Bike2Work scheme....will I ever own the bike?

[Sloth]

I have a new bike on order, arriving around week 45.
I have the cash to pay for it and fully expected to be doing so....until....
My company are now doing the Bike2Work scheme and I have the option to get it through this.
I think it will save me between 30% - 40% all accounted for and I'd pay it via salary sacrifice or something.
My main concern though is, that I may not ever own the bike or not for years at least. For some reason this does bother me, but providing I can buy the bike fully after a couple of years I would be happy, otherwise not so much.
If I did buy it out though, would I have to pay back any tax benefits previously enjoyed?
I really don'y fully understand this and want to be sure of the details before deciding whether or not to go for it or stick with plan A and just buy it outright.
Anyone done it and is it a good idea?

 

[Sterlo]

My understanding is it's owned by the company and you are basically leasing it from them. At the end of the 2 years, the company can then decide to sell it to you at an agreed price at which point, ownership transfers to you, or they keep it and you still lease it from them. You're not liable for any extra taxes.

 

[vickster]

Schemes vary, what are the terms of yours for your particular job role? Some you own the bike after 12 months but have a final payment (which varies), some you own it with no payment,

Will you actually be using it for commuting, some schemes and employers may have this as a term of the scheme
I have done it in the past, but many years ago (Halfords scheme) and the rules and amounts have changed since.

If buying this way, make sure it's fully insured as you would be liable for payments if it gets stolen or totalled in some way. If you decide you don't like it or want to change, you can't sell either until the scheme has been ended as it isn't yours to sell!
If you leave the business, you'd be liable for any outstanding amount without the benefits. While at the business, the payments are taken from gross income so you save the tax and NI on that amount (which varies on how much you earn), while buying yourself it's out of already taxed income.

Ask HR, they are far best placed to advise for your own personal circumstances and scheme!!

Some retailers may also charge a surcharge of 10% or more on bikes taken on the scheme as that's what they have to pay when redeeming the vouchers.

 

[CanucksTraveller]

I once bought a hybrid for commuting and used the Cycle to Work scheme to finance it (Independent cyle shop as the vendor, and a Government employer). Definitely worth it if it fits your circumstances, I was using mine to ride to work and I had a long employment term left. My terms were that my employer owned the bike until the payments were completed, and my agreement was 1 year, with a monthly salary sacrifice. The length of term is normally agreed between the vendor, employer and employee, with a few options being offered up normally at the time of the agreement, i.e. you choose to salary sacrifice over 1,2 or 3 years. Go shorter if you can. There can be a final payment sum to take ownership, but it's often just the final monthly payment and it's yours. As Vickster says, terms vary according to the vendor and the employer so just talk to them and read the small print, it's usually well explained.

 

[wiggydiggy]

For my latest C2W bike I've just this year paid my 'nominal value' of £50ish to take ownership of it, 4 years after I first got the bike. That works out I paid approx £1050 for the bike so my saving is roughly in the ballpark of £315. That scheme was the longest rental period I've had on the 3 or 4 C2W bikes I've gottten over the years but I understand I can now choose a shorter period.

For me it's not just the saving, but the ability to spread the payments over (again this period varies) upto 24mnths for me now. If I was still in the office (and I may get called back in) I'll be going Electric which I budget upto £2.5k for a decent electric bike. £2500 is approx £105 a month and affordable, and I get the bike immediately.

The only other option for me if I wanted the bike now is an interest free credit loan but the longest I've seen is 6 months and I can't afford to pay it in just 6 payments!

 

[Joffey]

I have a new bike on order, arriving around week 45.
I have the cash to pay for it and fully expected to be doing so....until....
My company are now doing the Bike2Work scheme and I have the option to get it through this.
I think it will save me between 30% - 40% all accounted for and I'd pay it via salary sacrifice or something.
My main concern though is, that I may not ever own the bike or not for years at least. For some reason this does bother me, but providing I can buy the bike fully after a couple of years I would be happy, otherwise not so much.
If I did buy it out though, would I have to pay back any tax benefits previously enjoyed?
I really don'y fully understand this and want to be sure of the details before deciding whether or not to go for it or stick with plan A and just buy it outright.
Anyone done it and is it a good idea?

Done it a few times. It's a no brainer. Go for it.

 

[Deleted member 26715]

The answer to your question is Yes, you will eventually own the bike, but it may take a couple of years to actually do so, looks like I bought mine in 2011 so can't really remember the details

 

[Kingfisher101]

What happens if the company goes bust or the person gets sacked or laid off etc? Some places you dont even get proper notice like with those ferry workers.

 

[Deleted member 26715]

What happens if the company goes bust or the person gets sacked or laid off etc? Some places you dont even get proper notice like with those ferry workers.

Possession is 9/10th of the law

I bought mine via Cyclescheme they appear to have just been rebranded as https://app.workplaceextras.com/home is that another Government department sold off on the quiet?

 

[matticus]

For my latest C2W bike I've just this year paid my 'nominal value' of £50ish to take ownership of it, 4 years after I first got the bike.

This is what SHOULD happen - go read the gov guidance notes if anyone is in doubt - although it shouldn't just be a "nominal value".
The company that owns it should calculate the real value. Then you get first refusal at this price. How they calculate this doesn't seem to be clearly documented, but for bikes at the top end I've seen quite large numbers quoted.

IN PRACTICE a few companies charge the true value, and the taxman never investigates the other companies!

 

[Sloth]

Thanks for the replies.
I’ve spoken to Bike2Work.
According to them I can pay as much back per month (from my gross pay) as I want, providing the balance of my pay doesn’t go below the minimum wage.
Once I’ve paid off the balance of the ‘hire’ balance to my employer, I have to pay 7% to B2W after which the hire is over. However, I won’t own the bike until 4 years in total has elapsed, after which they transfer ownership to me. I can’t sell the bike in the meantime as it’s registered to B2W, unless I pay a further 3-5% or so, to transfer ownership.
These extra payments eat into the total savings but I should still be a few hundred better off vs a simple 10% off a cash sale…providing I don’t bother wanting to ‘own’ it before the 4 years.
I’ll check some other schemes to see how they compare.

 

[Sloth]

At no point did B2W imply my employers would own the bike, only that they (B2W) would have it registered to them? Whatever that means.

 

[Sloth]

Surely if my employers actually pay for the vouchers up front, then they should own the bike, not B2W?
Perhaps I’m missing something?

 

[si_c]

At no point did B2W imply my employers would own the bike, only that they (B2W) would have it registered to them? Whatever that means.

It means that they own it strictly speaking. Practically once the hire period is over the bike is yours, ownership is "transferred" in my experience by sending you an email telling you it's yours, usually some years after you'd forgotten it wasn't already.

I've had used C2W a few times, it's been a seamless process using a few schemes depending on my employer at the time. Definitely worth it from my perspective for the savings.

 

[vickster]

Which scheme does your employer use?