself lucky they dont ask you for what it's actually worth.

I can help you with understanding that. The scheme is aimed at getting more people to ride to work, improving fitness and reducing car dependency. The unemployed aren't going to work or paying tax so they're out. I'd agree that it seems a bit unfair that the self employed can't use the scheme. However, I'd say you have plenty of tax breaks already, no?

whatever the aim of the scheme it was exclusive rather than inclusive,the people it was aimed at could probably afford a bike already, from a tax spending point of view the money would be better off spent elsewhere.

i was about to say something about the unemployed wanting to work but lacked the conviction to say something on the behalf of the idle 🙂

any tax breaks i have are between me and my accountant.

I'd troll at any given opportunity

FTFY 😉

from a tax spending point of view the money would be better off spent elsewhere.

That's easy to claim for most things though. I'd say it's better spent on cycling than laptops and twin cab utes for example 😉

the people it was aimed at could probably afford a bike already

Not IME, most of the people at our place who bought a bike were on way less than the national average.

Why don't you ask your employer to simply extend your hire agreement for a bit longer, or alternatively process the ownership payment as a P11d benefit in kind which means you pay tax on the fair market value instead of the full value.

A few numbers for the fact fans:

1. 73% of people who do the scheme are basic rate tax payers.
2. 87% of people who have done the scheme have noticed improved health.
3. 61% of people who have done the scheme did not cycle to work before.

I know the scheme is not policed but I know of a lot of people who have used it to purchase bikes who would not have otherwise done so. That results in more people cycling, better health, reduced car use blah blah blah.

The scheme is/was a great way to get people cycling.

My beef here is the change to the rules half way though. Doesn't seem fair when you have entered an agreement with a clear understanding of what you should expect to pay.

Final complaint is that £255 is coming straight off next months pay slip, little warning and a fair chunk of money to be deducted at short notice.

Does contract law not apply to the scheme?

I'm very surprised that if your doing it through Cyclescheme that your employers have a say in how Cyclescheme administer the extended hire period. I thought during the extended period ownership of the bike was transferred from your employer to Cyclescheme themselves. I'd certainly think it's worth ringing Cyclescheme to see if they can clarify or perhaps talk to your employer.

Just finished my lease term on Cyclescheme bike. I understand the scheme really well, this being the second time I have used it.

The scheme works like this. Company buys a bike. Company leases the bike to you (tax free). Your company can set the lease amount at anything it wants - but most use 1/12th of the value so they get their money back over a year. At the end of the year the company owns the bike. You can continue to lease/ use this foc if they agree. You can buy it at fair market value. or they can dispose of it however they wish (the give to cyclescheme and let cyclescheme lease and sell to you
option falls into this - but they could scrap them, stick them on ebay etc).

As a result, I now need to pay 25% of the original value to buy my bike, plus Vat which has now also gone up.

And yes Snaps contract law does apply - just its based on the actual contract not the imaginary one that people seem to think they signed...

Just had my email off the chaps at CycleScheme this week, looking for another £70 then it transfers to me fully (in three years time).
Happy ...
... Unless the contractual goal posts move again in the meantime !!!

you are under no obligation to do this - you can "walk away". In some cases they'll flog the bike - in others they will just let you keep using it.

My works scheme charges more to walk away from the scheme than it does to purchase the bike from them

Not sure why so many folk are bumping their gums about it...£940 is still less than £1000 on the bike AND you didn't need to stump the cash up all in one go.

I think the Cyclescheme is a great idea but it's been royally abused by most users of it as they see it as an easy way to get a new bike without paying full price (or for those who have really bent the rules, new bikes parts to build their bike). As much as it is going to sting, the fact it's been raped for all it's worth by so many suggests it does need to get tougher to stop folk abusing it...it's a privilege not a right.

I'd love to get a bike on the cyclescheme but due to childminding timings, I can't ride to work as I'm unable to get to collect my daughter in time...plus my benefits are being spent on other things so it would be a toy rather than a means-to-an-end for me...so I've not gone for it.

