C2W A bit perplexed

[Chris-H]

My new employer has told me he's joining the cycle to work scheme which to start off rather made my day......until i looked further into it.
So for example i done a calculation based on a £1000 bike and £200 of accesories would leave me paying over £60 a month,and it turns out i'll only be renting the bike as after the year is up i'll either have to pay my boss or the c2w the current market value to actually buy and keep the bike............................is that right???? If so i'll get a bank loan with cheaper payment terms and the bike will be mine from day one.
Oh and the above figures were an example.

 

[Keenbfb]

Cash is taken out of your wages before tax so you save there also it's the tax on the current market value minus deprecation you're left paying, I paid £18 for £500's worth of bike.

 

[Chris-H]

Cash is taken out of your wages before tax so you save there also it's the tax on the current market value minus deprecation you're left paying, I paid £18 for £500's worth of bike.

Wow,ok i'm sold
Ithought it did'nt seem quite right,i knew about the payments being from gross and the bike etc being tax free but thought a decent quality bike would still be worth hundreds in a years time so would cost that to buy it,did'ne see it was the tax i'd be paying,cheers for that mate much appreciated

 

[Rykard]

check the final 'fair value' payment value - this changed from a nominal 3-5% to something like 25% or 40%....

 

[IanSmithCSE]

Good morning

The HMRCs opinion of fair value is about half way down this page.

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

Although nobody seems to take this bit seriously; To be eligible for the scheme the employer must not guarantee that you can buy the bike at the end of scheme. So in theory at least you may have to give the bike and clothing back at the end of the hire period!

http://www.hmrc.gov.uk/manuals/eimanual/EIM21667.htm

Bye

Ian

 

[biggs682]

we had meeting at our work last week , and the way it seems to me at end of 1st year you are better off paying a 1 of fee and carry on using bike for another 3 years rather that the higher % age and owning bike after 1 year .

all very confusing

 

[Chris-H]

Its a lot of money each month and so confusing,after a bit of consideration i'm not going to join it.£60 a month to rent a bike? No thanks.

 

[fossyant]

You'd get a better deal from a bike shop with 0% finance these days !

 

[Chris-H]

You'd get a better deal from a bike shop with 0% finance these days !

Exactly what i'm thinking mate.

 

[fossyant]

Shame really. The HMRC has buggered it up. I did the scheme and just finished before the new rules. Saves a couple of hundred, but also lost out on cycle mileage claims - it's about £140 a year for me - reminds me, I need to put the last 12 months claim in soon !

 

[SatNavSaysStraightOn]

My old work place did not charge me for the bike. My husband's old work place charged him a single month's additional deduction for the bike (so 13 months instead of 12). My work was a registered charity (a boarding school), so I did not save as much as hoped/expected. His work made him redundant within the same tax year that the C2W scheme ended, so he lost out there and had to pay additional tax afterwards which given we were out of the country and didn't get the paperwork acquired additional charges...
Now - we have turned down the option with my husband's new work and just bought his new bike outright. there are cheaper ways to deal with it, in my opinion.
It sounds good, it looks good but...

 

[biggs682]

Its a lot of money each month and so confusing,after a bit of consideration i'm not going to join it.£60 a month to rent a bike? No thanks.

my thoughts too , but others go for it

 

[Jdratcliffe]

I Prefer the 12 mnths 0% finance on bikes plus if i get a bonus i pay it off early

 

[Chris-H]

I cant really see any incentive in it now tbh

 

[BSRU]

I cant really see any incentive in it now tbh

Works great for me, especially as it is easier to convince my better half, who would be upset if I took out a loan to buy a £1000 bike, even if it that loan was 0% interest.