Cyclescheme maths check - tiny saving?

[shouldbworking]

I'm sure this answer is amongst my fine collection of paperwork, and I'm aware that I should know this straight off the top of my head but its been a few months since I looked at the scheme so I thought i'd ask the quick reference minds of PHers first.

I got a bike on cyclescheme, using the full amount ie 1k, so, based off a quick savings calculator I have the saving on income tax of ~200 and ni of ~120. Bike = 680 at that point. Great, but assuming I buy it at 12 months, at 25% value thats 680 + 250 = 930.

I'll grant you, its cheaper than retail and I've spread the cost, which is all I was looking to achieve, but that seems like a pretty small saving. Am I doing it wrong?

[mfmman]

The 25% is a nominal sum so your employer doesn't have to charge you that, they can charge any 'fair amount'.

If they are looking for what you feel is an unrealistic sum, ask them what happened to the VAT

[Rolls]

Same here - final release fee being 30% - better off trying to go to the bike shop if your choice, and putting it on an interest free credit card IMO!

[dave_s13]

My employer (NHS) didn't ask for a penny at the end of my term!

[Rolls]

dave_s13 said:

My employer (NHS) didn't ask for a penny at the end of my term!

Count yourself lucky! When I first did it it was 30 for a £1000 bike...

[anonymous-user]

But if you continue to ride it for 3 years then that 25% drops to 7%, cyclescheme. You can but sale bikes in Evans, then as its interest free and gets under the home accountants radar then it's a great scheme for some ..
Also as a 40% taxparer, that 1k bike is under 600 in the end

[Pints]

Rolls said:

Same here - final release fee being 30% - better off trying to go to the bike shop if your choice, and putting it on an interest free credit card IMO!

Fag packet calcs showed a £40 saving on a £1000 bike, assuming 20% tax rate.

Not much at all.

[wiggy001]

I'm using the scheme but won't be buying the bike in September after a year. Far better to just keep using it and let the residual value drop to practically nothing. Unless you're planning on leaving your employer...

But yes, as a 40% tax payer the savings are far better.

[MocMocaMoc]

Ah you sods.

I've been thinking about a new bike for a while... maybe a little bit carbon'y with some fancy gears.

You've just reminded me that my cycle scheme has come to an end, and I'm probably eligible for a new one...

Wonder if I could manage a fancy carbon thing on the cyclescheme?

[Magic919]

mfmman said:

The 25% is a nominal sum so your employer doesn't have to charge you that, they can charge any 'fair amount'.

If they are looking for what you feel is an unrealistic sum, ask them what happened to the VAT

The Revenue issued specific guidelines on this.

http://www.hmrc.gov.uk/manuals/eimanual/eim21667a....

[Steve vRS]

My understanding was that you keep the bike for 3 years and then make a payment of 7% of the bike's RRP.

Steve

[Bobley]

Cyclescheme demand a 12% discount from the supplier. I saw a Spec Crux in my LBS for £600 (reduced from £1000) and asked about putting it on CTW and he said he'd have to mark it up to £681 to account for the 12% margin. That meant the net saving if I paid it off after 12 months would be £35...

I paid £600 on my debit card and left happy with a decent bike!

So if you see a nice bike in a shop and they'll take cycle 2 work on it but you can be bothered then haggle for 10% straight away!

I've still got to find out if there's a way of getting a Canyon Yellowstone 6.9 29er on the scheme...cracking looking bike

[nammynake]

MocMocaMoc said:

Ah you sods.

I've been thinking about a new bike for a while... maybe a little bit carbon'y with some fancy gears.

You've just reminded me that my cycle scheme has come to an end, and I'm probably eligible for a new one...

Wonder if I could manage a fancy carbon thing on the cyclescheme?

http://m.bikeradar.com/road/news/article/sub-1000-boardman-road-bike-on-the-way-36805/

[mrmr96]

Rolls said:

dave_s13 said:

My employer (NHS) didn't ask for a penny at the end of my term!

Count yourself lucky! When I first did it it was 30 for a £1000 bike...

In the olden days, you could get away with this. But then the tax man realised that companies were selling things to employees too cheaply. There's no way a £1k bike is valueless (or worth peanuts) at the end of 12 mths. So they have to charge you an appropriate ammount, else it would be a taxable benefit.

[anonymous-user]

Evans sale bikes are available on cyclescheme with no markup. Also plenty of decent carbon bikes under 1000 from eg PlanetX and Ribble. They do charge an admin fee though. But a PlanetX carbon for under 600 for me is a bargain

[R.P.M]

I offer the scheme at my Work. One guy is just coming to the end of his annual payments and wants to buy the bike and start the scheme again (giving his current bike to his wife). I think he will have a shock when I tell him he needs to pay around £85-00 to take ownership. The bike was only £500 inc VAT new.
If he does stump up, I assume he's free to run the scheme again with a new bike?

As written above, I'm not sure its worth the hassle for him and me (employer).
I reckon he could just walk in off the street and get a new bike on a 12 month click deal for less overall cost. He's then free to continue to let his current bike depreciate on the company books.

Typical HMRC. When the numbers are crunched there's f@k all in it.

[anonymous-user]

There us a lot if I'll informed guesswork on this thread. If you go to cyclescheme.co.uk website, facts are laid out including calculators . For example the last poster did not know you can get a new bike after 12 months (you can). A bike under 500 is a 5 percent deposit to ride for 3 more years (25). I guess other schemes are not as generous . But there are great savings to be made & it does encourage new riders to commute .

[Johnny]

I had an email from work yesterday to say I had a payment of £90 to make to keep my CX Bike, to be taken from March's salary.

So my £900 bike will have cost me a grand total of:

£552.50

Not too shabby!

[Pints]

Johnny said:

I had an email from work yesterday to say I had a payment of £90 to make to keep my CX Bike, to be taken from March's salary.

So my £900 bike will have cost me a grand total of:

£552.50

Not too shabby!

I believe the C2W scheme has been changed over the past few years. So if you got your bike before the changes, you may well have made a good saving.

[Johnny]

Pints said:

Johnny said:

I had an email from work yesterday to say I had a payment of £90 to make to keep my CX Bike, to be taken from March's salary.

So my £900 bike will have cost me a grand total of:

£552.50

Not too shabby!

I believe the C2W scheme has been changed over the past few years. So if you got your bike before the changes, you may well have made a good saving.

This is the 2012-13 scheme, so don't think there haven been any changes since?