Bike 2 Work schemes
Discussion
Hi,
Has anyone set one of these up?
I work for a very small company so I doubt I'll be able to sell the idea to my boss if it involves any significant cost or effort to them, but I wondered what the routine was.
As I understand it the employer buys the bike (which for someone who set a $10 a day food expenses limit on a recent American trip looks optimistic...) and you then pay off the tax-free cost of the bike over a period of installments as a sort of hire scheme. At the end of it they're obliged to sell you the bike for a nominal fee of 5% retail value?
So, two questions: Is there any way to avoid the employer having to put the money forward up front? And secondly, what's actually involved in setting it up? Could I could the whole thing myself and then just pester my boss to sign on the dotted line somewhere?
Finally, are there any drawbacks to it and are you limited to where you can purchase the bike?
[Excuse the garbled post, but I'm sure you get the jist...]
Has anyone set one of these up?
I work for a very small company so I doubt I'll be able to sell the idea to my boss if it involves any significant cost or effort to them, but I wondered what the routine was.
As I understand it the employer buys the bike (which for someone who set a $10 a day food expenses limit on a recent American trip looks optimistic...) and you then pay off the tax-free cost of the bike over a period of installments as a sort of hire scheme. At the end of it they're obliged to sell you the bike for a nominal fee of 5% retail value?
So, two questions: Is there any way to avoid the employer having to put the money forward up front? And secondly, what's actually involved in setting it up? Could I could the whole thing myself and then just pester my boss to sign on the dotted line somewhere?
Finally, are there any drawbacks to it and are you limited to where you can purchase the bike?
[Excuse the garbled post, but I'm sure you get the jist...]
There's admin involved.
As the bike remains the property of the company until final repayment is made then you 'puttin up' the cash is risky - no matter how good you relationship is with the company.
There's plenty of info on STW and here about the various schemes. A forum search should reveal all.
As the bike remains the property of the company until final repayment is made then you 'puttin up' the cash is risky - no matter how good you relationship is with the company.
There's plenty of info on STW and here about the various schemes. A forum search should reveal all.
The employer doesn't put the money up front, per se. They get invoiced by Halfords, after Halfords have issued the vouchers to the employees. So there is a month or so before the employer shells out for the bikes, duing which time the employees (and company for lower employer NI payments) are already getting the benefit.
mk1fan said:
There's admin involved.
A lot?I'm happy to organise things, but I can't see my boss going for it if she has to lift a finger more than once. Something where I can get a single signature and do the rest myself should be possible though.
Of course the other question is whether or not I actually want to cycle to work! It's only 6.5 miles but there are some fairly serious hills, large-ish roundabouts and London traffic to negotiate in that space. I can see my life expectancy going down quicker than my fuel savings go up!
Muzzlehatch said:
The employer doesn't put the money up front, per se. They get invoiced by Halfords, after Halfords have issued the vouchers to the employees. So there is a month or so before the employer shells out for the bikes, duing which time the employees (and company for lower employer NI payments) are already getting the benefit.
I don't think you got the jist of the reply.The bike remains an asset of the company until final payment is made by the employee - regardless of the specifics of the invoicing arrangements to purchase the bike from the shop / supplier.
Therefore if the OP - as intimated - pays monies up front to the company to cover the expense then the company gains a benefit. Accounting issues aside, the company could choose not to pass ownership of the asset to the employee - say if they are fired - and if the employee doesn't return the asset then it is theft.
This is of course only one possible out come. Personally, I wouldn't consider paying my firm the money to cover the costs.
Edited by mk1fan on Monday 16th March 13:17
mk1fan said:
The bike remains an asset of the company until final payment is made by the employee - regardless of the specifics of the invoicing arrangements to purchase the bike from the shop / supplier.
Therefore if the OP - as intimated - pays monies up front to the company to cover the expense then the company gains a benefit.
The employee doesn't pay cash directly to the company; it's deducted from the gross salary. So the employee benefits, saving 40% or 50% on the cost of a new bike, with effectively a 12 month interest free loan. This is the whole point - to benefit both parties so that there in an incentive to maintain a good relationship (and to save the polar bears, natch).Therefore if the OP - as intimated - pays monies up front to the company to cover the expense then the company gains a benefit.
mk1fan said:
Accounting issues aside, the company could choose not to pass ownership of the asset to the employee - say if they are fired - and if the employee doesn't return the asset then it is theft.
