[Closed] cycle-to-work - company has just stopped doing it after 8 years

Cheaper to buy in sales anyhow

Cheaper to buy in sales anyhow

Not if you want anything under 2 years old! Saving 35% off a brand new model bike is not to be sniffed at.

Then there's the fact you pay for it monthly out of your wages, where you don't notice it, but you do notice paying £1k out as a big lump...

Then there's the fact you're helping support a local bike shop, not an Internet warehouse...

etc...

Update - Just emailed two of the MD & ANO & one said 'News to me' so perhaps I will be lucky.

Unfortunately the accountant chappy is on holiday.

BTW - We do Cycle-to-work - direct to the shops so the LBS that you buy from just sees it as a credit card purchase & is not affected by the tax dodging - WinWin.

Then there's the fact you're helping support a local bike shop, not an Internet warehouse...

says who ? halfords muscled in on the cycle to work so with many multinationals you have the choice to go to halfords or rob the profit from your local bike shop that pays halfords more than C2W for the privaledge.....

Who will buy all the boardman bikes now !!!!!

think of the children.

I considered the pros and cons of buying my next bike through the c2w like i did with my last one.... personally i hate paying for shit monthly , i hate being limited on which bikes i can have - as the "we can get any bike line" is a load of shit and i like not being tied to the company in times of uncertainty.....

so i bought with cash at an LBS

trail-rat - wires crossed there - as I said above our company did (maybe does) do it the direct way, so it is just a credit card purchase to the shop not using any of these C2W con companies.

ah excellent for your local shop 😀 .... but my point still stands - not all C2W is a boon for the local bike shop.

At least 2 of my local bike shops wouldn't still be open if it wasn't for Cycle to work scheme.

I've had 4 bikes over the years from work, but decided I wasn't going to do it again, as you say TR, I don't really like paying for things monthly. Then I moved to a new company, and now have access to bikes up to 3.5K! Aarghh! 😆

Interest free credit card and buying something in the sales is almost as cheap

I'm using the (Halfrauds) C2W scheme for my next bike, from a proper little independent bike shop (Bikefix). Without it they wouldn't have got the sale. I'm sure they'll make less margin with a C2W purchase, but it's still better than zero

The only reason C2W is a problem is the £1k limit is a bit restricting. There was no limit at my last company

Bike shops make very little margin on C2W sales, especially as the larger scheme operators take 10-15% of the RRP as their commission. C2W sales [i]might[/i] put the shop in a position to negotiate a better overall margin from the distributor though (but only a few %).

There's a theory that each bike sale will result in some follow-on business but (a) there's the "STW" types that avoid LBS where possible (b) those that are just adding another bike to their collection and (c) those that get the bike, put it in the garage and then never ride the thing.

"but it's still better than zero"

I hate that saying - there are associated costs with selling a bike over and above that of actually selling the bike - along with the time spent not doing more profitable activities - you might find a shop makes a loss on C2W sales depending on the administrator.

with some C2W schemes your pretty much reliant on repeat custom to make profit from C2W .....

c) those that get the bike, put it in the garage and then never ride the thing.

Shit! He's on to me.

[b]Saving 35% off a brand new model bike[/b] is not to be sniffed at.

I've never bought through C2W and don't know much about it, hence this cut being taken by middlemen who administer the scheme is news to me. How sad that a tax break for making a positive lifestyle choice and that could benefit small local businesses to boot if set up right, has been "privatised" for the benefit of pen pushers.

Unless you're a higher rate earner, 35% is optimistic at best.

The tax break also (unfairly) most benefits higher rate tax payers - those that least need the saving.

How sad that a tax break for making a positive lifestyle choice and that could benefit small local businesses to boot if set up right, has been "privatised" for the benefit of pen pushers.

Only because many accounts departments don't bother administering it themselves, which they are totally free to do if they wish.

It's not hugely complicated for an employer. Just another salary sacrifice scheme.

