Cycle to work scheme limit?

[Doyleyburger]

Been searching but can't seem to find an answer. ....or I'm not looking hard enough.
Been told by work colleagues that the limit has gone up to 2k but just been into my LBS who do the scheme and they still believe it's £1000, although they weren't 100% confident .

Can anyone shed any light please ?

 

[mattobrien]

I am sure someone with more knowledge than me will answer soon, but from research my understanding is as follows;

If the company plans to recover the cost of the bike from the employee then they require a credit licence. The company can use the government credit licence for values up to £1,000. If the company wishes to operate a higher threshold then they require their own credit licence.

I had a friend who had a £2.5k limit on his cycle to work, so ended up with a rather a nice bike.

 

[Doyleyburger]

I am sure someone with more knowledge than me will answer soon, but from research my understanding is as follows;

If the company plans to recover the cost of the bike from the employee then they require a credit licence. The company can use the government credit licence for values up to £1,000. If the company wishes to operate a higher threshold then they require their own credit licence.

I had a friend who had a £2.5k limit on his cycle to work, so ended up with a rather a nice bike.

Thank you mate. That makes sense

 

[Lozz360]

I am sure someone with more knowledge than me will answer soon, but from research my understanding is as follows;

If the company plans to recover the cost of the bike from the employee then they require a credit licence. The company can use the government credit licence for values up to £1,000. If the company wishes to operate a higher threshold then they require their own credit licence.

I had a friend who had a £2.5k limit on his cycle to work, so ended up with a rather a nice bike.

Good summary of what reads as quite complicated, if you read the government's guides online. So most employers will be still limited to £1,000 but depending on if they have their own credit licence, the maximum could then be £4,500.

 

[Slick]

I'm still trying to figure out if this scheme is any good or not. I've yet to find anyone at my work who can give me a straight answer to any of my questions.

 

[cosmicbike]

I'm still trying to figure out if this scheme is any good or not. I've yet to find anyone at my work who can give me a straight answer to any of my questions.

Which are??

 

[Slick]

Ooh, first one would always be, where is the real benefit for me by using the scheme?

We only get a small window to make choices on certain additional benefits like health insurance, dental cover or CTWS, and lots in between. If you fail to take any of their choices there is a cash "gift". As best as I can tell, they give me say a thousand pound voucher and I buy the bike, then I pay them £20 per week to hire it for a year allowing them to recoup their £1000 then they'll hopefully sell it to me as it's still their bike?

Even as I write it I think it can't be right.

 

[pclay]

The benefit is that the payments for the bike come out of you pay before tax. So basically you don't pay tax on the bike. If you are a 20% tax payer, you save 20% of the bike value. Why would you company decide to keep the bike after 1 year? They will sell it to you for about £70 (for a £1000) bike.

 

[Slick]

They don't say that though. They have a table giving resale values depending on age and initial price. I haven't looked at it since last year, I'll dig it out and try again as I think we have to make our choices by the end of next year. I'll get the exact quote and come back for more advice.

 

[pclay]

I got my £1000 bike in 2013, payed back £600 plus £70 purchase. So my £1000 bike cost me £670 from memory.

 

[Custom24]

The benefit is that the payments for the bike come out of you pay before tax. So basically you don't pay tax on the bike. If you are a 20% tax payer, you save 20% of the bike value. Why would you company decide to keep the bike after 1 year? They will sell it to you for about £70 (for a £1000) bike.

No. That's after a 4 year hire period. After 1 year it would be £250.

https://www.gov.uk/government/uploa...file/457866/cycle-to-work-guidance-update.pdf

In my opinion the op is right to consider the options carefully.

 

[Lozz360]

They don't say that though. They have a table giving resale values depending on age and initial price. I haven't looked at it since last year, I'll dig it out and try again as I think we have to make our choices by the end of next year. I'll get the exact quote and come back for more advice.

Do you mean "they" contradict the advice above, or they don't say anything? You don't get given a £1,000 voucher to go away and buy a bike. You get a quote from a retailer then that gets approved by the scheme provider who will issue you with a certificate with which you go and collect your bike. At the end of the hire period of one year (the bike technically belongs to your employer) you choose whether to purchase the bike or extend the hire period for another three years. The cost of extending hire period is small. In my case it was £13 for a package worth initially £465. At the end of extended hire period the bike is yours with nothing more to pay.

 

[T4tomo]

Depending on your employer, some subcontract the scheme to a 3rd party, who charge a fee which takes up some of the tax saving.

When first launched the company could also recover the VAT IIRC, which made it even more attractive, and there was no need to charge a residual value.

Where it's a voucher scheme, some retailers won't let upyou,use it on discounted bikes (as they get charged the admin fee by the third party operator

 

[Slick]

Depending on your employer, some subcontract the scheme to a 3rd party, who charge a fee which takes up some of the tax saving.

When first launched the company could also recover the VAT IIRC, which made it even more attractive, and there was no need to charge a residual value.

Where it's a voucher scheme, some retailers won't let upyou,use it on discounted bikes (as they get charged the admin fee by the third party operator

Ahh, that sounds like a distinct possibility in my case and may explain the discrepancies.

 

[vickster]

What bike do you want to buy? If you can only buy a bike at full price on C2W, you may find it no more costly to buy an older model discounted with cash or even in interest free credit over 6 or 12 months

If you go c2w, as with any lease, make sure the bike is insured for all eventualities as otherwise you could find yourself paying but have no bike