Cycle to Work

[wheres_my_beard]

(If this is covered elsewhere, please oint me to the thread about the Cycle to Work scheme...)

I am trying to encourage my employer to join up (for my benefit and that of the whole company who is struggling with a tiny on site car park and paying out a small fortune for staff to park in a local multistory carpark), but things seem to have got a bit complicated; I raised it as an agenda item for the Staff Council and provided a three page write up based on info I found online, however, there were some issues raised, and now the idea is apparently going to have to go to about 7 team managers, and also a Core Management Team (Senior Managers above the team managers) for discussion separately. They want more info for this to happen.

So it looks like the wheels of bureaucracy may be moving slightly.

It seems that one of the main sticking points is what happens at the end of the hire contract, and the company either having bikes they can't do anything with, having to pay for bikes to become property of the worker, or the worker having to pay a an amount (tax? nominal fee? difference to full RRP?) to take ownership, or something else happening. One of the Managers is a former Police worker and wants everything to be done "legally", as she was uncomfortable with the idea of workers keeping bikes if they weren't explicitly allowed to.

I understand that for the scheme to work, there can be no assumption that the bike will become property of the person hiring it, but what actually happens once the contract ends?

Also has anyone else had experience of companies who are unwilling to sign up to the scheme?

 

[matthat]

Hi there, I now have three bikes i've purchased through the scheme www.cyclescheme.co.uk//.
Basically the way it works is for the 1st yr you pay X amount per month which technically the business own but you use. At the end of the year you can either Op 1, hand bike back!! (shake hands of it) Op2,pay a medium sum outright and then keep the bike to do with what you want (keep or sell on) or Op 3 pay 5%ish and keep bike for further 3 yrs before you can get rid! In that final 3 yrs you make no further payments.
I've never known anyone give bike back after 1st yr because are you really going to pay hundreds for 12 months use.
I work for big national supermarket and not really had any problems doing the scheme. The only bit that takes time is the payment process. You have probably read this but i'll say it and you can ignore if required. So you go to said LBS and say i'd like a cyclescheme bike, they then write you a quote for everything you require (helmet,lights,clothes,waterproofs,locks,panniers, oh and bike!!) not exceeding £1000 all in. You then go home and enter all info onto cyclescheme website and send it off. Cyclescheme then approach your works and clarify you work for them and they are willing for you to take part in scheme. Presuming everyone says yes work then pay cyclescheme monies and you get an e-mail or voucher to the penny that you have requested and then goto shop with id, quote, and e-mail or voucher and then all done. Also the scheme takes in to allowance your wage after deductions so if it falls below minimum wage you'll get knocked back. So if staff are on minimum wage and ask for £1000 it'll be a big fat NO. For £600 i paid back under £30 a month for 12 months. The bit I don't understand is whats in it for work!! They must claim it back as tax relief or something as we have over 600 places of employment and probably at least 5-10 people on average at each one using scheme.
Surely one of your big wigs could look at website and read the section about the employer requirements or even give them a call. Feel free to PM if you have any questions i might be able to help with.
I've always gone for op 3 at end of 1st yr also my figures above are ish figures but close enough to describe how it works i hope.
Hope that all makes sense.

 

[wheres_my_beard]

I understand the benefits for the employer on the whole (salary sacrifice is deducted before employers NI contributions are calculated, meaning the employer pays less (and they get a healthier work force, and less congestion in the car park), as does the employee, who may end up paying less tax, pension contributions, child support etc if based on gross salary), however the options at the end of the initial contract are new to me. However I've taken a look at the cyclescheme website, and it's all there; not sure how I missed it. Unfortunately the governments own information is quite confusing and complicated.

So, from what you're saying the company doesn't need to sign up to allow people to use the scheme, but employees express an interest directly with the cyclescheme people once the total cost has been worked out with a bike shop. It also looks like the agreement is between the employee and the scheme, not with the employer, so the scheme will administer the account, and simply inform the company of what needs to be deducted. And the employee discusses the end of contract arrangements with the scheme, and agrees an appropriate outcome.

Am I understanding that correctly?

 

[matthat]

The company DOES need to be signed up to the cyclescheme but yes you are correct as in the contract is between the employee and cyclescheme as they handle all communication and final payments etc.

 

[shouldbeinbed]

The company has to sign up to the scheme in so much as they buy the bike up front and own it for the duration of the agreement, also as they pay your salary theyhave to deduct the appropriate amount and pay it on - whether they work that one outt or get told from a 3rd party = ????? , Don't undersetimate the need for their goodwill and input
.
The end of the scheme is now usually:
A) hand the bike back to the company (nobody really benefits)
B) pay a now far more closely scrutinised by HMRC Fair Market Value purchase fee (~25% of purchase price) to own the bike outrigh there and then
C) continue to 'hire' the bike from the company for an agreed period of 2-3 years at zero cost from your salary until the bike is considered worthless in commercial terms and it passes to your ownership for no outlay.

