Cycle to Work Scheme experiences

[Grant Fondo]

Don't forget you can do it if self employed as well, put it through the books as 'company bike' and HMRC let you (once) get it VAT free and offsets corp tax as 'equipment' (so 20% + 19% off). Remember to spend £2k+ on it if you are on VAT flat rate

 

[si_c]

Nowadays it is dependent on the company you work for and/or the scheme supplier.

Our company, with the scheme from Cycle Solutions is still limited to £1000 (and the company only joined in June this year, well after that limit was scrapped in the legislation).

I would have used it if it weren't limited to £1000, when I bought my new bike in August.

We're using Cycle Solutions and have a cap of £5k as noted above - it may have taken a few months for them to decide what to do following the change in rules.

 

[kingrollo]

I thought it was limited to £1000, or is that depending on the company you work for?

It's £10k at the company I work for.

 

[NorthernSky]

£1k limit on ours

 

[rivers]

£1500 for a non-ebike (paid over 18 months), £3k for an ebike, paid over 2 years (i think it's 2 years)

 

[vickster]

It's £10k at the company I work for.

NHS?!
Our level is linked to salary/seniority (thus perceived affordability). I could spend 3.5k

 

[Jenkins]

No need to stay with the employer for another 5 years. The "extended loan agreement" cost nothing (or something nominal) and is just a way to get around the fair market value charge. It's only if you leave during the initial hire period where you need to be careful.
I've used C2W several times. It's a relatively pain free way to get a bike and pay for it over the course of a year if you don't want/can't get a credit card or interest free finance.

I looked into this as I was thinking of getting a bike on the scheme, but also with potential early retirement happening next year before the first 12 months were up. This is the reply I got from Cycle Solutions as the provider...

"So, for arguments sake, if you were to leave your employer’s 6 months into your Hire Agreement, they would take the final 6 payments all at one from your last pay, this would be without tax and NI savings.

As you have made savings on the scheme, if you were to leave your employers you would still have to select one of the ends of scheme options.

So, because you have made tax and NI savings and well as savings on the bike you are not the legal owner. If we were to transfer you the ownership without you selecting one of these three options, it would be classed as a benefit in kind which is then taxable, so all the savings you have made on the scheme can then be taken from you.

Your three options will be...

Option 1 – Extend the lease for 60 months. Now with this option you extend the lease for a further 5 years, during the 5 years to payments you were previously paying stop and it is 100% free for you. Now you are not the legal owner of the bike as there is still an outstanding balance attached to it, so you cannot sell the bike, however we do not contact you or ask for the bike back. So technically it is yours it is just for legal and tax reasons it is now. After the 5 years has finished you will then receive an email to advise the legal ownership has been transferred to yourself.

Now this extended rental is with Us, Cycle Solutions, so if you were to leave your employers during this time period it would not matter, also, if you wanted to take out a new scheme with your employers it would not affect the current scheme you had.

Option 2 – Buy the bike for the HMRC Fair Retail Price. Now with this option you would have to a one-off payment of either 18% (RRP Below £500.00) or 25% (RRP above £500) which is X Amount. We do not tend to recommend this option as the saving of X Amount that you have made over the scheme period will dramatically decrease so that you have only saved X Amount. But then you are the legal owner of the bike and you can then do what you want with it.

Option 3 – Return the bike back to us at a fee of £36.00, however if you do this then you have paid X Amount over 12 months and then you have absolutely nothing to show for it. The only people who tend to take this option is people who are moving outside of the UK and do not want to take the bike."

 

[NorthernSky]

I looked into this as I was thinking of getting a bike on the scheme, but also with potential early retirement happening next year before the first 12 months were up. This is the reply I got from Cycle Solutions as the provider...

"So, for arguments sake, if you were to leave your employer’s 6 months into your Hire Agreement, they would take the final 6 payments all at one from your last pay, this would be without tax and NI savings.

As you have made savings on the scheme, if you were to leave your employers you would still have to select one of the ends of scheme options.

So, because you have made tax and NI savings and well as savings on the bike you are not the legal owner. If we were to transfer you the ownership without you selecting one of these three options, it would be classed as a benefit in kind which is then taxable, so all the savings you have made on the scheme can then be taken from you.

Your three options will be...

