Slick
Guru
That's my understanding meaning Vkster's point above is a real possibility.
Cycle to work scheme limit?
- Thread starter Doyleyburger
- Start date
Page may contain affiliate links. Please see terms for details.
You need to read the t&cs carefully. Quite often you don't actually pay the £250 to your company at the end of the year. In actual fact the company gifts the bike to you and you pay tax on a sum of £250 which is considered a benefit in kind. Annoyingly, it would be possible to extend the period to 3 years and you would pay virtually nothing. However I suspect companies don't want the hassle. This is how my company's scheme works and it is provided by Halfords
Slick
Guru
Julia9054
Guru
- Location
- Knaresborough
I have had 2 bikes on my c2w scheme. The limit at my work is £1500. I did not have to pay any final payment or extra tax on either. On the second one, Evans were happy for me to buy a bike which was reduced from £1500 to £1000 for which, through the scheme, i paid around £750 as i recall. Well worth it imo.
- Location
- Egham
Though probably not, as things seem to vary by company.I'm delighted we were able to get to the bottom of things.
From a personal perspective, I commute to work daily, and buying my bikes through the CTW scheme works for me. I've had 3 bikes now and not yet have I had to pay a 'final payment'. So for me, where I work, it's great value.
Supersuperleeds
Legendary Member
- Location
- Leicester
This is how our scheme works.
You don't pay £250 at the end of the year to buy it outright. You can pay a £70 fee (max) to continue hiring the bike for another 3 years, with no more payments. At the end of the additional 3 years, the bike is valued at zero, so is yours to keep.
This will only be an option if you employer offers it. Mine doesn't. At the end of 12 months, you can hand the bike back, or keep the bike and pay tax on the benefit in kind. I think the admin fee is nearly as much as the tax.
Custom24
Über Member
- Location
- Oxfordshire
See the table in the pdf I linked for why that's the case, for your scheme. As others have said, it's not always an option.
I find C2W an unnecessarily convoluted initiative for employees, that's allowed for intermediaries to spring up and take their cut. People will reply and say it has worked for them and that's fine, but it should be available to and the same for everyone.
Banjo
Fuelled with Jelly Babies
- Location
- South Wales
Personally I havent bothered with C to W.
Drive a hard bargain when you buy then get interest free credit if you can.No paperwork or fannying around with your employer and no concerns about future ownership issues.
Drive a hard bargain when you buy then get interest free credit if you can.No paperwork or fannying around with your employer and no concerns about future ownership issues.
T4tomo
Legendary Member
There is a lot of admin around it which is why companies subcontract it, but the intermediaries are making a good cut on the tax saving. I was lucky enough when I got my Brompton back in 2005 that our company was prepared to administer it itself (along with some other employee benefits we were setting up) and we had a motivated employee who understood the tax and legal requirements who could set up the process (me!).
vickster
Legendary Member
What sort of company do you have? Limited or sole? I'm sure there are benefits over being employed. Which is why I prefer a day rate contract through the limited company as opposed to fixed term payroll. If I were to commute on it, I believe I could have a company bike.
Slick
Guru
Of course there are tax benefits to being self employed, as long as it's bone fide. Umbrella schemes are becoming increasingly popular for individuals instead of forming a ltd company but either way, if you use a bike for work, it's tax deductible.
OP
OP
Doyleyburger
Veteran
- Location
- NCE West Wales
Thanks everyone for your responses. I have had it clarified that the limit from my employer is 2k. Although I won't qualify until January when my first 3 months at the job have passed, so I'm in no great rush to choose a bike just yet so it will be winter bike until then.
My simple mind tells me it makes all the sense in the world to use the scheme. The employees there have been using it for years, most of them year after year on new bikes or equipment. Hardly any real noticeable decreases in wages.
It does however seem to be a sticky subject around prices as it may seem that i will have to pay full retail unless certain shops manages some sort of work around regarding discounts
My simple mind tells me it makes all the sense in the world to use the scheme. The employees there have been using it for years, most of them year after year on new bikes or equipment. Hardly any real noticeable decreases in wages.
It does however seem to be a sticky subject around prices as it may seem that i will have to pay full retail unless certain shops manages some sort of work around regarding discounts
