Cycle to Work Schemes

[HLaB]

If they ask you to pay the market fee, then you might as well buy your bike outside of C2W. Give you my example:

I opted for a £1k voucher. My employer uses Halfords who charge me (via my employer) an 11% admin fee - total cost £1116. I pay £93 salary sacrifice, so after 12 months, I will have paid £1116. I would then expect the bike to be free. My tax & NI saving is 22% so a £1k bike actually cost me £780.

If I then have to pay a market fee of say £360 after 12 months, then I might as well not bother with C2W. I assume other schemes run similarly, so where will the benefit for commuters?

That's the jist of it. I found out from Cycling Scotland, it might be different down south. They told me they are lobbying the government to put the old rules back.

 

[Moodyman]

Ohh them Scots. They always do things differently up there. Usually better, but not sure on this occasion.

 

[Norm]

I heard today that the government are now insisting that you pay the market price for a bike instead of the old system where you paid say 5%. Meaning that on a bike of say 1k at the end of the year you have to pay what its actually worth not a percentage, which may be £350 + :-(

That would immediately pretty much negate the benefits of the scheme! You'd end up paying around the same amount as buying direct, but with uncertainty about the actual amount to be paid and without taking ownership of the bike until the end of the rental period.

You'd be tied to the employer for the length of the scheme or risk losing the rental money that you had paid and be tied to whatever retailers your employer's cycle scheme had selected. You are also unlikely, with any of the larger schemes, to get any sort of discount from the retailer, unlike turning up with cash.

The only possible benefit is that it could be an interest free loan but, given the variability of the final purchase price, you could lose out.

If that's true, that would be the death knell for the scheme, IMO.

 

[Inertia]

I heard today that the government are now insisting that you pay the market price for a bike instead of the old system where you paid say 5%. Meaning that on a bike of say 1k at the end of the year you have to pay what its actually worth not a percentage, which may be £350 + :-(

Where did you hear that HLab? I havent seen anything about that yet, what would the gov get for making us pay full wack at the end?

 

[HLaB]

Where did you hear that HLab? I havent seen anything about that yet, what would the gov get for making us pay full wack at the end?

I was talking to the folk from Cycling Scotland today; it might just be the Scottish Government ? they're lobbying/ advising the government to reinstate the old rules.

 

[Norm]

they're lobbying/ advising the government to reinstate the old rules.

If that's the approach they are taking, they might struggle as the "old rules" say that, if you don't pay market price, any difference between market value and price paid is a taxable benefit.

Rather than bringing in new rules, they would just be enforcing the old rules.