Cycle scheme

[rideswithmoobs]

Is it worth it ? Reading all the crap on web I still don't get it. After 12 months the loan is passed for a further 3 years to someone else...... so I pay for 4 years ??????? On a £1000 grand bike it reckons I can save 32%. Worth it or better doing 0% interest with shop. Wedding plus other things this year so not got much spare pennies other than from sale of my Cube.

 

[lejogger]

Is it worth it ? Reading all the crap on web I still don't get it. After 12 months the loan is passed for a further 3 years to someone else...... so I pay for 4 years ??????? On a £1000 grand bike it reckons I can save 32%. Worth it or better doing 0% interest with shop. Wedding plus other things this year so not got much spare pennies other than from sale of my Cube.

The cycle to work scheme in general is very good, but it all depends on which scheme your employer operates.

The reason the loan period is extended is to ensure that when the ownership is transferred to you, it is when the bike has reached an age where the value is nominal. If you were to take ownership of a £1k bike after 12 months the value is £250.

IMO the best schemes do transfer ownership at 12 months but then rather than make you pay the £250, they just give you the bike. They then declare the gift as a benefit in kind on a P11d to the tax man and you end up getting either £50 or £100 knocked off your personal tax allowance for the following year. (Depending on your bracket)
Over the course of a year you don't even notice it.

Either way, if you save 32% (20% income tax and 12% NI contributions) then if you get the £1k bike you want for £680 paid over 12 months then it's a good deal isn't it?

 

[matthat]

I'm now on my 3rd scheme! Next year I plan on doing an accessories only scheme, If it wasn't for the scheme I doubt I would have got into cycling as much as I have over last 5yrs so I personally think it's well worth it.

 

[rideswithmoobs]

My option to join is November for January start so I am thinking of selling my Cube and buying the road bike I prefer because it will come in at over a grand but then plan to use the scheme in January to maybe get accessories and definately a bike box seen as I work abroad and can then take bike with me. Well thats the plan Thanks for the help.

 

[TheJDog]

I think with the second year payment you'll probably end up saving around 15%. I still think this saving, plus the 0% interest makes it worthwhile. Your mileage may vary.

 

[rideswithmoobs]

I am lucky enough to work for a company big on sport (they sponsored the 2012 Olympics and british triathlon) and those I have asked recently say at the end of first year they more or less got the bike/accessories and that was that. Knowing my luck that definately wont happen but it seems a good way to go and lots of positive feedback

 

[Leodis]

I opted for the Cyclescheme at work last year in Jan, got my bike in Feb. Voucher was £1000 and for some strange reason the monthly payments of £78 a month, then after 3 payments I was made redundant and had to pay £740 (I think) out of my final wage plus in March this year had to pay the extended lease of £70, so I ended up paying well over a grand for a bike on the scheme. It’s pretty pointless unless you are on 40% tax rate or you can’t get or don’t want credit imho.


Before the profit makers came into the game everyone saved but since the enforcing of HMRC and cyclescheme taking over all profits have reduced.

 

[lejogger]

I opted for the Cyclescheme at work last year in Jan, got my bike in Feb. Voucher was £1000 and for some strange reason the monthly payments of £78 a month, then after 3 payments I was made redundant and had to pay £740 (I think) out of my final wage plus in March this year had to pay the extended lease of £70, so I ended up paying well over a grand for a bike on the scheme. It’s pretty pointless unless you are on 40% tax rate or you can’t get or don’t want credit imho.


Before the profit makers came into the game everyone saved but since the enforcing of HMRC and cyclescheme taking over all profits have reduced.

I sympathise and am sure there are circumstances which can make the scheme less beneficial than others,


BUT your situation is not typical of most people's experience, so while it's obviously worth advising caution and performing thorough research of what might happen before signing up, the truth is that most people make significant savings either as a 20 or 40% taxpayer.

NB Ive heard very few good things about cyclescheme as a scheme provider. The schemes where your own company purchase the bikes and maintain ownership tend to be far fairer, and much better value

 

[Herr-B]

I've just finished my first one, £904 Ribble cost me -

£60 admin fee
£600 = 12 x £50 (£75 from gross but I only waved goodbye to £50 pcm)
£64 extended use
£724 - Total paid by me (definitely not including clothing/accessories), which is a saving of 19.9%

Add the facts it's essentially interest free, and there's no credit scoring.

Now if we add on the few hundred I've spent on clothing and accessories it's not so great.

Would I do it again, definitely, but I'll wait six months or so first, and I may try to stick to sub-£500. Anyone recommend a good MTB/Hybrid?

 

[lejogger]

Halfords scheme operates like this:

£1000 voucher (£83.33 per month gross but £56.66 per month nett as a 20% taxpayer)

£680 total repaid in year 1

£250 declaration on p11d after free transfer of ownership means £50 extra tax the following year.

Total paid £730.