Totally agree with the OP. What a crap scheme. Was originally sold as getting you a bike for about 40% of its rrp. Now they've changed it to (almost) an interest free credit scheme. Pointless. Glad i had to replace my bike just before my co introduced it, or I'd be riding on a slightly discounted £1000 road bike instead of a half price £2500 one from crc!

Hang on a minute! What the recent tax change meant was that if your company chose to give you the bike for the nominal charge that they used to levy (say £50) you would be liable for tax on the difference between that and the fair market value, set at 25%. So there is no way you should be being charged £255. They could give it to you for nothing and you would then owe the taxman tax on £250 at your marginal tax rate - which would be £100 if you are a higher rate taxpayer. Or they could continue to charge the £50 and you would owe £80 tax.

Falkirk-mark: My works scheme charges more to walk away from the scheme than it does to purchase the bike from them

I do not have the letter to hand but I think it was a disposal fee (our company has an external company doing the paperwork/admin side) TBH its not a major issue as I only had to pay £130 on a £1000 bike. IIRC the disposal fe was £250

i can't actually use the scheme myself but it amazes me how many people are bitter and twisted that they can't and others can 😛

i can't actually use the scheme myself but it amazes me how many people are bitter and twisted that they can't and others can

Yeah some ugly responses on here from some of the usual unpleasant suspects.

Not sure why so many folk are bumping their gums about it

The OP said that changing the guidance after he'd started the scheme was the issue. Totally fair point IMO, I imagine everyone would feel aggrieved by that.

I think the Cyclescheme is a great idea but it's been royally abused by most users of it as they see it as an easy way to get a new bike without paying full price

How is that abuse? That's the point of the scheme, to encourage people to cycle by providing
a financial incentive. I suppose they could have spent the cash on lots of pro cycling leaflets though, I'm sure that would have been a better option...

As much as it is going to sting, the fact it's been raped for all it's worth by so many suggests it does need to get tougher to stop folk abusing it

It hasn't got tougher to stop the abuse though, for many people it's become pointless since they could get a better deal outside the scheme. My theory is that it's got tougher because the country is in a difficult place financially and is saving money where possible. Still a shame though.

plus my benefits are being spent on other things so it would be a toy rather than a means-to-an-end for me...so I've not gone for it.

Can you see why it'd be a boon for someone earning £6.50 an hour though? I do wonder how many people make negative comments because they don't benefit directly from C2W. Though I'm keed to point out that more people cycling is good for all of us.

Have a look at the stats on this thread, it has had a positive effect

Can you see why it'd be a boon for someone earning £6.50 an hour though?

They're probably not eligible, you can't do salary sacrifice if it would take your salary under national minimum wage. That's why the scheme is so flawed, unavailable to those who might really benefit, biggest discounts to those who don't really need it (higher rate taxpayers)

and another thing!

My gross deductions are 12 x £70 and then when I add on £212 fair market value (amount before VAT) that means that my employer has recovered £1063 for a £1000 voucher. Not bad going when you think that they would have already recovered the VAT on the initial purchase!

They're probably not eligible

At £6.50 I think they would be able to spend 57p per hour worked on C2W, so assuming a 40hr week they could get a bike for around £400? I agree it's flawed in that area but it's much better than nothing 🙂

I think we need to remember that Taiwan probably produces these bikes at 'tuppence each'. 🙂

Frank - your grievance is really with your employer - there is nothing to stop them running the scheme at a loss. Most employers pass on the vat saving (where they can).

Mark - its not your bike so why would you have to pay a disposal fee? Is that written into the T&C's of the original contract?

I don't think it is right that my employer makes a profit out of the scheme, if my calculations are right then they will.

I don't think it is right that the fair market value clarification should be introduced retrospectively to current users of the scheme.

I too am amazed by the opposition on this thread to the scheme. It is there to get more people cycling more often. That can only be a good thing.

[i]The scheme is not as good as it used to be because too many people ripped the arse out of it....

[/i]

I have to admit I've had three bikes from it over the years. Seemed daft to turn down the chance of a half price bike. I do commute to work by bike every day though.

