I’ve been a hybrid worker (and now fully remote) for 20 years so I always felt when the schemes launched as “cycle to work” I didn’t feel I fully qualified, and neither did my previous employers. But my current employer operates with Cyclescheme and their narrative doesn’t reference cycling “to work”. It seems the narrative now is if it helps our employees stay physically and mentally fit for work, then great. Which I think is a more appropriate view of it, especially as most of my employer’s workplaces offer no secure cycle storage or shower facilities. Is the national narrative now along these lines do you think?

It’s now (always was really)simply a tax avoidance scheme that gets better, the more you earn. Now there’s no limit (save for what your company is willing to risk) to how good it can be.

The ‘narrative’ rather depends on how that sits with you. No one else cares.

I agree it’s a more appropriate vow of it. Ours still states it should be used more than 50ish% for journeys to work but really nobody cares whatsoever. Maybe as I work for a large company it’s different, but I’d be surprised if any company really scrutinises employees to check the rules are being followed on usage.

to check the rules are being followed on usage.

I don’t think there are any now, not that could land you in any sort of trouble. Not totally sure there ever really were.

It doesn’t matter what you use the bike for. No one cares, no one checks.

My old c2w bike has never ventured into the office. And was a full suspension trail bike.

My new job will be fully WFH but our cycle scheme is utter shite and not worth bothering with

Just for the record they don’t necessarily get better the more you earn.

Just for the record they don’t necessarily get better the more you earn.

eh?

Earn minimum wage, get nothing.
Earn enough to pay lower rate tax ~20% saved, as long as you don’t take yourself below minimum wage, after deduction.
Earn enough to pay higher rate tax ~40% saved (depending where your deductions take you to)
Plus more if you take into account any benefits you may retain by not moving into a higher band/salary.

Edit, plus save NI

That’s it, isn’t it? What situation is there where earning more makes it a worse proposition?

End of life residuals rather dilutes benefit too, and the EoL tax payment linked to tax band so higher earners pay more.

Not clear if that’s an HMRC rule change or scheme operator. Previously could extend the hire period and EoL value a nominal sum. Now after 18 months it’s circa 25% residual. Which would be taxed at 40% for higher earners.

So £2k bike x 25% EoL residual x 40% = £200 tax bill at end. That knocking 10% off benefit you make over the initial period. Given most schemes also include a somewhat hidden finance charge, I question how much saving you really make, at whatever tax band.

IMO the schemes are never as transparent as could be at outset on the finance cost and EoL position. Other than getting to ‘pay up’ over months, probably sale deals and buying outright the best saving you can make.

My view anyway.

plus you generally have to buy bike at full RRP, depending on the bike, certainly pre covid healthy discounts used to be possible. I’ve not used the scheme for a long time because it worked out cheaper to buy direct in the sales.

I’ve bought two bikes and never had to pay a fee at the end, just take the extended hire period with no fee. One was a cheap hybrid where I probably saved £100. The second was a £3300 bike which cost me less than £2k (additional 15% discount through cycle solutions), so definitely a massive saving I couldn’t have got elsewhere. Lower rate taxpayer.

I just ordered my voucher last week after a lot of research/phone calls about our scheme (Halfords Cycle2Work).

What I have found out contradicts a bit of the above….

– You don’t need to buy a full RRP bike, in fact you can even buy an ex-demo.
– Being in a higher tax bracket most definitely saves you more off the cost of the bike.
– You effectively pay nothing at the end. Our scheme is a 12 month one – you pay the full price of the bike over 12 months through salary sacrifice, less tax (40%) and NI (1%). At the end of the 12 months, Halfords offer three options. One of which is an extended hire agreement for another 3 years, at NO COST, at which point HMRC deem the residual value of the bike to be negligible and you pay 0 tax on in after the extended period.

Upshot is I get a £1500 bike for £796.50 (our org gives you a 10% discount up front). And no one gives a monkeys what you actually use it for.

