Cyclescheme - tax free bike

[thegreenhell]

I'm thinking about buying myself a new bike, and a friend pointed me in the direction of www.cyclescheme.co.uk.

Basically it's a government scheme to encourage people to cycle to work by allowing the purchase of a bike completely tax free. Your employer buys the bike for you and claims back the VAT, and then you pay them back directly from your wages before any NI or tax is assessed. According to the calculator on the site I could get a £1000 bike for £570, 43% off! I just need to get my boss to go for it.

Has anyone else used this scheme? Are there any drawbacks?

[AARONM3]

I'd been looking at this myself. There's a handy calculator on www.evanscycles.co.uk as to the amount it'll cost if you haven't seen it already.

Edited to add:

I see there's a calculator on that site anyhow so ignore me!

Edited by AARONM3 on Saturday 11th November 23:43

[AARONM3]

Just had a look at the FAQs on that site and it seems to suggest (after a brief read through) that if you wish to keep the bike at the end of the term you should have to pay your employee an amount to avoid it just being a HP agreement and thus not qualifying for the tax relief...?? This is from the .gov pdf you can download.

In which case I think I'd rather just keep an eye out for a bargain on 05/06 bikes in the usual fashion.

Am I wrong?

EDIT!! (I'm all about the edits tonight- too many beers!)

Seems a fair value of the bike at the end of the 12 months is 5% of the original value so that's not too harsh.

Edited by AARONM3 on Saturday 11th November 23:53

[Parrot of Doom]

www.pistonheads.co.uk/gassing/topic.asp?t=236313&f=23&h=0&hw=

Created a bit of a stir did this...

[thegreenhell]

Parrot of Doom said:

www.pistonheads.co.uk/gassing/topic.asp?t=236313&f=23&h=0&hw=

Created a bit of a stir did this...

Cor blimey, you're not wrong

Without getting into the politics of the idea, I just want to find out if this is a viable way to get a nice shiny new bicycle on the cheap . I want to get one because I want to, not because some dozy politician who's probably never ridden a bike in their life tells me it's a good thing.

[sjg]

It's perfectly viable, as long as your employer is willing to do it.

The likes of Cyclescheme, Booost and the Halfords-run one do all of the work and setting up - all that's involved for the employer is filling in a couple of forms and arranging for the amount to be deducted from your salary. The credit rules were changed a year or so ago so now companies can offer £1000 of bike/accessories without applying for a special credit licence. They aren't required to monitor your use of the bike at all.

I'm still trying to convince my lot to do it. They're quite happy offering the childcare voucher scheme (which works in a very similar way but is even more work for them) but have come up with all sorts of erroneous excuses for not doing this one.

[dans]

my company does it, bloody good idea too - the people who cycle to work are far more alert than those who come in by car or Train. but we also provide some training for cyclists too, I am trying to find a stunt school who can teach people to fall properly if they are in an accident.

[JPJ]

It is definitely worth it due to the massive cost savings involved, as the lump sum at the end is usually something nominal like £50 to complete the terms of the agreement (plus it's really difficult to value a second hand bicycle).

Downsides can be that if you normally get an allowance for commuting then this MAY be taken away from you, as the bicycle will be your expected mode of travel to and from work.

[Nick_F]

My employer supports the childcare vouchers scheme, and other salary sacrifice schemes, but it's 'computer says no' when it comes to this.

Which is a great shame - it would be enough to motivate me to ride to work.

[summers]

I'm interested in this however, i've got a ltd company, so could i buy the bike and lease/hire it back to myself?
or does the company bear the brunt of the tax free discount?