The scheme is not as good as it used to be because too many people ripped the arse out of it....

Most people didn't in my experience. It seems like this on a mountain bike forum obviously, but thats hardly a representative sample. In my office, most people bought sensible bikes and started cycling to work.

In any case, it has nothing to do with the HRMC's clarification of an acceptable fair market value. Thats just a lack of communication between government departments.

Why more employers don't just hand it over for free and charge the tax on the difference i don't know??

Why more employers don't just hand it over for free and charge the tax on the difference i don't know

By my reckoning, they paid £825 for the voucher (£1000 - vat at 17.5%)

They have then recovered 12 x £70 monthly repayments = £840 + £212 final valuation. That is a total of £1052, and a profit of £227.

That might answer your question

Wow, I'm amazed at how many people are having a go at the OP.

I'm in the same position, I signed up for my last bike thinking that I'd get it at 40%ish off. As I understand it's just tax/NI savings so not really something that hurts others considering how much we all pay anyway. The rules changed half way through the year meaning it was nowhere near as good an offer as it looked at first.

As per the OP, if I realised how much the end cost would be I'd have checked out the sales first. Still waiting to see my pay slip when the cash comes off as I never really got the way the letter was worded.

Don't forget the employer doesn't pay NI on the salary sacrifice either - therefore saving them even more money.

I don't blame you for being annoyed, it was marketed as a way to legitimately get a really good deal on a bike than you could probably normally get and they moved the goalposts...bad 🙁

Don't forget the employer doesn't pay NI on the salary sacrifice either - therefore saving them even more money.

Any idea what that is worth? I'm trying to pull together the numbers for the 'chat' I'll be having with them about this on monday.

If it was just a case of them having to apply new rules then fair enough, but I can't quite get my head around the thought that they may be profiting out of this.

I think NI is quite confusing compared to tax - this might help?

[url] http://www.hmrc.gov.uk/rates/nic.htm [/url]

...and obviously double check mt facts - I would hate for you to use it and be wrong!!

Doesn't help your 'chat' on Monday but the C2W scheme has to have benefited us, the cycling community. More people than ever seem to be getting bikes which means more on the 2nd hand market, more people using trails meaning more gets invested, and so on.

Ah........

[url] http://www.bike2workscheme.co.uk/employers.php [/url]

I think it is a great scheme...if more people bike then great. I just get annoyed with the stories of folk with lots of bikes and use the scheme for a play bike not a cycle to work scheme bike. It is a personal grumble.

Why should it bother you if I use the bike for commuting or not? I'm perfectly happy to commute on a 17 year old mtb so like to save the good bike for the weekend. Don't really see what the difference is.

I would like to see people getting forced to cycle in so many days over a year if they use the scheme but as long as it gets more people getting healthy on a bike I'm not going to complain.

In my workplace I'd say it's about 50/50 of people who are using the scheme for a play bike or never cycling in and people who would never have riden to work before and now do,

Poly, I didn't read anything on the original form but in the options for the end of the agreement is this sentence (If you choose to return the cycle, there will be a handling fee of £250 that will be deducted from your net pay in June).As said it makes no odds as I am keeping the bike.

I know...not sure why it does, but it does...and for some reason I can't keep my gob shut about it on this thread...so feel free to ignore my rants...I'm not entirely sure why it is bothering me so even more confused as to why I need to share this with anyone.

**Update**

Well, that seems to be sorted.

It wasn't an attempt to fleece money, more like general lethargy and no-one bothering to look into the alternatives to applying the adjusted market valuation.

Pointed out to them the various options and costs etc. They seemed especially concerned about the potential to make profit from users of the scheme, agreed that that was not what they wanted. Going to sell the bike to me for 5% of its value, I will incur taxable benefit. Not as good as extended lease but better than previous offering! Future users or the scheme will have the extended lease option.

All sorted out quite easily so panic over.

Now that I'm clear of this years scheme I'll need to start thinking about that carbon road frame I fancy fiddling through the next one 😉

What is annoying is the way the rules changed for many people just as they were reaching the end of a B2W scheme. And as someone else pointed out they ended up paying a big chunk in one month because many payroll dept's just applied the rules as they saw it.

