Cycle Scheme - Employer benefits

[SR7492]

Ok, I'm probably going to ask some pretty blonde questions, so apologies in advance.

I've just registered on Cycle Scheme but what benefits are there for the employer?

I know the employees basically receive a 32% off the Bike (no tax/NI) but what's in it for the employer.

I have my own small company and just approved a employee certificate on cycle scheme. The voucher is for the full £1000 (which he will eventually pay £680 minus the tax/NI) but cycle scheme are invoicing me the full £1k - is that right? Or am I missing something.

I guess I/company can claim the tax/NI back to?

Sorry, this is a bit overboard my 2 brain cells.

Thanks in advance.

[jfdi]

The employer also makes an NI saving as the employee is effectively on a lower wage.

[Gizmo!]

There's a good FAQ here: http://www.cyclescheme.co.uk/employers/employer-fa...

As I understand it...
- Remember that as the employer, you own the bike and are hiring it to the employee for the scheme period. So you've paid out £1000 (say).
- The employee agrees to sacrifice some of his pay per month, so you're paying him less. You "get back" let's say £50/month.
- Because you're paying him less, you also pay less Employers NI and suchlike.

And you get a happy, healthy employee (who might smell a bit if you don't have showers).

[SR7492]

Gizmo! said:

There's a good FAQ here: http://www.cyclescheme.co.uk/employers/employer-fa...

As I understand it...
- Remember that as the employer, you own the bike and are hiring it to the employee for the scheme period. So you've paid out £1000 (say).
- The employee agrees to sacrifice some of his pay per month, so you're paying him less. You "get back" let's say £50/month.
- Because you're paying him less, you also pay less Employers NI and suchlike.

And you get a happy, healthy employee (who might smell a bit if you don't have showers).

Thanks Gizmo getting it now.

The employee salary sacrifice is £56.66 after tax/NI (x 12 = £680)

So typicaly he will pay back the £680 in salary deductions. As for the employer, the scheme states that I can typically save 13.8% of the total salary sacrifice (I guess that is off the full £1000 = £138)

So, with the employee sacrificing £680 over 12 months and me saving £138 through employers NI contributions, that still leaves £182 in the red from the total of £1000.

Is this right?

[BMWBen]

SR7492 said:

Thanks Gizmo getting it now.

The employee salary sacrifice is £56.66 after tax/NI (x 12 = £680)

So typicaly he will pay back the £680 in salary deductions. As for the employer, the scheme states that I can typically save 13.8% of the total salary sacrifice (I guess that is off the full £1000 = £138)

So, with the employee sacrificing £680 over 12 months and me saving £138 through employers NI contributions, that still leaves £182 in the red from the total of £1000.

Is this right?

No, he will pay you back £1000 in salary deductions. The impact on his take home pay of that is £680. HTH.

[SR7492]

Thanks.

Can I also claim Capital Allowance whilst the bike is the property of the company, but at a less value each year?

This way, not only do I save on NIC class I but also can claim the tax back as capital allowance?

Correcto?

[Magic919]

Can you claim back the VAT on the bike? I've heard it happens.

[Engineer1]

The other benefit is the employee now has a 12 month loan from the company so you have a stronger hold over them, look into what happens should an employee who is on the scheme chooses to leave.

[Gizmo!]

BMWBen said:

No, he will pay you back £1000 in salary deductions. The impact on his take home pay of that is £680. HTH.

Spot on.

SR7492 said:

Thanks.

Can I also claim Capital Allowance whilst the bike is the property of the company, but at a less value each year?

This way, not only do I save on NIC class I but also can claim the tax back as capital allowance?

Correcto?

Sorry - that's beyond my knowledge