Ride to work scheme, can someone explain please!

I used the cycle to work scheme to get a bike in 2008. I went to the shop, added up a total of £800 and then applied.

Now if I use the evans ride to work calculator and enter £3000 as my monthly salary and £800 as the cost of the bike and bits it says the monthly cost is £39.15.
So in total the lot over the year would be 469.79.

But I remember when my payslip came through the monthly cost was something like £54 meaning the total was £648 which makes the scheme a lot less desiarable.

Anyone know exactly how it all works? I want to get another bike which will cost £1000 so I need to get my head around the figures.

Cheers

ask your LBS

The cost is listed as gross. Your tax drops slightly to bring the actual cost to the £469...

It's a salary sacrifice scheme, so you pay back the full amount you borrow but it's deducted from your salary before tax so in effect you're only paying 75% (or 60% if you're a higher rate taxpayer) of the total.

^

It's a salary sacrifice scheme, so you pay back the full amount you borrow but it's deducted from your salary before tax so in effect you're only paying 75% (or 60% if you're a higher rate taxpayer) of the total.

As Andy says you make the saving on Tax and NI not be deducted from that amount.

Thanks, thats helped and Im pretty sure I've got it now. The voucher will be for £1000 so minus the vat it will be £851, divide that by 12 gives me the monthly salary sacrifice of £70.91. So effectively I am being paid 851 less a year which save me £7 NI and £14 tax.

This all means that I am really paying £49 a month for the lot which is £588! Bingo!

So it really is a big saving then!!!

I think you are charged a % at the end as the bike is owed by your company it might be 10% so factor this in, its still worth doing and if I find a job in a company that has a CTW scheme then I will be buying another bike ;p

Yeah I have read about that but I think my company just didn't bother with it at all. The payments stopped coming out of my pay and I was never asked for any extra money at the end.

It's normally a nominal fee, i.e. £10, but I think it's discretionary.

It's like interest free credit but better, how can it not be good!

^ I got email today about the bike i got last year; basically making a 13th payment but as an after tax deduction not before tax as the rental payments were.

Cycle to Work Scheme
Agreement Number **********

I am writing to advise you that the above agreement for the loan of a bicycle and/or equipment has come to an end.

You were paying for this loan by way of a gross deduction from your salary, the last deduction having been made in this months pay on 24th March 2010.

Under the terms of the agreement you are obliged to return the bicycle and any associated equipment. However, we are now pleased to make the following additional option available to you:

You may acquire ownership of the equipment supplied by paying the sum of £73.40 which is considered to be current fair market value. Unless we hear from you by 30th April then we will assume that you have elected to take this option and will deduct this amount from your April pay, so, you need take no further action.

I can order another bike/parts from today too now :)

Fuuuuuuuu the online calculator. It bears no correlation to what I just signed for my monthly payments.
I still don't understand how the online calculator can quote a 41% saving when I'm actually saving around 20%.
I was expecting to pay £39 pcm but my HR department worked it out as £56 pcm.

This sucks balls.

Wicks you aren't having a good day are you?!

56 is how much of your salary you are sacrificing before tax, so for the sake of maths let's say you earn 1000 a month and pay 20% tax. Before you sacrificed you'd take home 800 (1000 - 20%) after salary sacrifice you rake home 755.2(944 -20%) so you are taking home (in this simplified example) £44.8 less.

Make sense?

Ha, I understand the difference between net and gross L. I didn't think that what I was quoted was my gross sum though.
I'm so misunderstood. ;)

Not sure where you got to with your ride to work scheme, there are a few around now, this calculator might be handy for anyone wanting to play with the numbers.

http://www.evanscycles.com/ride2work/savings-calculator

Not sure where you got to with your ride to work scheme, there are a few around now, this calculator might be handy for anyone wanting to play with the numbers.

http://www.evanscycles.com/ride2work/savings-calculator

Fuuuuuuuu the online calculator. It bears no correlation to what I just signed for my monthly payments.

'This calculator is intended to be used for illustration purposes only.'

Ride to work is Evans, cycle to work is the others, and sadly I have to go with Evans.
As I've learned now, what I was quoted as monthly payments is from my gross salary, not net, so I'm more happy.

Just looking at thread, & wonder;

'Why is there NO cycle to school scheme?

Because the C2W is your employer buying something for you to ostensibly use to travel to and from work, and you're slowly buying the item back off them through your salary, prior to you receiving it. Leave the employer and the outstanding balance is deducted from your last wage packet.

Legal financial responsibility & under 17s?

^Under 17's, responsibility? That's a BIG problem.

...Got drift about C2W now though...

does anyone know of a cycle to work scheme that i can go through, i work for the nhs and am getting confused, as it seems some schemes don't apply to nhs workers?

ta

does anyone know of a cycle to work scheme that i can go through, i work for the nhs and am getting confused, as it seems some schemes don't apply to nhs workers?

ta

You need to go through the scheme used by your trust, mine uses Cyclescheme. Also, because of the way the NHS works you still have to pay VAT on the bike.