Cycle to Work Benefit Scheme - Pros and Cons of Different Programmes

Anyone used the CycleSurgery scheme? we've just got it set up at work... how flexible are CS with ordering stuff in that they don't stock?

furious tiles would know.

does he work at CS? cheers, good to know.

not quite - I asked them to order me a PlanetX but they said they can't. Like the look of the boardman but not really what I wanted.

They USED to be dealing with a lot more companies than they do now. wouldnt bother with the boardman as its a heap of crap. go paddy wagon for fixed/SS, or merida/cube/felt for road bikes!

not quite - I asked them to order me a PlanetX but they said they can't. Like the look of the boardman but not really what I wanted.

Planet X and Wiggle used to deal with the Halfords scheme, but no longer do so.
They threw their toys out of the pram after apparently being charged a kickback on each bike of around 10%.
They do their own schemes (Cyclescheme?) - see details on their websites.

Halfords scheme is still quite flexible - I managed to get a Brompton off mine, and colleagues have managed to get Cannondales, Treks, and even a Focus (before Wiggle stopped playing).

I do wish that my employer (a LARGE insurance company) would sign up with the Cyclescheme though. I'd rather the choice of LBS and giving them my trade, than going to Halfords.

Saying that: I will be getting another just as soon as my current deal matures.

They USED to be dealing with a lot more companies than they do now. wouldnt bother with the boardman as its a heap of crap. go paddy wagon for fixed/SS, or merida/cube/felt for road bikes!

I liked the look of the Boardman team carbon- seemed a pretty impressive ride for £1000 - that works out at around £50 per month for me...

I'd stll rather a Planet X though, but can't under the Halfords scheme.

OK guys...another set of questions/issues:
I own my own small business and take a small salary and then dividends based on profits (in other words, I pay my tax mainly as corporation tax and not as income tax)...I've registered my company on the CS scheme and am now thinking of what bike to go for....BUT

...is anyone else in a similar situation with a small business and, if so, have you worked out whether or not the scheme is a real benefit to you?

I own the company, so will be paying full value of the bike (will prob max out on the £1k limit if I can!) via the company.....will I have to put my salary up in order to cover the salary sacrifice???? If I do that, I'll be exposing myself to tax liabilities elsewhere, won't I?

(PS. if this makes no sense, I am certain you are not in the same situation!!!)

;o)

velocipede
You need to earn enough to still be paying tax at basic rate AFTER you have the "salary sacrifice".
Obviously, if you are paying tax at 40% then you will save 40% tax rather than basic rate.
If you are VAT registered then you can reclaim the input VAT as well.
You will also not have to pay ers and ees NIC on the salary sacrificed.

There are 2 other things to consider:

1. could you not get the company to buy the bike, to be made available for its employees for business purposes only? (so no Benefit in Kind). You would reduce the company taxable profits by the full amount of the bike's purchase price, so would be paying less Corp Tax. You wouldn't have to charge anything to the employees for using it for business purposes...
   Obviously it depends on what kind of business and business travel you do!

2. if it's your own business, then you #might# want a monster bike. I've heard of the CS being used for a £6,000 beast! The only restriction is that the company must apply for its own consumer credit licence (@ £75 and probably a bit of form-filling) if it wants to go above the £1,000 standard limit that the CS allows.

3. you have complete flexibility over which scheme to use. I'd err towards the one that allows you to use Planet X or your local bike store, if it were my choice...

I signed up to the scheme during the last tax year. Everybody taking part in our company was worried about the purchase value issue at the end of the year, but it did turn out to be a tenner.

We were also told Halfords would get any bike for you. But once the vouchers were issued and I went to my local store with my order (Focus Cayo) they refused. It wasn't the end of the world because they stocked Condor at the time, but I'm still annoyed about being mis-sold.

I should also mention that dealing with Halfords / Bike Hut (in Putney) to eventually order a Condor, organise a delivery date, call me when it arrived, set it up and call me once it was set up was totally painful. The worst customer service I've ever experienced.

hello... i'm looking for some help as i'm a bit confused about the scheme that everyone keeps telling me i should partake in. how much are people actually saving? I understand the tax benefits etc. but i've had "30% to 50% savings!" bandied about around me, and I don't really understand. does that mean if i buy a bike for £400, i pretty much pay 30-50% off the purchase price, and then buy it back at approx 5% at the end of the scheme? surely not...

i'm pretty bummed out right now as i had both my bikes stolen recently and i don't know if i can be bothered with all the paperwork faffing if there's not a decent saving... i'd rather just head down to the shop and get a newbie there and then!

hello... i'm looking for some help as i'm a bit confused about the scheme that everyone keeps telling me i should partake in. how much are people actually saving? I understand the tax benefits etc. but i've had "30% to 50% savings!" bandied about around me, and I don't really understand. does that mean if i buy a bike for £400, i pretty much pay 30-50% off the purchase price, and then buy it back at approx 5% at the end of the scheme? surely not...

i'm pretty bummed out right now as i had both my bikes stolen recently and i don't know if i can be bothered with all the paperwork faffing if there's not a decent saving... i'd rather just head down to the shop and get a newbie there and then!