I too took the extended hire period to reduce residuals. HMRC correctly sussed that three year old Bromptons are worth more than £10, and applied a hefty residual value. This fed down to all bikes based on initial price. I haven’t had one for years now as I’ve not seen the value compared with good used bikes. Last one was a £3500 road bike that I did ride to work on nice days. I think the eventual payment was £100 after the maximums period. Might look at another Brompton this year as the price is always RRP and the used values are silly.

This is my Cycle to work bike

Definitely might ride it to work one day.

+1 on often buying without the scheme opens up all sorts of deals and discounts. We did it once and felt it not really worth it.
We have subsequently bought three brand new bikes in sales and three second hand bikes since then, and I doubt we would bother again.

plus you generally have to buy bike at full RRP, depending on the bike, certainly pre covid healthy discounts used to be possible. I’ve not used the scheme for a long time because it worked out cheaper to buy direct in the sales.

No you dont necessarily. Just ask to ‘pay’ the fee. For example if a bike shop is selling a £4000 bike for £3000, but no cycle to work, if you’re on cycle scheme just offer them £3255 for the bike. I am willing to bet they’re going to say yes.

+1 on often buying without the scheme opens up all sorts of deals and discounts. We did it once and felt it not really worth it.
We have subsequently bought three brand new bikes in sales and three second hand bikes since then, and I doubt we would bother again.

Depends what you’re after really. If you want something specific and its not on sale then C2W makes a lot of sense. If you’re just looking for a bike, then yeah, buy what ever is the best offer.

I bought a Cotic Solaris frame, Salsa carbon fork and Hope headset, also a frame bag and spar mech hanger for just over £1600, I’ll save aout £550 after a year. I did look around to see if there was anything else I wanted that was on offer but I wanted the Cotic so it made snse to use the C2W scheme.

I do think it’s a load of shite though how the poor don’t get a benifit but the better off you are the more you save. Totally wrong way round IMO.

I do think it’s a load of shite though how the poor don’t get a benifit but the better off you are the more you save. Totally wrong way round IMO.

This I agree with.

I work from home and have a bike purchased on C2W, I wasn’t asked or told about any requirement to use it for commuting.

I work from home and have a bike purchased on C2W, I wasn’t asked or told about any requirement to use it for commuting.

What did you think C2W stood for?

I finished paying for a very nice frame apart from the ‘extended hire period’ bullshit, immediately ordered an Ebike on the same scheme, as soon as thats paid off I’ll get something else.
I bought my commuter in the sales.
Its a tax fiddle I’m happy to use, as I’m not self employed or a ‘company director’ or a politician its the only thing I’m aware of that I can take full advantage of financially and still be within the rules.

I said “generally” you pay RRP not you have to – it depends on the brand / bike shop.

If you want a scott spark for instance, like I did, it made sense to wait for when westbrook used to do its annual discounts to shift last seasons stock. The discount was way more than C2W and there was no faff about hiring bollox.

However when I wanted something generic, a boardman TT, I was able to use halfords, and they did also sell it at the (slightly discounted) price plus C2W. So it worked out better C2W.

And yes both bikes have / were cycled to work, but no one checks, and how on earth could it be

They should just remove VAT on bikes.

You can also buy parts and equipment on the scheme (least you could pre covid) but that also was a bloody faff and probably only worth it for a big purchase like wheels / groupset / forks. Again it was cheaper to buy a 105 groupset from merlin direct when I looked into it. No idea how residuals are worked out if you spend a significant amount on parts and stuff like clothing (very easy to spend £500 just on clothing if you are starting out)

What did you think C2W stood for?

Ours is just called CycleScheme..

But I agree that it’s a tax fiddle that benefits the most wealthy, the most often and that the system should be inverted.