@benp1 The £1K limit comes from the Consumer Credit Act not the C2W scheme. For a company to offer credit (which this scheme is) over £1K then they need a Consumer Credit Licence. In practice this tends to be financial companies and companies who deal in large consumer items such as (for example) furniture where a showroom purchase is likely to be over that amount.

For those of us who already bike £1K seems like a low limit but to most people £1K is a very expensive bike.

£1k is certainly adequate for a getting a bike to Cycle To Work.

Being an Accountant I can’t see why the C2W scheme is so misunderstood by some. Just think of it as £1,000 interest AND TAX free loan. Okay, so the LBS take a hit for the admin of the scheme and won’t discount or offer the scheme on sale bikes but that doesn’t affect the financial effectiveness to you, the buyer.
If, like I did, you go for a bike >£1K with some persuasion the LBS should discount on the difference. I bought a bike for £1,600 the first £1,000 on C2W which effectively cost me £780, and then got 10% off the remaining £600 so paid £1,320 in total for the bike. Around about 17.5% discount off the bike of my choice ain’t too bad a deal. Okay you might be lucky and pick that up in some sales in which case interest free credit card would work just as well but then it’s lick of the draw to get the size/specs that you want

£1k is certainly adequate for a getting a bike to Cycle To Work.

Indeed -I bought (with my own cash, not on a C2W scheme) a brand new 2016 Genesis Croix de Fer for £900. More than good enough for commuting, in fact it's good enough that I've used it for all my road riding this winter. Head to Decathalon or Halfords and you'll pick up a decent bike for commuting for £500

Being an Accountant I can’t see why the C2W scheme is so misunderstood by some. Just think of it as £1,000 interest AND TAX free loan

As an accountant surely you know that after paying the "loan" off you don't own the bike. It still belongs to your employer. You can pay ~50% of the original value of it to purchase it, or you can pay to keep leasing it and still not own it for another three years.

@whitestone - I know, that's why the limit was removed at my last company (big retailer). It all depends on how much sponsorship the scheme gets, lots of cyclists at Exec level at my last place, including the UK CEO at the time

@bails - it's about 65% including the final charge (the one to lease it for years, i.e. keep it) if you're a higher rate taxpayer

@trail_rat - I appreciate there will be associated cost, and the margin they make will vary by bike, but if it genuinely was so bad they why not say no. It's a choice

Our company changed from Cyclescheme to Cyclesolutions a few years ago, now we're stuck with having to buy from Wheelies, before we got a voucher to use in whatever LBS you liked (and if you knew them well you could top up your purchase, which isn't really legal). 😉

The only reason C2W is a problem is the £1k limit is a bit restricting

This always winds me a up a bit, and I hear it quite regulalry. £1k is NOT restrictive at all for buying a decent bike (and gear) to cycle to work on/use as a commuter, even for general leisure or utility work outside of that.

It might be restrictive if you're wanting to use it to pay for your new bouncy carbon endurosteed but that's not really what C2W scheme is supposed to be about!

"@trail_rat - I appreciate there will be associated cost, and the margin they make will vary by bike, but if it genuinely was so bad they why not say no. It's a choice"

Many do ..... many chose to deal with fair providers rather than those that want a heavy slice of the pie to not use their in house supplier - because of the obvious loss of profit generation by selling you an in house brand.

Balls, that means i've not been owning a bike for about 3 years then. When should I expect a knock on the door from a guy from the Her Majesty's Government demanding it back? I'm surprised the government has nothing better to do than to retrieve old worthless bikes off people what with the impending global economic crisis, the NHS about to implode, Junior Doctors going win strike, the EU referendum, international terrorism and everything else.

@balls ... I paid £70 to continue leasing it for a further three years at which point rentention of title will pass to me and HMRC write it off as having zero value and thereby avoiding any tax liability for benefit in kind.

(c) those that get the bike, put it in the garage and then never ride the thing.

(d) I know of more than one where I work that rode their bike into town and had it nicked in the first year. 😯

hairylegs - Member
@balls ... I paid £70 to continue leasing it for a further three years at which point rentention of title will pass to me and HMRC write it off as having zero value and thereby avoiding any tax liability for benefit in kind.

