Help me set up CTW

[hydridmatt]

I am trying to persuade my company to join the CTW scheme. I have appealed to their green credentials and the benefits of a fitter workplace, but to no avail so why not appeal to their venal side?

How much money would they save for NI contributions per signee on a a) £500 £1000 bike?

Not exact figures obviously, but a steer might change their minds...

 

[Lizban]

12.8% (ish) for NI contributions, and if they want to 15% VAT (they can claim it back on their return but make the employee pay it back still.

+ a further 5% + VAT when they sell the bike.

 

[hydridmatt]

Sorry to be dense - so on a £1000 bike, they would save £128 NI and £150 VAT. Why the hell would any company not want £278 for free?

 

[Bristol Dave]

Why the hell would any company not want £278 for free?

Not as simple as that as they would need to pay someone to administer the scheme. However, don't mention that to them

BD

 

[hydridmatt]

Thanks BD,
What are the costs incurred? Can they administer the scheme themselves?

 

[Norm]

I'm setting one up myself at the moment, as the administrator, though (and if anyone has any advice, that would be great!).

The numbers above (£278) are pretty close to correct, although the exact figure depends on all sorts of stuff and the VAT on a £1k bike is around £130 rather than £150.

The flip side, the reason that many don't want to play ball is that you could be saddling them (groan) with the burden of setting up the salary sacrifice (do you know the effect that has on your pension? bonus? next year's salary negotiations?), maintaining the bike on the asset register for the period of the scheme, reporting the sale as a fixed asset disposal... etc. It's all ball-ache.

At the moment, I can't see why we don't write the bikes off on purchase as operating expenses and not capitalise them at all. Our threshold for capitalising assets is £2,500, I don't see that there is a need for it to be lower for cycles purchased through the CTW scheme on contracts of under 12 months.

However, as I said above, any advice would be gratefully received.

 

[Bristol Dave]

Bear in mind that my experience is based on buying a bike via CTW. The employer would need someone in the payroll office to oversee wage deductions and review the paperwork for anyone in the scheme. I don't know what this would amount to from a "full ecomonic costing" point of view as it would depend on how many people take up CTW.

BD

 

[Flying Dodo]

You don't need an administrator or have to use an official provider like Cycle scheme at all. All it needs is someone to draw up a salary sacrifice letter confirming that their future salary is being reduced by whatever the amount is, which should be signed by the employer & employee, and a lease agreement. Then just reduce the salary.

Lots of useful stuff on the Cycle scheme web site.