But, after just sneaking into the 40% band last year, I used it for the first time. £2400 Titus El Viajero, reduced to £1525 (including shipping) and bought on the CS at £84/m for 18m of which, after tax fiddles, only costs me £41/m over 18m. That’s a Ti Hardtail for £740 + the final fee of 3-7% (I don’t know which yet) No fee for use at PX…That’s a significant saving. I’ve commuted on it when going to Ashton court after work, which makes for a 90km ride…my knees usually hurt quite badly after this!

I do wonder if some of the inflation we see in bike prices is driven by schemes like this both in the US and the UK?

answering my own question:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21667a

In calculating the original price of the cycle, include safety equipment fitted to the cycle (such as lights and bells) but not safety equipment which would be worn by the cyclist (such as helmets or reflective clothing). Where used regularly for commuting and/or travel between workplaces, safety equipment worn by the cyclist is likely to have a market value that is lower than the table percentages for a cycle and cycle-based safety equipment.

well, thats clear then

what happens if you bought a groupset, wheels, tyres, jacket, helmet, shoes etc… but no bike…

also reference to the ‘condition’ of the bike in the final valuation, seems if you keep it nicely maintained it could cost you more in the final valuation!!!

Just to add my two pence worth, although DT78 and some others don’t appear to be listening 😉

You can buy reduced bikes. ‘Someone very close to me’ paid around £1,850 for a Stumpie Expert Carbon with an RRP of £5,200. They also got BC discount on another C2W bike. And 10% off a halfords bike. Actually, scratch that, they got 10% off and a free upgrade to the next model up from Halfords. The only time they didn’t get a discount was at the height of CovidBikeShortage where the shop added 10% back on to the various accessories that were reduced in the sale. (The bike stayed at RRP)

There are a few companies ( or at least were during covid, that will add a charge onto sale bikes to cover the C2W fee, but they are rare and will get rarer as overstock kicks in. And you still pay a helluva lot less than sale price overall.

You don’t pay any fee at the end unless you totally screw up. The most I paid was £0.01 to extend the hire agreement with Evans for another few years.

And yes, the scheme is an abomination in its current form and should be scrapped.

Out of interest @DT78, how many times have you used C2W scheme?

I do think it’s a load of shite though how the poor don’t get a benifit but the better off you are the more you save. Totally wrong way round IMO.

totally agree.. even though i benefited from the higher tax saving

A lot of people I work with have bought bikes on the cycle to work scheme and cycled to work on them.

An MTB forum and not really representative of people using the cycle to work scheme.

It’s no different to ISAs or Pensions, people with no money can’t benefit, those with money can.

The last 2 places I’ve worked at, the scheme has been terrible – administered by an outside agency on behalf of HR within a wider package of “employee benefits”. They send round emails inviting you to apply for vouchers for 1% off a CenterParcs holiday for 4 if taken anytime except half term or school holidays or 0.5% cashback on shopping from Boots when you spend £200 or more.

Utter bollocks.

Sadly they also manage the C2W scheme and put in all manner of restrictive clauses. The current place insists that you must use the bike 3 days a week to commute to work although how the hell they check this I have no idea. but the limit is £2000 and you can only buy from Halfords so it’s pretty pointless anyway.

I tried all sorts at my previous place to get a different scheme or to broaden the range of shops you could buy from and all that happened was they eventually put the limit from £1000 up to £3000.

There’s no doubt that some people do very nicely out of them.
Sort of related, when I worked in a bike shop, we offered Interest Free Credit and there was a long form to fill in, you then had to call the company and run through it all over the phone. Nightmare process. The people who really needed it, the desperate ones trying to buy a £500 commuter – invariably their credit rating was poor and they couldn’t get it. The people buying a £4000 bike were almost always the sort that could just buy it anyway but they max out all their credit options and because they paid it back, their credit was good and they’d be in the shop buying another bike on another credit agreement a year later.

+ the final fee of 3-7% (I don’t know which yet)

Is there actually a way to tell if it’s 3 or 7%?