Thereby reducing your percentage saving by a further 7% on the original £1000 or in other words, a £1k bike for £850...if the cycle shop applies the 10% admin fee, that's an £1100 bike for £965...not a great deal now, is it?

I had c2w bike a few yrs ago - 3+

Genesis latitude 853 £1600 new price, discounted at winstanleys to £1100 or so, bought on c2w through govt employer paid over 12 months and then I've never heard anything else. No hire charges or end of scheme pay off charge.

Shame my employer just emailed out to say they gave had to limit the c2w amount to £1K as it breached benefit in kind rules above that amount. Some sort of tax implication - be interested in what that means/ how it impacts above £1K?

Balls, that means i've not been owning a bike for about 3 years then. When should I expect a knock on the door from a guy from the Her Majesty's Government demanding it back? I'm surprised the government has nothing better to do than to retrieve old worthless bikes off people what with the impending global economic crisis, the NHS about to implode, Junior Doctors going win strike, the EU referendum, international terrorism and everything else.

Nothing to do with the Government if you read the rules of the scheme the bike belongs to the employer and they loan it to you for a year for 12 monthly payments that just so happen to equal the cost of the bike before tax at whatever tax rate you're paying.

@daffy: Ermm ... that’s not quite how it works! The LBS sells the bike to me for £1,540 (taking 10% off the £600 difference between £1,600 and £1,000) and redeems the C2W voucher taking a £100 (10%) hit off the voucher value of £1,000 thereby selling the bike for £1,440 whilst I end up paying £1,320 for a £1,600 bike, the difference being made by the LBS discount and the tax benefits of salary sacrifice. (I did factor in the one off payment at the end of the monthly payments as well)

Stop calling me balls! 😆

I was very happy with the deal I got on my C2W bike about 5 years ago. That was back when you just pay a nominal fee after the 12th payment to take ownership of the bike. Think I paid £50 at the end of the year and the bike was mine. It just doesn't seem quite as good now that HMRC have been a bit firmer about the value of the bike at the end of the first year. I've heard of people being offered the 'buy now' option or nothing, without the choice to extend the lease. I've also never spoken to anyone who's been offered the BIK option (I'd happily take ownership of the bike after a year in return for ~£100 extra tax).

OK, I'll correct myself, £1k is a good limit for buying a bicycle to cycle to work on. I know, I have one that I paid cash for that was well under the limit (Arkose 2), and it's now had a few thousand miles on it

But if you want to buy a nice bike to cycle to work on, then you're a bit more limited. You also benefit less if you're a lower rate tax payer. 1st world problems...

The Brompton I've just bought just crept over the £1k limit, I know I could have specced things a little less or bought a cheaper folder. I also know that the margins maybe aren't as great on Bromptons as on other bikes

I've bought 3 bikes on C2W, all from LBS (to either home or work), all independent. I wouldn't have bought those bikes from those shops if it wasn't for C2W

Stop calling me balls!

+1, it is very disrespectful to call boils by an incorrect name.

I thought you now paid tax on the value of the one year old bike (50% is it) that your employers give you, not the actual value of it. Or do that three year thing until it's worthless.

Our scheme is administered (in it's entirety) by Evans. They currently own my Arkose and will do for another 4 years. I'm not sure they would want it back.

Cost nothing at the end of the initial scheme to do this.

I've often wondered what employers would do if at the end of 12 months, you turn around and say the final price is too much, keep the bike.

+1, it is very disrespectful to call boils by an incorrect name.

I thought you now paid tax on the value of the one year old bike (50% is it) that your employers give you, not the actual value of it.

Thanks [b]thegreatgape[/b]

It's an option. They can either give you the bike so you've received £500 of "benefit" from the company and you then pay tax as if they've given you £500 extra income. Or they just make you pay the £500 to buy the bike.

