Cycle to work scheme

I work for the Department of Work and Pensions, and in their wisdom they are not going to do the cycle to work scheme , as they don't think its cost effective!! and this is a government department

What a load of idiots. How can it not be cost efficient? Unless they are talking about a member of staff administrating the scheme.

That's crap its once every year mate. Trust me, I brought my last audax 2 years ago and have just picked up a new one. Go for it mate.

It would surely depend on the scheme - if it was paid out over three years and you'd spent the limit on your bike you wouldn't be able to replace it until you bought it out at the end of the scheme. On the other hand you can buy two cheap bikes at the same time - the issues are always the limits and the payback periods.

Nope

You sign up for a year. Once the year is over you then pay a small fee (usually 5-10%) to keep the bike for a further 3 years(you pay nothing during this time). After that time the bike is yours.

Once the initial year is over and you've paid all the monthly instalments your then free to buy another bike, regardless of whether you've got a bike in the 3 year lease period still.

Well then we agree - when you've paid the installments. You are assuming that all schemes pay out over a year.

Which they do don't they?

Nope. Though I guess that most of the ones provided by third parties likely do.

i recently got a bike in the cycle to scheme work but in the end its not really worth it apart from the fact its intrest free

Nope

You sign up for a year. Once the year is over you then pay a small fee (usually 5-10%) to keep the bike for a further 3 years(you pay nothing during this time). After that time the bike is yours.

Once the initial year is over and you've paid all the monthly instalments your then free to buy another bike, regardless of whether you've got a bike in the 3 year lease period still.

The chances of HMRC taking a detailed interest are slim, but until you have paid to acquire the bike, and it is your personal property, buying a second bike is risky.

The scheme is designed to put at your disposal a bike, owned by your employer, and used for commuting. The further you stray from this basic tenant, the greater the risk of the scheme, and the tax breaks, falling apart

i recently got a bike in the cycle to scheme work but in the end its not really worth it apart from the fact its intrest free

1 - it is
2 - if you're a higher rate taxpayer, it really is - them that has, gets

I spoke to some people at work and decided not bother calling HR, a friend of mine who earns roughly £30K a year got a bike through the scheme. He pays about £750 for a bike and bits that worth total of about £1000. I am after a bike that is not even half the price and I only work part time with a lower grade than his... No calculation needed - not worth it for me.

HMRC will be more interested in your employer's treatment of the loan arrangement, and go after them for NI contributions / VAT weill in advance of going after the employee for PAYE on a benefit in kind.

Not in my experience. Situations where employees have been innocent parties to the director's "amnesia" are overlooked, but where an employee has benefited, from what HMRC may term in their provocative terminology as deception, then personal tax conseqences will follow.

Do not underestimate the pressure PAYE Compliance Officers, from Inspector level downwards, are under to maximise the return from their control visits.

Just don't sign the 25% final purchase fee.

You can continue the lease for a 7% fee, which you pay at the end of the 12 months. You then use the bike for another 3 years and then the bike is yours. During those 3 years you don't pay anything like you did for the first year.

Make sense?

thing that bothers me slightly is that you don't actually own it until the end of 4 years so if you want to sell it you can't.

Just make sure you get something nice enough that you want to keep for 4 years then. It isn't really that long.

My most recent C2W I'm planning on keeping a long time, very happy with it and can't see myself wanting for another bike for the foreseeable future.

good point.

the annoying thing about the fair market value being 25% after 1 year is that if you have a 32% saving and end up paying 25% of that back then you're only saving 7% of RRP which is less than the 10% cost that some companies pass on to you as the admin fee for them participating in the scheme!

Just don't pay the 25% back after the first year, keep it for another 3 years and It's yours.

Can anyone shed light on a couple of questions I have?

(1) Would it be possible to order a frame only through the scheme or does it require the purchase of a complete bike

(2) Can I top up the vouchers with my own money to get a bike that is above the £1000 limit?

Depends on the retailer. Most independant shops will let you do both.

PM me if you want some names

All depends on the scheme.

If it's an external company like Cyclescheme or similar, then you'll have to order a complete bike, and you're unlikely to be able to top up. If it's run internally, then they'll just hand you a cheque made out for whoever you ask for, and ask for a receipt so they can claim back the VAT. I topped up to get my road bike, and got a receipt that had the bike listed at £1,000 and my "deposit" of £250 listed separately. The vaguer the receipt is, the better.

I'd just speak to the shop direct, most of them are fine with both of what you mentioned, I know both the bikes I've brought they've been happy for me to top up. At the end of the day your voucher is cash to them.

Does anyone know if I could put down a large deposit on the bike? For example paying a £500 deposit on a £1000 bike and paying the remainder of via the monthly repayments.

I asked about that but can't apparently. Sure each shop is different though.

How much of the bike do you have to keep?

Could you for example replace the chainset? frame?

Companies usually have a bit of blurb about the employee needing to maintain the bike, which I would take to mean you should replace parts when worn.

For all intense and purpose it's your bike, just legally owned by the company who you rent from.

Or are you thinking of get one and then saying you don't want it, and giving a more less completely different bike back to the company?

I sold a bike I bought on the scheme before I finished paying for it. No-one cared.