Cyclescheme says:

Own it later – You pay a small refundable deposit (either 3% or 7% of your certificate value) and continue to use the equipment for 3 years.

3 %or 7% must be based on something??

It’s no different to ISAs or Pensions, people with no money can’t benefit, those with money can.

True – but if we are looking at cycling being a cheap commuting and utility option for folk, then the poorer in society have most to gain from it. Climate change is a growing a social justice issue.

I get that there will always be bigger houses, savings, higher salaries – but so much of what we create around schemes like this is invented by middle class, ‘wealthy’ people…

Can I just point out that if you think that the C2W scheme is unjust & should be targeted at lower income earners… Nobody is forcing you to use it. Just buy a bike & pay your tax as normal, rather than actively choosing to use the scheme & thereby reducing the government’s income.
I believe that this is sometimes known as hypocrisy.

I don’t. None of the uber-niche manufacturers accept the vouchers 🤷

I’m currently 6 months into the ’12 month hire’ period for my DOLAN Gravel bike – it won’t be seeing the office as its 30 miles away with the Dartford crossing in-between.
As soon as this is paid up (July) i’ll be doing the scheme again to replace my aging Giant Defy road bike.
Cycling is good for my mental and physical health – that’s justification enough for me to use it.
I agree its a bit unfair that those of us who pay 40% tax benefit more than those who arguable actually need the scheme, but TBH it doesn’t keep me awake at night.

I am listening, I’m just not agreeing….

I have used C2W 3 times, once in the first few years (2009?) it started to buy a charge duster, which has done literally thousands of trips to work). Once for a boardman TT (2018?) where I did get discount on C2W and has been used for about half its mileage to go to work (and then train after), and once for a small amount of parts (2020?) which was a massive ball ache, halfords refused to do it and take the voucher and I eventually had to use tredz and buy slightly different stuff which would have been cheaper direct to merlin.

I have bought many more bikes not on C2W considering you can use it annually. Once you run the numbers it doesn’t always work out cheaper depending what you are after. So it is not the no brainer saving you lots of money scheme, with strings attached, it may seem at first glance. Always check what discounts you can get.

Our C2W scheme is the halfords one, which I think is less popular with bike shops as it charges a larger margin, hence they don’t want to do discounted bikes on it, or they charge something like 10% plus an admin fee, so unless heavily discounted, its not worth it when you add in the final valuation fee.

In summary – check around, and run the numbers you maybe better off not using C2W

The 3 and 7% is based on the value of the bike, although in my experience it was the value of the vouncher not the bike, though it would seem I could have argued the toss. See the link I put up there in an earlier post

Entirely your choice. HMRC staff are expected to do tbe majority of the bikes usage cycling to work, but we haven’t got time to check our staff, let alone anyone else’s.

For those on a higher rate of tax, the schemes offer a significant saving. If you receive child benefit and earn slightly over 50k, you could potential get your purchase for next nothing. I picked up a discounted MT500 Waterproof with my C2W scheme.

It does seem like an unfair tax break that benefits middle earners. There’s a certain amount of hassle sorting out the voucher and your employers scheme might not be accepted at your local/preferred bike shop. There is also the potential problem of being half way through paying for your 4k bike and changing jobs.

The current place insists that you must use the bike 3 days a week to commute to work although how the hell they check this I have no idea. but the limit is £2000 and you can only buy from Halfords so it’s pretty pointless anyway.

@crazylegs the halfords vouchers can be used in a variety of lbs, and also at tredz, and you don’t have to buy bikes – so you can buy a new fork/groupset from tredz and use the vouchers for that

C2W – small middle class tax dodge.

Wider issue with all salary sacrifice schemes is they provide more tax saving the more you earn, yet those on low/min wage can be excluded if the sacrifice takes them below the legal min.

I managed to get a scheme implemented year back at a large organization and we developed an in house scheme to solve the low pay issue – shame the couldn’t sort the low pay issue  but hey…