Setting up a cycle to work scheme

[Twizit]

As above really. I'm in the fortunate position of being able to push one of these through at work and be responsible for getting it set up.

I'm really after advice from anyone who's set one up themselves, any things to look out for / which are the best providers to use etc etc.

It seems like lots of the initial savings to be had when the schemes were first set up are now gone - what with the minimum final sale values being set and VAT being added to the rental prices. Are there any clever ways around this so that it's still good value to employees?

Any advice greatfully received, thanks.


Edit: should have added - have done a fair amount of reading up on the scheme so pretty much understand how most of it works - just getting down to the nitty gritty bits, and most importantly deciding which provider to run it through - real life experience of dealing with these companies would be great if anyone on here has done such? Thanks

 

[sabian92]

I know literally nothing of this scheme but I would suggest you avoid doing it through Halfords...

 

[fossyant]

I'd not bother now. Don't forget to set up the extended hire period to reduce the final value. TBH how about an interest free loan to staff - that's what my employer has chosen now - knocked back the scheme in favour of this. And you also have advantage of £1000 of cash to go and get a bike at sale or reduced price rather than RRP.

 

[carolonabike]

I run our scheme at work and I would say go for it. It's true that the savings are less than they were but there's still a substantial saving to be made, I've just bought my second bike and as a 20% tax payer I'm paying 83.33 gross per month which equates to a net of 56.65 so I'll pay back £679.80. We still need to sort out what to do when the payments are finished, I haven't bought my first bike yet but I think we'll go down the taxable benefit route. It seems the easiest option which means I'll be taxed on the value of the bike if and when I decide to buy it.

I originally signed up with Cyclescheme but cancelled after I realised how little they did and that they took 10% commission from the bike shop. This time we are doing it ourselves. We're only a small company so it's not a big task.

 

[Twizit]

Thanks all.

Interesting idea about the tax free loan.

Carolonabike - what did you do about getting the right paperwork etc set up? Assume this is reasonably readily available from the Government somewhere?! Would worry about it not being absolutely compliant for salary deduction purposes if it wasn't from a good source. Presume since you're running it yourself you can also purchase the bikes from wherever you chose and at whatever discount you can negotiate?

 

[carolonabike]

You need a consumer credit license which you can download from here http://www.oft.gov.uk/OFTwork/credit-licensing/cycle and the Dept for Transport guidlines are here http://www.dft.gov.uk/publications/cycle-to-work-scheme-guidance this contains a lot of useful guidance. The group consumer credit license only covers loans of up to £1,000 so effectively that's the upper price limit.

Because we had an old hire agreement from Cyclescheme I just amended it where necessary. You don't need a huge long document as long as you make it very clear to users about how deductions are made from salary, what happens if they leave during the hire term, the bike is stolen or damaged, absence from work etc.

Yes, now we can buy bikes from anywhere, from the shop's point of view it's a sale like any other, I organised a BACS payment to the shop and collected the bike the next day.

There are loads of threads on here, it'd be worth trawling through a few although like a lot of threads it can get quite contentious

 

[Darren862]

I ran mine through Halfords and cyclescheme. I scouted a decent local Halfords (Llanelli) first and haggled with them. I'd already asked who would be interested so I knew roughly how many bikes would be bought. I asked the Bike Hut Manager, if I brought 'X' amount of sales to his store, what deals could he offer me and my staff. We got some good deals! We were/are all pleased with the service we received. Best of all is that the staff at our Halfords store are cyclists who know what they're on about and are also active members of our local club. The after sales service has been spot on too!

 

[lejogger]

I know literally nothing of this scheme but I would suggest you avoid doing it through Halfords...

On what basis? The Halfords C2W scheme is actually one of the best ones around for maximising savings to the employee. If you need me to expand on that I happily will.

Back to the op...
I implemented ours and we are just about to enter our third year. The most important thing to remember is that whoever owns the bike through the hire period holds the power. If you can persuade your organisation to shell out in the first instance then you have a much better chance of making the biggest savings. If you use a third party scheme that hires you the bike you have to remember where their profits are coming from... the savings that should be being passed onto you.

So in a perfect world, you don't use any third party company. You negotiate with one or a few LBSs and buy the bikes from them outright. As long as your company don't want to make a profit, merely provide a C2W service, collect the salary sacrifice until you break even and then simply gift the bike to the employee.
There is a small tax liability for the benefit incurred but this is much lower than the extortionate final payments being quoted by a lot of the third party providers.

