C2W scheme - Am i missing something?
Discussion
Looking to buy myself a cheapish gravel bike and thought it would make sense to stick it through the cycle to work scheme to save the 42% ish tax.
Bike is £1200 which means if i do this over a 12 month term the cost to me is actually £681. But i then see that if i want my employer to transfer ownership to me after said 12 months, i have to pay a 25% fair market value fee?
So i add that £300 FMV to the £681 i've paid and i get £981. So i'm actually saving just over £200? Hardly seems worth it and i'm sure can't be right? Am i missing something here?
Thanks in advance!
Bike is £1200 which means if i do this over a 12 month term the cost to me is actually £681. But i then see that if i want my employer to transfer ownership to me after said 12 months, i have to pay a 25% fair market value fee?
So i add that £300 FMV to the £681 i've paid and i get £981. So i'm actually saving just over £200? Hardly seems worth it and i'm sure can't be right? Am i missing something here?
Thanks in advance!
Check whether your employer will actually charge you anything to transfer ownership. It was a while ago that I got a bike through a C2W scheme with my previous employer and they had no mechanism to make the charge, so I simply paid for the bike over the 12 month period and enjoyed the 40% discount.
wiggy001 said:
Check whether your employer will actually charge you anything to transfer ownership. It was a while ago that I got a bike through a C2W scheme with my previous employer and they had no mechanism to make the charge, so I simply paid for the bike over the 12 month period and enjoyed the 40% discount.
Thank you. i shall ask!Total package price:
£1200
Total cost:
£1200
Income tax saving:
£480
Employee NI saving:
£39
Ownership Fee:
£300
You pay:
£981
Total saving:
£219
Percentage Saving Overall:
18.25%
Monthly pre-tax cost:
£100
Monthly cost to you:
£56.75
https://www.cyclescheme.co.uk/calculator
Jakey123 said:
As already mentioned - Do it over 4 years.
Just to add - In practice stating "you will do it over 4 years" makes no difference. You can make all your repayments over 12 months, get the necessary tax/NI savings and keep the bike at the end of the period. there aren't any additional payments to make (even peppercorn ones).Countdown said:
Jakey123 said:
As already mentioned - Do it over 4 years.
Just to add - In practice stating "you will do it over 4 years" makes no difference. You can make all your repayments over 12 months, get the necessary tax/NI savings and keep the bike at the end of the period. there aren't any additional payments to make (even peppercorn ones).
Has anyone heard anything from their cycle to work provider after getting their bike?
I've never heard anything. I've never been asked to pay the small fee to extend the hire or buy the bike. Speaking to everyone else at my work none have heard anything either.
Some have multiple bikes bought in consecutive years and no questions asked. Never had to pay anything or extend their hires.
The scheme also says the main usage of the bike is cycle to work. Most of the bikes haven't been near work ever. Some of the staff live 50 miles away from work.
The terms, conditions and restrictions don't read that attractive. The scheme isn't run like the terms say.
I've never heard anything. I've never been asked to pay the small fee to extend the hire or buy the bike. Speaking to everyone else at my work none have heard anything either.
Some have multiple bikes bought in consecutive years and no questions asked. Never had to pay anything or extend their hires.
The scheme also says the main usage of the bike is cycle to work. Most of the bikes haven't been near work ever. Some of the staff live 50 miles away from work.
The terms, conditions and restrictions don't read that attractive. The scheme isn't run like the terms say.
rustyuk said:
Countdown said:
Jakey123 said:
As already mentioned - Do it over 4 years.
Just to add - In practice stating "you will do it over 4 years" makes no difference. You can make all your repayments over 12 months, get the necessary tax/NI savings and keep the bike at the end of the period. there aren't any additional payments to make (even peppercorn ones).If you leave before the end of the first year, you have to pay the rest of the balance.
Even if it is as you state, it'll not be the full Tax/NI saving, it'll be pro-rated.
rustyuk said:
Countdown said:
Jakey123 said:
As already mentioned - Do it over 4 years.
Just to add - In practice stating "you will do it over 4 years" makes no difference. You can make all your repayments over 12 months, get the necessary tax/NI savings and keep the bike at the end of the period. there aren't any additional payments to make (even peppercorn ones).If somebody leaves during the initial 12 month period then the outstanding balance on the C2W "loan" gets recovered without the Tax/NI savings. However the savings on the instalments they've already made are theirs to keep.
If somebody leaves after they've made all the repayments then you would need to do Red-Arrows levels of loops on the payroll system to try and recover the tax and NI rebate (effectively you'd have to do a Pay Advance equal to the original C2W loan, recover the full amount of the C2W loan after tax/NI, then do a salary advance recovery).
Our Internal Auditors do payroll audits every 2 years and it's never been picked up as an issue.
My "hire period" is 3 or 4 years, but I paid the entire value on the first month - after all, I could have just bought the bike at RRP and not saved 40-odd%.
Made life easier, too, as I handed in my notice a few weeks later! So that was done and dusted with nothing on-going to worry about.
There's supposed to be £70 "keeping fee" after the 3 or 4 years; not sure that wasn't included in the original deal, not a biggie if I have to pay it eventually. By extending the hire period, it writes down the taxable value of the bike from that chunky lump at the end of the first year.
Mine bought my MTB - the bike I'm least likely to actually ride to work
... in fact, I've electrified an old bike for that job instead 
Made life easier, too, as I handed in my notice a few weeks later! So that was done and dusted with nothing on-going to worry about.
There's supposed to be £70 "keeping fee" after the 3 or 4 years; not sure that wasn't included in the original deal, not a biggie if I have to pay it eventually. By extending the hire period, it writes down the taxable value of the bike from that chunky lump at the end of the first year.
Mine bought my MTB - the bike I'm least likely to actually ride to work
... in fact, I've electrified an old bike for that job instead TheDrownedApe said:
My 12 months payments finished in june. heard nothing from employer on further high period or anything. contacted c2w via email I've used before about "what now" and heard nothing back in 2 attempts.
Which scheme provider?IIRC, my 'rental fee' was included in my final payment. That was via Cyclescheme.
I ordered my voucher a month before first lockdown. Received bike 7 months later. By the time I could ride it to/from the train station, it'd already been fully paid.
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