Halfords cycle to work scheme pro's n cons?
Discussion
Evening all,
My employer has decided to offer us minions a halfords cycle to work scheme. Just wondering if some one could enlighten me to the true pro's and con's of the scheme, as the details are rather sketchy ref to what happens at the end of the loan term,
Iv used the search function but have only come across older maybe out of date details.
If it all works as it says on the tin so to speak iv got my eyes on a Vitus xc hard tail of some description,as long as it can be sourced
My employer has decided to offer us minions a halfords cycle to work scheme. Just wondering if some one could enlighten me to the true pro's and con's of the scheme, as the details are rather sketchy ref to what happens at the end of the loan term,
Iv used the search function but have only come across older maybe out of date details.
If it all works as it says on the tin so to speak iv got my eyes on a Vitus xc hard tail of some description,as long as it can be sourced
You get to keep the bike, it used to be a disposal fee and you keep the bike but that was a while ago it may have switched to the percentage of percieved residual value now but either way it's still yours. You're not tied to halfords either fortunately, if you phone the cycle to work scheme people they will source you whatever you want if it can be found within budget I had a specialized allez as our limit was only £500 but dropped lucky as the new model had just come out so they found the previous years at £499.
Hard to work out if it's worth it without knowing what tax rate you pay and any other stuff like childcare vouchers you get, I think generally it only really works out beneficial if you pay the top rate of tax. Seems ridiculous that the people that would benefit most from the scheme (lower earners) get the worst deal.
When I worked it out for me it was going to cost me slightly more to use the scheme than it would by just getting a new bike on interest free credit, or if you're disciplined enough to repay it on time get a sale bike with a 0% credit card deal. The transfer fee at the end has recently been revised and there's a set scheme in place, which can be up to 25% the original price of the bike:
http://www.hmrc.gov.uk/manuals/eimanual/eim21667a....
The main thing for me that put me off was the lack of transparency into how much it would all cost and the fact that the HR dept here didn't really understand how it all worked so I had visions of the repayments all going wrong.
When I worked it out for me it was going to cost me slightly more to use the scheme than it would by just getting a new bike on interest free credit, or if you're disciplined enough to repay it on time get a sale bike with a 0% credit card deal. The transfer fee at the end has recently been revised and there's a set scheme in place, which can be up to 25% the original price of the bike:
http://www.hmrc.gov.uk/manuals/eimanual/eim21667a....
The main thing for me that put me off was the lack of transparency into how much it would all cost and the fact that the HR dept here didn't really understand how it all worked so I had visions of the repayments all going wrong.
lufbramatt said:
Hard to work out if it's worth it without knowing what tax rate you pay and any other stuff like childcare vouchers you get, I think generally it only really works out beneficial if you pay the top rate of tax. Seems ridiculous that the people that would benefit most from the scheme (lower earners) get the worst deal.
When I worked it out for me it was going to cost me slightly more to use the scheme than it would by just getting a new bike on interest free credit, or if you're disciplined enough to repay it on time get a sale bike with a 0% credit card deal. The transfer fee at the end has recently been revised and there's a set scheme in place, which can be up to 25% the original price of the bike:
http://www.hmrc.gov.uk/manuals/eimanual/eim21667a....
The main thing for me that put me off was the lack of transparency into how much it would all cost and the fact that the HR dept here didn't really understand how it all worked so I had visions of the repayments all going wrong.
Not true unless the scheme you are on prevents you from buying bikes that are on sale. Where you have gone wrong is the transfer fee at the end - you don't pay this. There are two options: When I worked it out for me it was going to cost me slightly more to use the scheme than it would by just getting a new bike on interest free credit, or if you're disciplined enough to repay it on time get a sale bike with a 0% credit card deal. The transfer fee at the end has recently been revised and there's a set scheme in place, which can be up to 25% the original price of the bike:
http://www.hmrc.gov.uk/manuals/eimanual/eim21667a....
