Cycle to work scheme advice

[Cubist]

Our scheme has just started.

My employer has determined to ensure the greatest tax break to the employee. They have undertaken to GIVE the bike to the employee at the end of the hire period. That is seen by HMRC as a taxable benefit, so I will have to pay tax on the residual market value of the bike, determined to be 25% of the purchase price on a bike over £500.

Therefore if I buy a £1000 bike, I will pay £580 over 12 months (I am a 40% taxpayer and will save 2% NI) then pay a tax of 40% of the residual £250, (£100) My total outlay will therefore be £680 for a £1000 bike, a saving of £320, plus the benefit of monthly instalments.


My scheme is managed by Halfords, but they have a list of approved suppliers from whom they can order brands they don't stock .(with limitations, for example they can't order stuff like Ribble) You then deal with them and take your letter of collection to them. Halfords will therefore order a Cube for me from say Leisurelakes or wherever the nearest participating dealer is, and I collect a bike from them, thus avoiding the dreaded Halfords build service.

 

[2Loose]

Nice scheme Cubist!

Stuck with cyclescam here, but the benefits are still tangible, but not quite as great as yourself, despite an employer that will retain ownership and play the taxable benefit in kind, rather than require the full 25% of retail going to *spit* them.

EDIT: Can't really complain though, still saving more than a couple of hundred quid. :-)

 

[Alexvs]

To the best of my knowledge (and I've campaigned for, set up, and run our scheme for 2 years) the Halfords scheme is in-house, nothing to do with P&MM. They provide the online sign-up system and promotional material, but then bow out once your employers pay for the cycles leaving the organisation to manage the salary sacrifice and final payment at their discretion.
It may be that P&MM are used as a company to manage the salary sacrifice if finance is taken out rather than your employer paying for the cycles up front. Obviously if your employer does borrow the money to purchase the equipment less of the savings will be passed on in order to fund the interest charges.

A small point as well, although you do only purchase bike through Halfords on the C2W scheme, you're not restricted to Halfords own instore brands, you can use the special order line where they are able to source most brands.

Sorry yeah didn't mean it to come across as P&MM own and run it, probably could've worded better as run I more meant promote, bad choice of words clearly

thanks for clearing that up. I think I'll stick to reading the forum a bit longer before putting in my 2p lol

 

[chris-s]

Our scheme has just started.

My employer has determined to ensure the greatest tax break to the employee. They have undertaken to GIVE the bike to the employee at the end of the hire period. That is seen by HMRC as a taxable benefit, so I will have to pay tax on the residual market value of the bike, determined to be 25% of the purchase price on a bike over £500.

We persuaded our FD to do the same for us. I guess this approach is only likely to work where the scheme has been implemented in-house though.


Chris

 

[lejogger]

Sorry yeah didn't mean it to come across as P&MM own and run it, probably could've worded better as run I more meant promote, bad choice of words clearly

thanks for clearing that up. I think I'll stick to reading the forum a bit longer before putting in my 2p lol

No need to apologise! The whole point of these forums is for everyone to put in their 2p in an attempt to come up with an informed overall response for the OP and those with an interest in the thread.
(Nearly) Everyone's 2p is as relevant as anyone else's

 

[lejogger]

We persuaded our FD to do the same for us. I guess this approach is only likely to work where the scheme has been implemented in-house though.

It doesn't matter who implements the scheme. What is important is that the ownership of the cycles remains with the employer not the third party, so they have complete control of how the transfer of ownership is managed.

 

[Downward]

I currently lease a cycle via Cyclescheme which I used only for commuting to work a few times in February, May, June. I have not claimed excess miles for this cycle as per Cyclescheme/trust rules as I don’t own the bike. Also as I have used this bike only for commuting this qualifies for the 50% or more usage of cycle for commuting

I do and have however claimed expenses for the Bike that I own as per the Policy on Expenses.


I have had a letter from Payroll/Expenses though saying I owe £X amount which will be deducted from My Salary next month.

Now I am arguing the toss !

 

[2Loose]

I take it that your Payroll is asking for your mileage allowance back, rather than a final payment on the bike?
In which case, argue hard! I have ordered another bike for my new, longer, winter commute but do intend to use the current road bike when the salt has been and gone. I intend to claim mileage when I do use that one, so I'll be interested to hear how they defend their actions re. Contract.

 

[wiggydiggy]

Our scheme has just started.

My employer has determined to ensure the greatest tax break to the employee. They have undertaken to GIVE the bike to the employee at the end of the hire period. That is seen by HMRC as a taxable benefit, so I will have to pay tax on the residual market value of the bike, determined to be 25% of the purchase price on a bike over £500.

Therefore if I buy a £1000 bike, I will pay £580 over 12 months (I am a 40% taxpayer and will save 2% NI) then pay a tax of 40% of the residual £250, (£100) My total outlay will therefore be £680 for a £1000 bike, a saving of £320, plus the benefit of monthly instalments.


My scheme is managed by Halfords, but they have a list of approved suppliers from whom they can order brands they don't stock .(with limitations, for example they can't order stuff like Ribble) You then deal with them and take your letter of collection to them. Halfords will therefore order a Cube for me from say Leisurelakes or wherever the nearest participating dealer is, and I collect a bike from them, thus avoiding the dreaded Halfords build service.

Hmm you don't work for a certain financial institution as I do because you've just described my scheme to the fine detail.

I'm a big fan of C2W, it got me back into cycling at a time where I could not afford a reasonable machine and I've just gone for a 'mid range' machine to get more miles under my bum next year.

Yes it has to be run right by your employer, but that is on them and us to a certain extent to ensure that the employers do it right.

I think we'd be poorer for not havng at least the chance to do this?

 

[Downward]

I take it that your Payroll is asking for your mileage allowance back, rather than a final payment on the bike?
In which case, argue hard! I have ordered another bike for my new, longer, winter commute but do intend to use the current road bike when the salt has been and gone. I intend to claim mileage when I do use that one, so I'll be interested to hear how they defend their actions re. Contract.

Yes the last 2 months. I have claims forms going back to February where I have only claimed the odd time when I used the bike I own.

 

[SquareDaff]

Our scheme has just started.

My employer has determined to ensure the greatest tax break to the employee. They have undertaken to GIVE the bike to the employee at the end of the hire period. That is seen by HMRC as a taxable benefit, so I will have to pay tax on the residual market value of the bike, determined to be 25% of the purchase price on a bike over £500.

Therefore if I buy a £1000 bike, I will pay £580 over 12 months (I am a 40% taxpayer and will save 2% NI) then pay a tax of 40% of the residual £250, (£100) My total outlay will therefore be £680 for a £1000 bike, a saving of £320, plus the benefit of monthly instalments.

Exactly the same scheme my employer runs. I snapped their hands off!!