- Is the cycle to work scheme still a good deal?
I’ve used two scheme providers in the past and I pay 40% tax.
You need to be careful to ensure that your costing includes:
– Payments, less tax (this bit looks attractive)
– Hidden “cost of finance” charges; typically 10-15%
– 7% end of term fee / 3-year “hire” (3% below £500), as dictated by HMRC
– any charge by the bike provider; e.g. Planet X charge 10%
The savings are substantially eaten away by the above. I was considering going for a £1k voucher through Cyclescheme recently and calculated that the overall cost was going to be c.£850 for the bike I wanted.
“tomketon” will find that the 39% saving won’t be that and that he’ll need to pay £70 at the end of the first year, or return the bike.
So, the main attraction IMO is the convenience of a salary deduction. It’s an easy way not to pay £1k upfront and make the cost more bearable.
I’d consider using a £1k voucher and putting more money in to buying a more expensive bike… except that I rarely buy complete bikes.Posted 4 years agoriddochSubscriber
The rules of the scheme don’t let you top up, basically your company owns the bike and if you’ve put money in that makes in tricky. You used to get round it by the store discounting the bike to the voucher amount then selling you some surprisingly expensive accessories. This probably would cause problems for any insurance claim though.Posted 4 years ago
As one of the other posters said the savings are not that great anymore put it is still a cheap/free way to get an interest free loan.
What’s also useful is that you more don’t need to buy a bike you can just get accessoriesspawnofyorkshireSubscriber
I found that with a sale price (unavailable in scheme), interest free credit card for 18months and £95 back through quidco it worked out cheaper for me just to buy my MTB. I’m on the lower tax rate though so you need to make your own calculation.Posted 4 years ago
Buying using credit would give you access to more options and direct sales like canyon or Rose bikes as welltomhowardSubscriber
What SOY said,
I got a much better deal buying a 2013 model (2014 has a very slightly different paint job) with 0% finance than I could have had on C2W (I’m basic rate tax, but the deal was still better than if I was on higher rate)
Much better IMO, you arent limited to where you shop nor by the £1000 limit, though I *think* if your work has a consumer credit license, you can (could?) have up to £6K.
edit: Plus when you buy on finance, the terms are laid out in black and white, unlike C2W which seem to be made up as they go along…Posted 4 years agopolyMember
Which is all very well if you want last years model and if the bike you want is heavily discounted. Not all are so you are even more limited in your choice.
Indeed – and certainly for higher rate tax payers I’m not sure there are that many bikes with 50% discount (no NI or PAYE) on them, which are not mutant sizes or simply overpriced in the first place.
So, assuming you have the £1000 price cap and actually want a bike for commuting on, most weathers, year round, road – but not necessarily well surfaced – what is the ‘best’ purchase available? I’m thinking the Ribble 365 might be hard to beat?Posted 4 years agotoyrobotMember
Very interested in hearing the opinion of previous CTW buyers. I have been considering trying to get my employer (a University. I can’t believe they’re not already doing it) to sign up but it looks like there’s more to consider than the CTW FAQ section suggests. For example, I remember only a couple of years back my LBS telling me they would happily sell me any bike I wanted using the £1000 voucher (I later found out my then employer wasn’t signed up either) and I’d pay the rest. For the reasons above it now seems like this is either impossible or not recommended.Posted 4 years ago
I know you can us it against safety equipment, can you use it against parts?mindmap3Member
It was a good idea for me – I was able to sneak another bike in without paying for anything upfront!
I still reckon that I’ll save money (I bought a 2013 Allez Sport early in the cycle so no chance of discounts etc). As a lower rate tax payer its cost me £45/month for bike and shoes (£540) plus two years at £1 per month (£24) and the final payment of £52.50 – a total of £616.50 against a sepend of £810 or so.
As others have said, the savings are better if you pay more tax.Posted 4 years agomonkeyboyjcMember
I signed up to the Evans scheme through my last employer – got a Cannondale BayBoy with a RRP of £1400 for £999 in the sale on the scheme – it should have been around 50 a month for the 12 months and then the final token payment. But HRMC change the parameters half way through my hire period so the final ‘token’ payment had to be market value of 25% in the first year reducing to 0% in year 5. The upshot was that I left the company a year later and had to pay around £180 in the final payment so the bike ended up costing approx. £800-still better than the £999.
I now have a new job with a different company and signed up to their scheme – so its not put me off – just watch the final payment amounts….Posted 4 years ago
Ummm lots of different scenarios going on.Posted 4 years ago
Me I like things kept really simple like me, no fuss, no messing around.
After talking to our accounts dept today they where complicating the whole matter so I guess they won’t even buy into the scheme.
So I think I will try and find a second hand one myself.DibbsMember
You’re only liable for the TAX on the amount of final payment eg. 25% of £1000 = £250, amount payable @ 40% tax = £100. A lot of people appear to be under the impression that the full £250 is payable, and I wonder how many employers are under the same impression (or just pulling a fast one). 😕Posted 4 years agotoyrobotMember
Am I right in thinking that although some people have ended paying more than they thought because of changes in process, that no one has ended up paying more than the bike was priced at? I guess any saving is a good thing. Sorry if this is a stupid question, this is really the first time I’ve looked into this scheme.Posted 4 years agomonkeyboyjcMember
They didn’t “change the parameters”, they just clarified what everyone should have been doing since the scheme started.
By doing that they changed what I signed up for mid lease – my accounts department told me (verbally) that the final payment was typically a pound. By hmrc clarifying the scheme, accounts got scared that if they didnt change to this thinking imeadiatly hmrc would be after them so they applied this to all current and future c2w schemes.Posted 4 years ago
They got so much stick for it they stopped offering the scheme as soon as they could.
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