If you would rather have a third party involved then something like the Halfords scheme is a good option. You don't have to buy Halfords bikes... you can use their special order line to get your hands on most brands as required. Most importantly though Halfords provide the website and the advertising material for zero cost. They are just happy to get more customers through the door - the ownership of the equipment stays with your employer - saving any transfer complications further down the line.

The interest free loan is an option, but don't forget to do some calculations on what savings can be made with the two examples above. Even though salary sacrifices are now not VAT exempt, the standard rate tax payer can still save over 30% as an absolute minimum.

 

[sabian92]

On what basis? The Halfords C2W scheme is actually one of the best ones around for maximising savings to the employee. If you need me to expand on that I happily will.

Apart from the Carerra and Boardman bikes, they sell crap. All of them apollo bikes (and granted, if you were going on C2W, you wouldn't buy Apollo anyway...) and the like are rubbish.

 

[lejogger]

Apart from the Carerra and Boardman bikes, they sell crap. All of them apollo bikes (and granted, if you were going on C2W, you wouldn't buy Apollo anyway...) and the like are rubbish.

Yes... they do sell a lot of BSOs for the average Joe, but as I said in my post, they do have a dedicated special order line where they can source virtually anything you want eg Trek, Dolan, Specialized etc.
They won't be the ideal choice for many, but they were a good fit for us, and there are ways to avoid only giving your staff a load of guff to choose from.
I've got two Boardmans now, and no complaints.

 

[Twizit]

Thanks all - lots of really useful information in there and very much appreciated.

We're a reasonable size group (around 180 staff and growing v quickly) but rather disparate geographically, so there is an attraction about using someone like Halfords who are available to most of our staff - especially so if you can order non-standard Halfords bikes from their special order line. I presume Evans Cycles also offer such a service - wondering if anyone else has used them / experiences?

Think I've got a fair bit of reading up to do - many thanks carolonabike for the links to further info.

 

[lejogger]

Thanks all - lots of really useful information in there and very much appreciated.

We're a reasonable size group (around 180 staff and growing v quickly) but rather disparate geographically, so there is an attraction about using someone like Halfords who are available to most of our staff - especially so if you can order non-standard Halfords bikes from their special order line.

This is one of the reasons that we chose halfords. We're based over nearly a hundred sites so it was important that all staff had access to the same bikes, offers, warranties etc so going with a national chain was almost a no-brainer.
I don't know much about the Evans scheme... I would just advise you make sure you go for one where your company owns the bikes.

 

[carolonabike]

I would just advise you make sure you go for one where your company owns the bikes.

I would agree, this is one of the most important points, we opted out at the beginning, I didn't like feel comfortable with passing ownership to a third party, and I've since heard a few stories where folks got in a bit of a tangle at the end of the hire period, ownership reverted back to the scheme and they were forced to pay more than they expected or even lost the bike.

 

[Kiwiavenger]

Thanks all - lots of really useful information in there and very much appreciated.

We're a reasonable size group (around 180 staff and growing v quickly) but rather disparate geographically, so there is an attraction about using someone like Halfords who are available to most of our staff - especially so if you can order non-standard Halfords bikes from their special order line. I presume Evans Cycles also offer such a service - wondering if anyone else has used them / experiences?

Think I've got a fair bit of reading up to do - many thanks carolonabike for the links to further info.

I wanted to get an orbea on ride to work through Evans, phoned up customer service to see if it was doable and got told to call the store, called them and was told "if it's not on the site we cant get it."

I bought my allez instead through them but would much rather have the orbea! Lol

Sent from my LT15i using Tapatalk

 

[boydj]

So in a perfect world, you don't use any third party company. You negotiate with one or a few LBSs and buy the bikes from them outright. As long as your company don't want to make a profit, merely provide a C2W service, collect the salary sacrifice until you break even and then simply gift the bike to the employee.
There is a small tax liability for the benefit incurred but this is much lower than the extortionate final payments being quoted by a lot of the third party providers.

Totally agree. Admin for the company is minimally more than if a third-party is involved - you simply write cheques to the bike shop. On the other hand, this gives better benefits for the employees in that you are not taking a cut from the bike shop and can therefore negotiate discounts. At the end of the hire you can give the employees the bikes and put a tax charge through or you can continue the hire at little or no cost.

If you look at Cyclescheme - they take 10% off the bike shop, then at the end of the hire they take ownership of the bike from the employer and charge 7% of the initial price to hire the bike back to the employee - who has already paid back the full price of the bike. Money for old rope for them - a bit of a rip-off for the employee as the tax charge for being given the bike is a lot less than the 7%..