New bike on Cyclescheme - Limited Budget
Discussion
New job means I have the opportunity to access Cyclescheme and get a new bike. I already have a GT Avalanche 0.5 which I got a few years ago so I am looking for something full suspension now (for the really, bumpy ride to work)
I am a big guy. 6.3 and about 18 stone so need something that can take a fair pounding. Does anyone have any suggestions within the £1000 limit of the scheme?
Or does anyone know if its possible to spend more on a bike than the scheme limit somehow?
Cheers
I am a big guy. 6.3 and about 18 stone so need something that can take a fair pounding. Does anyone have any suggestions within the £1000 limit of the scheme?
Or does anyone know if its possible to spend more on a bike than the scheme limit somehow?
Cheers
Sorry to hijack your thread slightly, but have you looked into the cost viability of this. I am struggling to see how you really benefit.
Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
oh well, bang goes that idea!PurpleMoonlight said:
Sorry to hijack your thread slightly, but have you looked into the cost viability of this. I am struggling to see how you really benefit.
Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
Sorry, not true. You have to pay tax on the fair value of the bike at the end of the rental period. It used to be that HMRC overlooked this, or rather did not specify 'fair value' and you paid a small fee to your employers (like £20) for the transfer of the bike into your name, but they closed the loophole fairly quickly by spelling out what was to be charged.Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
However doing the sums at the end of my rental period, I figured I could have got the same sort of deal negotiating in a bike shop. The key advantage I suppose is the effective Interest free loan to buy it in the first place.
Zebrs said:
PurpleMoonlight said:
Sorry to hijack your thread slightly, but have you looked into the cost viability of this. I am struggling to see how you really benefit.
Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
Sorry, not true. You have to pay tax on the fair value of the bike at the end of the rental period. It used to be that HMRC overlooked this, or rather did not specify 'fair value' and you paid a small fee to your employers (like £20) for the transfer of the bike into your name, but they closed the loophole fairly quickly by spelling out what was to be charged.Say a bike worth £1000 retail.
It will cost you roughly £600 reduction in net pay.
However, you dont own the bike at the end of the year, and have to buy that from your employer for full market value.
So what would a 12 month old £1000 bike be worth? £500?
If so, you have paid £1100 for a £1000 bike.
Am I missing something here??????
However doing the sums at the end of my rental period, I figured I could have got the same sort of deal negotiating in a bike shop. The key advantage I suppose is the effective Interest free loan to buy it in the first place.
cyclescheme.co.uk, £1000 bike is about £480 to a 40% taxpayer, interest free over 12 months. Then a 7% deposit, ride the bike for 3 years & they sign it over to you. Examples can be seen on their website. £1000 bike for £550ish is a good deal IMHO
A lot of internet bike shops are in the scheme, usually far cheaper than high street shops & some also offer their sale bikes on the scheme (eg last years colour at 33% off!) so not tied to inflated high street/LBS RRP
PurpleMoonlight said:
The info I have read online states fair value is now the price you would have to pay for the used bike at a cycle retailer.
Think there's some truth in both of these viewpoints on further investigation. As I said, this was certainly the deal when I came to the end of my rental.However reading here: http://www.hmrc.gov.uk/manuals/eimanual/EIM21667a.... gives that employers can actually decide if they a) sell to you at full market value or b) nominal value and you declare the balance as benefit in kind therefore taxable. Depends how good your employers are really and if they will try to reduce your liability.
Personally I reckon it's a waste of time - get a 0% credit card, wait for a sale period and negotiate hard on a last year model.
okgo said:
It's not a waste of time at all. It takes minutes and saves you £500~
Saving depends on your income and tax rate. For 20% payer, net salary sacrifice on a £1k bike is £47.22, or £566.64. Add the 250 quid final value from the link above after one year and I fail to see the real advantage at over 800 quid cost to you. It's not that much better if you are higher rate payer as the tax saving is offset by NI saving. okgo said:
Nobody pays that final value. They pay 7% and extend the lease for 3 years. You can do another scheme or even change jobs after the first 12 months. No brainer.
Down to the individual company as to whether they let you extend or not. Lots of ifs buts and maybes as to whether you end up with a good deal at the end and there's nothing stopping HMRC 'revising' their opinion of fair value during the term either. Still reckon you're better off with a friendly smile in your LBS personally, but we can agree to disagree. All schemes are different so it's worth checking with your employer and reading the T&C's.
My old employer had their scheme through Evans so I bought a hardtail. Ok so Evans aren't the best but they stock a shed load of decent bikes that can be setup by your LBS if you're that bothered about it.
My employer stretched the plan to 18 months instead of 12 and the final payment was 4.5% of the voucher. Contrary to how other schemes work, Evans will let you buy discounted/sale bikes and will also let you spend as much as you want, so long as you pay any extra on the day. So it's perfectly ok to buy a £2000 bike with a £1000 voucher providing you can stump up the other £1000.
For me I still saved a packet so was well worth it.
My old employer had their scheme through Evans so I bought a hardtail. Ok so Evans aren't the best but they stock a shed load of decent bikes that can be setup by your LBS if you're that bothered about it.
My employer stretched the plan to 18 months instead of 12 and the final payment was 4.5% of the voucher. Contrary to how other schemes work, Evans will let you buy discounted/sale bikes and will also let you spend as much as you want, so long as you pay any extra on the day. So it's perfectly ok to buy a £2000 bike with a £1000 voucher providing you can stump up the other £1000.
For me I still saved a packet so was well worth it.
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