The main thing for me that put me off was the lack of transparency into how much it would all cost and the fact that the HR dept here didn't really understand how it all worked so I had visions of the repayments all going wrong.
The simple one is that your employer gives you the bike which is judged to be a benefit in kind with the value listed in the table. You pay the tax on this amount. I believe this was the original intention of the new rules.
The complicated one is the one all the big schemes use (as it increases their profits). With this, instead of transferring the bike to you at the end of the first year they transfer it to the cyclescheme operator instead. You then make a one extra payment which goes to the cyclescheme (rather than the tax man) and they lend the bike to you free of charge for another 4 years until it is judged to be valueless, at which point they can transfer ownership to you without you being liable for any extra tax. During this 4 years there is no obligation between you and your employer, you are free to move company without penalty and can start another cycle to work scheme if you wish. The bike is yours in all but name.
lufbramatt said:
Hard to work out if it's worth it without knowing what tax rate you pay and any other stuff like childcare vouchers you get, I think generally it only really works out beneficial if you pay the top rate of tax. Seems ridiculous that the people that would benefit most from the scheme (lower earners) get the worst deal.
I think (based on the last time I looked) that high earners and low earners get the best deal. There was a lower discount for those in the middle band of tax.However the rules have changed completely since I bought mine (2009). Mine ended up costing me about 50% of list, whereas when I lloked again a year or two back, it looked like the biggest discount I'd get would be 25%.
Still worth having, but nowhere near as good as previus.
Evans have a calculator on their site which will tell you how much you'd pay.
Mr Will said:
Not true unless the scheme you are on prevents you from buying bikes that are on sale. Where you have gone wrong is the transfer fee at the end - you don't pay this. There are two options:
The simple one is that your employer gives you the bike which is judged to be a benefit in kind with the value listed in the table. You pay the tax on this amount. I believe this was the original intention of the new rules.
The complicated one is the one all the big schemes use (as it increases their profits). With this, instead of transferring the bike to you at the end of the first year they transfer it to the cyclescheme operator instead. You then make a one extra payment which goes to the cyclescheme (rather than the tax man) and they lend the bike to you free of charge for another 4 years until it is judged to be valueless, at which point they can transfer ownership to you without you being liable for any extra tax. During this 4 years there is no obligation between you and your employer, you are free to move company without penalty and can start another cycle to work scheme if you wish. The bike is yours in all but name.
Fair enough, hence my "lack of transparency" comment! This was how it was explained to me. No-one really seems to understand how it all works well enough for me to commit my hard-earned to it. It all seems needlessly complicated.The simple one is that your employer gives you the bike which is judged to be a benefit in kind with the value listed in the table. You pay the tax on this amount. I believe this was the original intention of the new rules.
The complicated one is the one all the big schemes use (as it increases their profits). With this, instead of transferring the bike to you at the end of the first year they transfer it to the cyclescheme operator instead. You then make a one extra payment which goes to the cyclescheme (rather than the tax man) and they lend the bike to you free of charge for another 4 years until it is judged to be valueless, at which point they can transfer ownership to you without you being liable for any extra tax. During this 4 years there is no obligation between you and your employer, you are free to move company without penalty and can start another cycle to work scheme if you wish. The bike is yours in all but name.
Think I might have to send another email off to HR to clarify what the end of term arrangements would be.
Edited by lufbramatt on Wednesday 14th May 11:57
Kell said:
Evans have a calculator on their site which will tell you how much you'd pay.
According to that a basic rate tax payer ends up with a 32% discount which doesn't sound bad, and it's 42% if you're higher ratehttp://www.evanscycles.com/ride2work/savings-calcu...
lufbramatt said:
Fair enough, hence my "lack of transparency" comment! This was how it was explained to me. No-one really seems to understand how it all works well enough for me to commit my hard-earned to it. It all seems needlessly complicated.
I agree that the loophole version is complicated and wish more companies would take the simple one! It's not in the interest of the scheme operators though.Step by step explanation of the complicated option:
- Employer gives you voucher to buy bike with.