The end is something individual companies, as the bike owners, decide upon, I would strongly suggest you would be better off asking your employer and their preferred scheme administrator such technical questions directly rather than hoping that us (generally) end users will have taken the time to find out the intricacies of the financial ins and outs that occurrs behind the scenes?

 

[hopless500]

[quote="w

So, from what you're saying the company doesn't need to sign up to allow people to use the scheme, [/quote]

I administer the cycle to work scheme at our place. And yes, the company DOES have to sign up. I would need to double check the exact particulars now, as they update it pretty regularly and it's about a year since the last person bought a bike through the scheme. If you can hang on until Monday, I can have a look for you....

 

[wheres_my_beard]

The end is something individual companies, as the bike owners, decide upon, I would strongly suggest you would be better off asking your employer and their preferred scheme administrator such technical questions directly rather than hoping that us (generally) end users will have taken the time to find out the intricacies of the financial ins and outs that occurrs behind the scenes?

My company does not have a prefered scheme and only knows what I have told them, which as you can no doubt gather from this thread already is limited.

I have been asked to gather more information, as the person who has raised the idea of the scheme with my work and am trying to become as informed as possible in lieu of my company doing any of the actual leg work themselves. I hope you don't think I am asking you to do any research at all, I am merely trying to draw on the experiences of people who have been through the scheme, to make sense of some confusing information. which could potentially have all sorts of implications. They seem unlikely to sign up for anything until they know the likely ramifications of doing it.

 

[hopless500]

(If this is covered elsewhere, please oint me to the thread about the Cycle to Work scheme...)

I am trying to encourage my employer to join up (for my benefit and that of the whole company who is struggling with a tiny on site car park and paying out a small fortune for staff to park in a local multistory carpark), but things seem to have got a bit complicated; I raised it as an agenda item for the Staff Council and provided a three page write up based on info I found online, however, there were some issues raised, and now the idea is apparently going to have to go to about 7 team managers, and also a Core Management Team (Senior Managers above the team managers) for discussion separately. They want more info for this to happen.

So it looks like the wheels of bureaucracy may be moving slightly.

It seems that one of the main sticking points is what happens at the end of the hire contract, and the company either having bikes they can't do anything with, having to pay for bikes to become property of the worker, or the worker having to pay a an amount (tax? nominal fee? difference to full RRP?) to take ownership, or something else happening. One of the Managers is a former Police worker and wants everything to be done "legally", as she was uncomfortable with the idea of workers keeping bikes if they weren't explicitly allowed to.

I understand that for the scheme to work, there can be no assumption that the bike will become property of the person hiring it, but what actually happens once the contract ends?

Also has anyone else had experience of companies who are unwilling to sign up to the scheme?

btw - if you want to pm me, I can forward the last cycle to work email I received - they come in monthly with any updates..

 

[shouldbeinbed]

You might do better to ask cyclescheme and the bike companies that run schemes and call round local big companies/public services who are most likely to be participants for the level of detail you need to gather. Most of us on here get a payslip with a deduction already detailed and don't have to get involved in the nitty gritty other than picking our bike at the outset and accepting/negotiating the FMV deal at the end.

 

[stevede]

My company (large PLC) offer Cycle to Work. On the part about the bike ownership at the end of the contract, the part of concern in the OP's post if I have understood correctly, the company offer you the bike in accordance with HMRC guidelines (% market value etc), but they also state that if you do not want to take ownership of the bike, they will charge you a disposal fee which just happens to be the same as the cost of buying it. This means that they will not be left with anyone simply handing back the bike at the end.

On the latest window (they offer the scheme 3 times a year for 5 weeks), they have said that they will charge the final value via P11D which means you only pay the tax as a BIK on the actual amount.

Hope this helps

Regards

Steve

 

[DiddlyDodds]

Is there a big difference between going through the cyclescheme and just getting a bike on interest free over 12 or 18months.

 

[vickster]

I think it depends on the end payment, your tax code and whether you can get any sort of deal on the bike. Often c2w bikes are full rrp as the retailer has to pay a 10% fee

 

[BSRU]

You can buy sale bikes but the retailer will add a fee, usually 10% to cover the cyclescheme fee, sometimes more for some reason.

 

[vickster]

I think it depends on the retailer. Certainly in the past, on your bike has said no c2w on sale bikes. I think ribble add 10% for c2w sales

 

[Leaway2]

My company will not join. They looked into last month and decided it was too complicated. They also mentioned that my pension payments would suffer due to them coming out after the deduction. Sounded like they thought it was too much trouble tbh.