Option 1 – Extend the lease for 60 months. Now with this option you extend the lease for a further 5 years, during the 5 years to payments you were previously paying stop and it is 100% free for you. Now you are not the legal owner of the bike as there is still an outstanding balance attached to it, so you cannot sell the bike, however we do not contact you or ask for the bike back. So technically it is yours it is just for legal and tax reasons it is now. After the 5 years has finished you will then receive an email to advise the legal ownership has been transferred to yourself.

Now this extended rental is with Us, Cycle Solutions, so if you were to leave your employers during this time period it would not matter, also, if you wanted to take out a new scheme with your employers it would not affect the current scheme you had.

Option 2 – Buy the bike for the HMRC Fair Retail Price. Now with this option you would have to a one-off payment of either 18% (RRP Below £500.00) or 25% (RRP above £500) which is X Amount. We do not tend to recommend this option as the saving of X Amount that you have made over the scheme period will dramatically decrease so that you have only saved X Amount. But then you are the legal owner of the bike and you can then do what you want with it.

Option 3 – Return the bike back to us at a fee of £36.00, however if you do this then you have paid X Amount over 12 months and then you have absolutely nothing to show for it. The only people who tend to take this option is people who are moving outside of the UK and do not want to take the bike."

ah good reading. really the only thing to do is option 1 to get any benefit from it

 

[si_c]

I looked into this as I was thinking of getting a bike on the scheme, but also with potential early retirement happening next year before the first 12 months were up. This is the reply I got from Cycle Solutions as the provider...

I've had a C2W scheme on a 1 year fixed term contract, they were really leery about giving it to me because of the timings around leaving my employer with a month or two left to run on the scheme. A discussion with the C2W provider and my employer resulted in a 9 month C2W voucher which I was quite happy with. It might be worth investigating something similar.

 

[kingrollo]

NHS?!
Our level is linked to salary/seniority (thus perceived affordability). I could spend 3.5k

Yes NHS . But each hospital has there own terms. Cyclesolutions terms as per post up thread.

 

[Chislenko]

I've never worked for a company that offered it.

 

[Wooger]

hi
i was looking into cycle to work. i had my eye on a £1000 bike.
the agreement is you 'hire' the bike for 12 months, then at the end you have the option to buy the bike at current market rate as calculated by HMRC (via a Fair Market Value payment)

i have been told that on a £1000 bike that it will cost £250 to buy!
seems very high to me.

there is another option to go into an extended 5 year agreement and by then the bike is yours for free.

just wondering others experiences

Exact same situation 2 years ago for me. No option to extend at that company and avoid the £250 fee, for a bike which *Ive already paid 100% of the cost of from my pre-tax wages*, and that £250 would’ve wiped out almost all the savings.

That plus tie-in to the company made me opt for the shop’s interest free credit, and with a separate discount not available for cyclescheme purchases I was way ahead.

Cyclescheme is a ridiculous policy that largely fails to benefit the people who need it, but is massively successful for saving higher rate taxpayers (Dentists?) 40% on their newest £5k carbon bike.

It should be replaced with vouchers for genuine cycle commuters to get a functional but basic bike for cheap. And with no tie-in to your employer.

That said, I’m thinking about using the scheme on my next purchase (I am one of those lucky beneficiaries), but despite the savings, new bike prices seems laughably inflated at present and I resent paying so much more than 2 years ago for an identical bike. I think I may end up saving £2k and buying a used bike.

 

[fossyant]

I used the scheme when it first came out - saved a little, but I lost out on mileage expenses - wasn't allowed to claim whilst I was 'hiring' the bike.

 

[itboffin]

I have a question re the scheme.

If you opt for a 4 year duration do you continue to pay the monthly deduction after the original total cost has been paid back? in cyclescheme instance is the first 12 months.

For example a £3039 bike over 4 years is a pre-tax monthly cost of £253.25 after tax £146.89, times that by 12 months equals the costs of the bike, times that by 48 is a whopping great £12,156 that can't be right?

 

[Trickedem]

I have a question re the scheme.

If you opt for a4 year duration do you continue to pay the monthly deduction after the original total cost has been paid back? in cyclescheme instance is the first 12 months.

For example a £3039 bike over 4 years is a pre-tax monthly cost of £253.25 after tax £146.89, times that by 12 months equals the costs of the bike, times that by 48 is a whopping great £12,156 that can't be right?

Very unlikely, but it really depends on the scheme rules. If it is the Halfords Scheme, you pay for the bike over 12 months, then they technically retain ownership for another few years to get around the 'benefit in kind'