Can someone explain the cycle to work scheme to me?
Discussion
I’m no expert, but I don’t think there is any BIK if you change jobs during the ‘extended hire’ ie free period
From one of the schemes:-
During the extended use period, the employer has no responsibility to contact Bike to Work Ltd, as the agreement is between Bike to Work and the employee. If the employee changes jobs the agreement is still valid.
The monthly payment is - tax & ni also
From one of the schemes:-
During the extended use period, the employer has no responsibility to contact Bike to Work Ltd, as the agreement is between Bike to Work and the employee. If the employee changes jobs the agreement is still valid.
The monthly payment is - tax & ni also
The way I understand it is.
Your employer buys the bike,
You pay them back over a period out of your salary before tax
you then save money on the cost of the bike, so your £2400 bike costs you like £2000
at the end there may be a small transfer fee
if you leave before its paid, you have to pay the remainder before you leave.
Your employer buys the bike,
You pay them back over a period out of your salary before tax
you then save money on the cost of the bike, so your £2400 bike costs you like £2000
at the end there may be a small transfer fee
if you leave before its paid, you have to pay the remainder before you leave.
brickwall said:
Ok so
- For 12 months my employer “rents” me the bike, and I pay the “rental fee” from pre-tax salary
- After 12 months the ownership transfers to the scheme provider. I continue to “rent” the bike from them, but at a cost of £0
- If I move employer in that time there’s no tax implications. The only thing I can’t do is sell the bike. (Because officially it’s not mine to sell).
- After 4(?) years the ownership of the bike is transferred to me, at fully depreciated/zero value, so no BIK implications.
That’s what my scheme does, my understanding.- For 12 months my employer “rents” me the bike, and I pay the “rental fee” from pre-tax salary
- After 12 months the ownership transfers to the scheme provider. I continue to “rent” the bike from them, but at a cost of £0
- If I move employer in that time there’s no tax implications. The only thing I can’t do is sell the bike. (Because officially it’s not mine to sell).
- After 4(?) years the ownership of the bike is transferred to me, at fully depreciated/zero value, so no BIK implications.
Zero ‘extended hire’ fee requested also.
If you ‘lost’ the bike after 18 months, nobody would know or care anyway
LeadFarmer said:
Or just ask the bike shop if they will knock a bit more off instead of going down the C2W scheme. Thats what I did, as I told them I could either buy the bike there and then, or wait for my C2W application to go through. They gave me a discount and I purchased it there and then.
I signed up for a Giant Fathom 29 1List price £1499
My provider deducts 10% first
Delivery to my door was 2 weeks later, no big deal.
lll be paying £779 for the bike, interest free over 12 months.
No fee to ‘extend’ the hire
So that’s it
Pretty good i’d say.
I was involved in our (tiny) firms setup a while ago. As a cyclist wanting the scheme rather than lawyer etc.
Seemed the legislation around hand back is unclear, and that some providers are extremely user friendly (GCI with negligible cost/admin), others extremely profit focussed (Cycle scheme can charge 5%+ at the end, along with screwing the LBS). Few in the middle varied according to legal interpretation.
We decided to go with gci and firm is hoping on doing very little at end of extended hire period.
Seemed the legislation around hand back is unclear, and that some providers are extremely user friendly (GCI with negligible cost/admin), others extremely profit focussed (Cycle scheme can charge 5%+ at the end, along with screwing the LBS). Few in the middle varied according to legal interpretation.
We decided to go with gci and firm is hoping on doing very little at end of extended hire period.
I agree - some schemes are better than others.
I’ve just used GCI which does seem to have the best terms. One of my nephews used cyclescheme a year or so back and was surprised to get a request for £70 (7%) after a year which is paid out of net pay, so effectively a 10%ish addition to the bike price.
Add in that many bike shops add an admin fee as well and you can see how some people (particularly basic rate tax payers) might think it not worth the hassle. Merlin, for example, wants an additional 10% paid outside of the scheme (i.e. from net pay) and my experience was that 6% (either net or gross) was typical.
If it’s your own limited company, I’d say just get your company to buy the bike direct rather than faffing about with cycle to work providers. There is no reason to use a cycle to work scheme in that case.
I’ve just used GCI which does seem to have the best terms. One of my nephews used cyclescheme a year or so back and was surprised to get a request for £70 (7%) after a year which is paid out of net pay, so effectively a 10%ish addition to the bike price.
Add in that many bike shops add an admin fee as well and you can see how some people (particularly basic rate tax payers) might think it not worth the hassle. Merlin, for example, wants an additional 10% paid outside of the scheme (i.e. from net pay) and my experience was that 6% (either net or gross) was typical.
If it’s your own limited company, I’d say just get your company to buy the bike direct rather than faffing about with cycle to work providers. There is no reason to use a cycle to work scheme in that case.
Zigster said:
If it’s your own limited company, I’d say just get your company to buy the bike direct rather than faffing about with cycle to work providers. There is no reason to use a cycle to work scheme in that case.
That was our conclusion for directors too. The little bit less saved was made up for by flexibility and negotiation room with seller.Think that Merlin "admin fee" is against the terms of the scheme (though unlikely to have any action taken...) . The restriction is why many places won't sell sale bikes on c2w, even if offering to cover their costs.
I'm on my second from Evans through my ride to work scheme.
Technically I'm still renting my first one (having finished paying back a smaller amount than the rrp over 12 months) for free for the next five years or so at which point its deemed to have no monetary value at all and mine to do what I see fit with.
The second I've recently bought so still have ten or eleven pre deductions payments to make through my employer. Again over the 12 months I'll have paid back less than the rrp on the bike and it'll be mine in practice if not on paper as is the case with the first.
Evans sadly aren't up to much but there have been no other fees beyond the 12 monthly payments. I suspect I'll never hear from them again about the first one nor the second once its been in for its check up service shortly. It takes them all their time to open the shop when its supposed to be so I can't imagine they'll write to me in four years asking how their bikes are doing!
Technically I'm still renting my first one (having finished paying back a smaller amount than the rrp over 12 months) for free for the next five years or so at which point its deemed to have no monetary value at all and mine to do what I see fit with.
The second I've recently bought so still have ten or eleven pre deductions payments to make through my employer. Again over the 12 months I'll have paid back less than the rrp on the bike and it'll be mine in practice if not on paper as is the case with the first.
Evans sadly aren't up to much but there have been no other fees beyond the 12 monthly payments. I suspect I'll never hear from them again about the first one nor the second once its been in for its check up service shortly. It takes them all their time to open the shop when its supposed to be so I can't imagine they'll write to me in four years asking how their bikes are doing!
Cyclesolutions is my scheme.
After the initial 12m rental/purchase I hire the bike for three more years (I think) at £0 per year then ownership falls to me at no charge.
I was sceptical of the £0 rental but studied the ts and cs and chatted to one of their reps and it seems to be the case.
It's a govt agency that I'm employed by. It's a high, generous cap on the scheme. Something has to make up for the crap pay.
https://www.cyclesolutions.info/how-it-works
After the initial 12m rental/purchase I hire the bike for three more years (I think) at £0 per year then ownership falls to me at no charge.
I was sceptical of the £0 rental but studied the ts and cs and chatted to one of their reps and it seems to be the case.
It's a govt agency that I'm employed by. It's a high, generous cap on the scheme. Something has to make up for the crap pay.
https://www.cyclesolutions.info/how-it-works
Gassing Station | Pedal Powered | Top of Page | What's New | My Stuff