In my case because of delays in processing I ended up paying £100 more for the bike I was after as I ended up having to have a 2011 model.
Then the really galling bit was to be told if I had just walked off the street when I first enquired, I could have got the 2010 one I wanted with 30% discount and 12 months interest free.

Going to sell the bike to me for 5% of its value, I will incur taxable benefit.

A-ha! I wondered if this was possible, so basically you pay 5%, and are then taxed on the taxable benefit, i.e. on the bike you've just been given, yes? In which case, how much do they assume the taxable benefit is worth, do they still apply HRMC's 25% fair market value?

I kind of wished my employers had gone down this route, if only so that I could [s]rip the arse out of the scheme again[/s] have bought another £300 commuter, instead of waiting 31 months.

13fm. Tax should be payable on the difference between the FMV and the "sale" price. So, for a standard rate tax payer using franksintras example, that would be 20% of 20% - i.e. 4% of the value of the bike. Of course, a higher rate tax payer will pay more (the only part of the scheme which favours the lower paid).

Taking a £1,000 bike, for a std rate tax payer getting no VAT or NI saving, that would result in a net saving of £110.

For those still interested, this is how the new numbers worked out.

Employer sold the bike to me at 5% of value

Bike £851.06 (£1000 - vat) x 5% = £42.55 plus £8.51 vat = £51.06

HMRC valuation was £255.21, therefore taxable benefit is £204.26. I will pay 20% of that amount in tax, it will be applied as adjustment to my tax code.

You don't actually have to pay *ANYTHING AT ALL* for the bike according to the tax man. They just want the tax on 25% for the original RRP. Most employers just see 25% and decide to charge that.

What NBT says, I'm waiting to see what my employer does and how I can point out their error if they use the cop out of 25%.

Can someone explain to me why cyclescheme don't have to pay my employer the fair market value of my bike when the ownership is 'transferred' to them at the extended hire period? Why can't my employer 'transfer' it to me instead!?

I feel like I have been ****ed in the arse

we have been given three options at end of hire period:

Option 1 - for 10% of the voucher price (should be a flat rate as it is an admin charge... but hey) extend the hire period for a further 54 months

Option 2 - pay a value to take title based on HMRC value tables

Option 3 - Give bike back to employer incurring a 10% of voucher value for the admin charge

or....

‘If we do not hear from you by this date we are obliged to report the bicycle and equipment as a benefit in kind to HMRC’

i think i'll just let them report it to HMRC....

My employer has stopped the 'bling to work' scheme after Inland Revenue got sniffy about it.
A better way to encourage cycling would be to drop VAT from all bikes and accessories below say £1000. I'm sure that this would be cheaper for the government to administer, benefit more than just the big retailers who cash in on the current scheme, and not be subject to all the nonsense about nominal resale values.

yer think our scheme will stop - shame it took 4 years of badgering to get in the first place.. across two intakes over 700 people signed up..

to be fair a large proportion actual use their bikes to get to work and many of those were non cyclists to start with

I honestly can't believe some of the sanctimonious drivel on page 1 spouted by some about C2W schemes in general.
Bottom line is that it was something that some people could previously take some benefit from. However, in it's current form, those benefits have been degraded to extent that it is no longer sufficiently beneficial and should probably be scrapped IMHO.
Please Dave, get rid of the government department that administers it. I don't want to pay their wages any more.