- Employer pays you 1/12th of voucher less for the next 12 months, reducing the amount of tax/ni/etc that you pay.
- After 12 months, Cycle scheme takes ownership of the bike. This is the end obligations between you and your employer.
- Cycle scheme charges you one more payment
- After 4 more years, the bike becomes legally yours.
lufbramatt said:
No-one really seems to understand how it all works well enough for me to commit my hard-earned to it. It all seems needlessly complicated.
My sentiments exactly. I've been umming and ahing for a few months but I can't quite convince myself that the saving is sufficiently good to commit to the scheme. I'm not a higher rate taxpayer (unusually for PH... 
)and I can't quite get away from the suspicion that a 2013 model bike on a 0% credit card might be better for me. Replacing a 1997 GT road bike means the difference between last year's model and this year's isn't really a big deal 
uncinquesei said:
...I can't quite get away from the suspicion that a 2013 model bike on a 0% credit card might be better for me...
Certain retailers will let you buy sale bikes on the scheme. Evans certainly do (when using their own scheme) and I believe that Halfords are the same. Means that you can buy the 2013 model and double up the savings.I agree the benefits are greatly reduced if your particular operator doesn't allow sale bikes though.
when i looked into the company version...
it turned out the bike must be full retail price..no 20% off last years model etc.
.
and the value of the bike would be approx 80% after one year 60% after 2 years etc..
and it was pointed out to me, that if i left the company after a 12 month period i would be required to pay the remaining/ outstanding amount for the bike etc.
make sense i suppose..but something else to think about...
ie if you bought a £1000 bike then was made redundant the last thing you would want to do is pay out for the bike...
.
i think your being very wise asking about downfalls...its easy to see a bargan then only later find out....what bargan....
it turned out the bike must be full retail price..no 20% off last years model etc.
.
and the value of the bike would be approx 80% after one year 60% after 2 years etc..
and it was pointed out to me, that if i left the company after a 12 month period i would be required to pay the remaining/ outstanding amount for the bike etc.
make sense i suppose..but something else to think about...
ie if you bought a £1000 bike then was made redundant the last thing you would want to do is pay out for the bike...
.
i think your being very wise asking about downfalls...its easy to see a bargan then only later find out....what bargan....
PAUL RUN said:
when i looked into the company version...
it turned out the bike must be full retail price..no 20% off last years model etc on our particular scheme.
.
and the value of the bike would be approx80%25% after one year 60%17% after 2 years etc..
and it was pointed out to me, that if i left the companyafterbefore a 12 month period i would be required to pay the remaining/ outstanding amount for the bike etc.
make sense i suppose..but something else to think about...
ie if you bought a £1000 bike then was made redundant the last thing you would want to do is pay out for the bike...
.
i think your being very wise asking about downfalls...its easy to see a bargan then only later find out....what bargan....
FTFY it turned out the bike must be full retail price..no 20% off last years model etc on our particular scheme.
.
and the value of the bike would be approx
and it was pointed out to me, that if i left the company
make sense i suppose..but something else to think about...
ie if you bought a £1000 bike then was made redundant the last thing you would want to do is pay out for the bike...
.
i think your being very wise asking about downfalls...its easy to see a bargan then only later find out....what bargan....
Just been through it, went to LBS picked bike, they gave me a total figure.
Went into work, filled out form with total at the bottom.
Waited a couple of weeks for bike scheme to get its act together.
Got voucher from work, took to LBS and swapped for said bike, lights etc.
Each month for 12 months 1/12 of the total was taken off my pay before tax, giving me discount on top of discount got from LBS.
After 12 months I paid £12 to keep the biker for life, although technically it is rented from cycle scheme for next 3 years. In 3 years time I sign a form to say I will keep it, or pay them to take it away :roll eyes:
All pretty simple and straightforward. Quite fancy a mountain bike now
Went into work, filled out form with total at the bottom.
Waited a couple of weeks for bike scheme to get its act together.