Of course, and that's fair. If the employee leaves, why should the company continue to give them a benefit? The employer has paid money for an asset for the benefit of an employee. I can't see a problem with this.mk1fan said:
This is of course only one possible out come. Personally, I wouldn't consider paying my firm the money to cover the costs.
I don't really understand wht you mean by "paying my firm the money to cover the costs". You're not required to cover any costs, except for the heavily discounted bike itself. You don't need to pay for the admin time/costs, so unless you expect to no longer be with the company in 12 months time, it's a great opportunity for many.In terms of setting it up, the admin is a few hours work, comprising some form-filling and updating the payroll. Not a great amount of labour, but probably best done for all employees in one go, rather than in dribs and drabs throughout the year.
If you actually read the first post then you would see that OP intimated that they are thinking of paying their Employer all the money for the bike in advance of the bike being bought. Rather than making a salary sacrifice to re-pay the purchase price. I assume to try and avoid the original purchase cost burden to the company - regardless of the invoicing delay. This would a stupid thing to try and do. For both parties.
My comment should have read 'paying my firm the money up-front to cover the cost'. Cost being the purchase price of the bike. I can see the confusion, especially when you don't read posts properly
I agree with your last paragraph.
My comment should have read 'paying my firm the money up-front to cover the cost'. Cost being the purchase price of the bike. I can see the confusion, especially when you don't read posts properly
I agree with your last paragraph.
h of a commute and the collots weren't the highest of fashion.Didn't mean to start an argument. 
You're quite right though - I wondered if it was possible to give my employer all the money up front to save them complaining that it meant shelling out x-hundred pounds of company money for me to ride a bike.
Is it possible to purchase the bike from any shop? I thought it was only Halfords and a handful of others? Certainly a mate who's looked into the scheme found that his company only offered Halfords-sourced bikes. They had someone paid to manage the scheme though.
You're quite right though - I wondered if it was possible to give my employer all the money up front to save them complaining that it meant shelling out x-hundred pounds of company money for me to ride a bike.
Is it possible to purchase the bike from any shop? I thought it was only Halfords and a handful of others? Certainly a mate who's looked into the scheme found that his company only offered Halfords-sourced bikes. They had someone paid to manage the scheme though.
Chris71 said:
Is it possible to purchase the bike from any shop? I thought it was only Halfords and a handful of others? Certainly a mate who's looked into the scheme found that his company only offered Halfords-sourced bikes. They had someone paid to manage the scheme though.
AIUI, there are basically 2 schemes:"Cycle to Work" is a scheme run by Halfords, but you can ask them to source any bike (at RRP), plus it works at Bikehut so you can get better kit such as Kona and Boardman rather than the welded cheese Carrera bikes.
"Bike to Work" is slightly different, but I believe enables you to choose any participating retailer (e.g. Wiggle, Planet X, LBS, etc), so you can get pretty much any bike you want, including their discounted prices.
Which option you choose probably depends on the number of staff taking up the scheme. E.G. If it's just one employee then BTW might be better, but for a bigger firm, it makes sense to give a wider choice from a larger retailer for the varying tastes and budgets of the employed workforce.
Did I answer the right question?
Muzzlehatch said:
Chris71 said:
Is it possible to purchase the bike from any shop? I thought it was only Halfords and a handful of others? Certainly a mate who's looked into the scheme found that his company only offered Halfords-sourced bikes. They had someone paid to manage the scheme though.
AIUI, there are basically 2 schemes:"Cycle to Work" is a scheme run by Halfords, but you can ask them to source any bike (at RRP), plus it works at Bikehut so you can get better kit such as Kona and Boardman rather than the welded cheese Carrera bikes.
"Bike to Work" is slightly different, but I believe enables you to choose any participating retailer (e.g. Wiggle, Planet X, LBS, etc), so you can get pretty much any bike you want, including their discounted prices.
Which option you choose probably depends on the number of staff taking up the scheme. E.G. If it's just one employee then BTW might be better, but for a bigger firm, it makes sense to give a wider choice from a larger retailer for the varying tastes and budgets of the employed workforce.
Did I answer the right question?
With regards to numbers - it'll be two of us!
ETA: Fortunately the other bloke is the owner's husband and he seems keen, so looks like I've got the blessing to go ahead. So you reckon Bike to Work might be the best bet?
Edited by Chris71 on Tuesday 17th March 10:20
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