My view on the scheme is, If there is a benefit to you, take it. If not, don't.
If you want to flame me for feeling robbed, just like the OP, here's your chance:
I didn't need a new bike to cycle to work. I've got a perfectly good road bike for the few occasions that I do that but 40% off £1k spend was attractive.
The chosen scheme (another C2W, not Cyclescheme) was through a well known national chain and the vouchers were consequently accepted at only a few other independent outlets. I didn't want anything from that chain! I felt robbed!
I applied for the maximum in the hope that I could use it as part payment for something I really wanted. I knew that was specifically not allowed but I thought I'd be able to cut a deal somewhere. When I went to buy I found that the independent shop was receiving close scrutiny from the national chain and wouldn't consequently risk taking the voucher against a >£1k bike where they "may, allegedly" have previously done. I felt robbed!
... so I decided to buy myself a cheap £300 MTB that coincidently would be fine for another family member to use, and to spend the rest on spares and bits for me (set of Flows/Pro2s, SLX chainset, MW80 winter boots, spare ST Minions, chains, cassettes, etc). Basically picking stuff that was at a good discount anyway and factoring loyalty discount in too. When I went to buy the stuff I found the shop unwilling to honour web prices on the scheme, only selling at RRP. I felt very robbed! I don't think I've ever paid RRP for any single purchase over £100 in my life !!!
Still, 40% off meant it was worthwhile. Just not as worthwhile as it might have otherwise have been.
The change to the final market value (which I fortunately avoided) makes the scheme worth very little to me now. I won't bother this year.

<dons flameproof suit and stands back>

Pff. You pays your money, you takes your choice. Whining about not getting something for nothing won't get any sympathy from me!

Definately not whining molgrips.
I agree, you pays your money, etc.

<Edit> It was the sanctimony that hooked me </Edit>

E-T, if it's the well known national chain I think it is, they deduct 15% from the number on the voucher when it's redeemed with an independednt. Your shop will have got £850 in return for your £1000 voucher.

If that makes you feel any different about the RRP.

ned, I think we're on the same page. I understood that there was a hefty % fee to the scheme operator.
On balance, I don't [b]really[/b] feel robbed as I clearly benefitted from the scheme.

I think I must have been less than clear in the intent of my post.
I meant it to read as... you frustratingly loose lots of little bits along the way but if it's still worthwhile overall - then go for it, and if not - don't.

I looked at it at my old work when it came up. It clearly wasn't worth it because you had to pay over-inflated prices for all the bikes. I think it was being run through a third party company who were clearly on the make.

It's Britain remember...........did you really not expect to get shafted somewhere along the line !!!

we're with halfords here, yet to have a final payment come out (will be in the next couple of months). If they decide to take the 25% valuation, then a low rate tax payer will have paid (using £1000 as the example)

£70/month after tax per month (my company refuses to take vat off) = £833
£250 'one off' payment
==========
£1088

for a non-discounted £1000 rrp bike from halfords. works out as an APR of 15% (actually a little lower as £250 is borrowed for 12 months but the rest is borrowed for 12 months but being repaid, but its def over 10%)

Can't you pursuade your employer to do the 4 year deal thing? What do they have to loose? With my employer I'd complete the payments in a year then wait another 3 years before making the final payment which based on valuation would fall into the 'bottom bracket' (see what I did there) of 5%.

I would certainly use the scheme again as I'm not planning to change jobs just yet and it would be the best way to pay off the bike that I want. I would be less tempted to use the scheme if I wasn't happy in my job and I could pick up a good bargain.

Just hand back the bell. The rest of the bike was worn out and had to be scrapped for safety reasons?

Has anyone returned a bike at the end of the lease? With the new rules in place is there about to be an influx of 12mth old, hardly used £1k bikes onto the second-hand market?
And where will they sell them all?

It's not your bike to scrap - it's your employers. And most contracts I've seen have the onus on the user to maintain/insure it in the event of loss.

The whole scheme was dodgy from the start, the whole premise of people cycling to work was flawed, if it had been based on encouraging some of the purchasers to ride to work it would have been much more honest. Couple that with the fact it was all lumped onto employers to administer whilst the government got the kudos, the fact it was only open to you if your employer decided to take part and then the recent tightening up of the tax enforcement which had been always been pretty lax through customer and practice making people enter the scheme under false pretences. If a private company had sold using the examples Cyclescheme used and then enforced the small print that was in contracdiction of the sales patter trading standards and the courts would have been involved.

Typical government half baked scheme (like the home computer scheme) which will make it even less likely in future for people to sign up to this sort of initiative. An excellent concept right royally stuffed up by people who didn't understand the people they were supposedly helping.