Got voucher from work, took to LBS and swapped for said bike, lights etc.
Each month for 12 months 1/12 of the total was taken off my pay before tax, giving me discount on top of discount got from LBS.
After 12 months I paid £12 to keep the biker for life, although technically it is rented from cycle scheme for next 3 years. In 3 years time I sign a form to say I will keep it, or pay them to take it away :roll eyes:
All pretty simple and straightforward. Quite fancy a mountain bike now
Just got a Boardman CX Comp from halfords.
I considered the C2W scheme, but with various discounts about (halfords vouchers at 10% off, plus British cycling discount, plus their usual sales) you can get a decent % off RRP easily.
ie my Boardman CX Comp is £599 on Halfords site. I managed to get it for £430. Thats 28% off RRP :-)
I preferred this route rather than C2W scheme where I had to make final payment at the end.
I considered the C2W scheme, but with various discounts about (halfords vouchers at 10% off, plus British cycling discount, plus their usual sales) you can get a decent % off RRP easily.
ie my Boardman CX Comp is £599 on Halfords site. I managed to get it for £430. Thats 28% off RRP :-)
I preferred this route rather than C2W scheme where I had to make final payment at the end.
mie1972 said:
Just got a Boardman CX Comp from halfords.
I considered the C2W scheme, but with various discounts about (halfords vouchers at 10% off, plus British cycling discount, plus their usual sales) you can get a decent % off RRP easily.
ie my Boardman CX Comp is £599 on Halfords site. I managed to get it for £430. Thats 28% off RRP :-)
I preferred this route rather than C2W scheme where I had to make final payment at the end.
None of that would rule you out of their cycle to work scheme. You could have got it for ~£23 net per month that way so it would have only ended up costing you ~£280 all in. That's 53% off RRP :-)I considered the C2W scheme, but with various discounts about (halfords vouchers at 10% off, plus British cycling discount, plus their usual sales) you can get a decent % off RRP easily.
ie my Boardman CX Comp is £599 on Halfords site. I managed to get it for £430. Thats 28% off RRP :-)
I preferred this route rather than C2W scheme where I had to make final payment at the end.
DAmiJO said:
Evening all,
My employer has decided to offer us minions a halfords cycle to work scheme. Just wondering if some one could enlighten me to the true pro's and con's of the scheme, as the details are rather sketchy ref to what happens at the end of the loan term,
Iv used the search function but have only come across older maybe out of date details.
If it all works as it says on the tin so to speak iv got my eyes on a Vitus xc hard tail of some description,as long as it can be sourced
pros My employer has decided to offer us minions a halfords cycle to work scheme. Just wondering if some one could enlighten me to the true pro's and con's of the scheme, as the details are rather sketchy ref to what happens at the end of the loan term,
Iv used the search function but have only come across older maybe out of date details.
If it all works as it says on the tin so to speak iv got my eyes on a Vitus xc hard tail of some description,as long as it can be sourced
cost/ tax/. ni efficient way of getting a bike
cons
not quite as cost effective as it was now HMRC don;t allow the near write off end of scheme purchases prices
in the case of the halfords scheme - it's halfords so there's the issues of dealing with halfords halfwits if you have a bad branch and the risk that people end up with overpriced tat ...
Although it's a halfords run scheme, you can use the vouchers at quite a few independent bike shops around the country, there are 4 or 5 local to me with good reputations and an array of brands.
Only down side iv come across is I can't get one from chainreactioncycles.com .i was after a Vitus
Only down side iv come across is I can't get one from chainreactioncycles.com .i was after a Vitus
mph1977 said:
........
cons
in the case of the halfords scheme - it's halfords so there's the issues of dealing with halfords halfwits if you have a bad branch and the risk that people end up with overpriced tat ...
Halfords poor service is an internet myth, probably perpetuated by more expensive outlets!cons
in the case of the halfords scheme - it's halfords so there's the issues of dealing with halfords halfwits if you have a bad branch and the risk that people end up with overpriced tat ...
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