I took the max £1000. £47.78 is deducted, pre-tax. Post tax I'm not entirely sure but I think this amounts to roughly £37; so 37x12=444 then add the cost of buying from your employer after the lending period ( 5% ?), say £50. Based on that 50.05% saving!

Also, my employer decided to implement the scheme without going through a third party, which meant that I was given a cheque for a grand and told to come back with a receipt (and a bike, of course) - happy days. I think that this is only possible if you're employer is a 'Ltd' company and is willing to put in the time to ensure things are done to the letter. Although, it didn't seem too taxing......sorry

Now, I've not been involved in the cycle scheme but as an IT lessor we were heavily involved in the very similar home computer scheme, and by similar I mean it works the same way. It's not new, there are other schemes out there including childcare and of course the original pension scheme where the whole matching up of salary sacrifice and a non-taxable benefit was done.

Employers are right to be cautious about the fair value at the end because HMRC have made noises about it in the past, though I think that now enough schemes have come to an end to get away with this. A good point was made earlier about getting HMRC to rubber stamp your scheme, but the rather large downside to this is that it does have to be up and running first and if HMRC don't like it then you have a problem. Actually the employers should not be transferring title to the employees - this isn't allowed no matter what government website links you might have read, its a basic tax law point. You can get around this by having the owner of the cycle (which is probably the cycle scheme) sell the bike directly to the employee for fair value.

However, the risk to employers is not that, and it's not the admin hassle, it's the problem with employees who leave employment during the scheme - or for example get their bike nicked in month one and then refuse to pay. What happens is that the employer gets left holding the baby and all of their savings in NI go down the pan. I've seen this happen a number of times and its why some of the public organisations are balking - refer back to the post at the start of this thread where such an organisation was refusing to do salary sacrifice schemes, I can pretty much guarantee that its because they've had their fingers burnt this way.

However, the risk to employers is not that, and it's not the admin hassle, it's the problem with employees who leave employment during the scheme - or for example get their bike nicked in month one and then refuse to pay. What happens is that the employer gets left holding the baby and all of their savings in NI go down the pan. I've seen this happen a number of times and its why some of the public organisations are balking - refer back to the post at the start of this thread where such an organisation was refusing to do salary sacrifice schemes, I can pretty much guarantee that its because they've had their fingers burnt this way.

My employer offered to insure as part of the scheme- perhaps this should be a compulsory measure to qualify; a year's worth of insurance?

Well the employer could insure, I'm not convinced that it would count as a non-taxable benefit mind if they pass the cost on to you. And insurance still doesn't really cover people who leave the company, take the bike and leave the loan unpaid. In theory it should be offset against any pay owed, in practice it doesn't seem to, and again this is all additional admin.

By the way, you are claiming your free breakfasts aren't you?

Lol, since I can't edit posts yet, I meant don't pass the cost on to you. Since the beneficiary is the employer, that shouldn't be a problem but it would be an additional cost born by the employer, another strike against the scheme, so passing on I think is necessary. I'm a bit rusty on this.

I took £1,000 on Cycle Plus. Got this pair of wheels and a Specialized Tricross Singlespeed...

Nice.

Nice.

Ta. The Spesh was £40 less than the wheels...

nice. white decals, wheels and bartape. would look nicerer with a white saddle to finish it off

nice. white decals, wheels and bartape. would look nicerer with a white saddle to finish it off

It does indeed, but the white one off my Colnago is 150g heavier than that one. I've got a more suitable one on order.

That's a nice little beater Platini.

Arf! to Ed...

It does indeed, but the white one off my Colnago is 150g heavier than that one. I've got a more suitable one on order.

i agonised over swapping a comfy white specialized toupe (150g) to an equally comfy white regal ti at 290g the bling and rivets won in the end. plus it will help me ride just like LeMond, Boonen and McEwen

I'll buy that Toupe if you want...

it got moved onto my fixed so i'm keeping it for the moment.
i will say that i found it comfortable despite it's minimalism but it's very easy to move around on particularly side to side so for 60-100 milers on a geared bike i prefer the firmer and more supportive regal.