If I was running the company and had, say, 30 bikes through the scheme in a year, I'm sure I'd see the appeal of charging everyone £500 and getting an extra £15k in the bank.

Not sure how they can argue a year old 1k bike is worth £500 if it's been commuted on every day for say 10-20 miles for a year. £100 maybe..

Not sure how they can argue a year old 1k bike is worth £500 if it's been commuted on every day for say 10-20 miles for a year. £100 maybe..

read your contract carefully.

you have a duty to keep the bike in good condition. after a year of 10-20 miles a day id argue it would be up for a new drive train and cabling to termed "good condition" rather than "functional"

although 500 quid would be stretching it.

Sorry, my mistake, it's 25% not 50%.

HMRC PDF with "fair market value matrix":

I just got a new commuter via Cycle Scheme. The Ts & Cs seem to say now that it is OK to top up the voucher value with your own cash, but it also states that you still don't own the actual bike until the final transfer.

My company has a £3K limit on the bike to work scheme. Someone was telling me there is a proposal to make in unlimited, but I have not seen this officially anywhere.

Someone was telling me there is a proposal to make in unlimited, but I have not seen this officially anywhere.

My understanding was that it is already unlimited, if the company is a Licenced Credit broker.

Edit: Just found this

[b]There is no limit on the total value of the equipment including the cycle. [/b]It is possible
to loan two cycles to one employee if, for example, that employee needed a cycle at
either end of a train journey between their home and place of work. (However, please
see Section 9.1 where the Office of Fair Trading (OFT) has advised that the group
consumer credit licence will cover schemes up to a value of £1,000).

 

There's a theory that each bike sale will result in some follow-on business but (a) there's the "STW" types that avoid LBS where possible (b) those that are just adding another bike to their collection and (c) those that get the bike, put it in the garage and then never ride the thing.

Yeah, and:
(d) those that get the bike, and then get utterly shit service from the LBS, so continue to use internet/other LBSs/be glad they have a well equipped garage.

thegreatgape

*considers googling 'gape' for an amusing image.....pauses for thought.....decides not to*

*considers googling 'gape' for an amusing image.....pauses for thought.....decides not to*

Don't. You might get Goatse.

[b]Dork[/b] - Moderator

*considers googling 'gape' for an amusing image.....pauses for thought.....decides not to*

Don't. You might get Goatse.

Just think of it as £1,000 interest AND TAX free loan.

But it's not a "Loan" you are getting a voucher to procure an asset belonging to the scheme's operator (either your employer or a third party C2W administration company) and then leasing it for a year with no guarantee on what happens at the end of that year, you might get the three year lease extension write off wheeze offered, you might be asked to stump up "market value" including VAT...

The savings are pretty minimal, and tend to most benefit those with the least need... The sort of people who complain about being [i]constrained[/i] by a £1k limit 🙄

It's simply become a tax efficient, toy acquisition, scheme for middleclass MAMILs...

I've still not seen any goats!

Try upgrading to one of the new 3000 lumen lights.

It's simply become a tax efficient, toy acquisition, scheme for middleclass MAMILs...

Looking round the company garage any morning I'd beg to differ, the increase in cycling in the last 3 years is huge and our C2W scheme is a part of that. It's also got some serious death traps off the road!

But maybe we are in the minority, our scheme is run by our LBS (admittedly it's Edinburgh Bikes so hardly small but it's still local enough to see their original store from the office), can be used in conjunction with their sales and discounts and topped up over £1k value. It would be silly not to!

you might be asked to stump up "market value" including VAT...

I doubt this has ever happened.

I just checked my contract and I hire the bike for 12 months for 12 months of payments. The only reference to any final payment is if I leave the company during the twelve months, in which case they can ask me to pay the remaining amount, without tax benefits. There's no reference to longer hire periods or other termination payments.

I guess different organisations can implement the scheme in different ways?

Brooes that's correct but then the bike is retained by the company unless you hire it for longer or buy outright.

Brooes that's correct but then the bike is retained by the company unless you hire it for longer or buy outright.

our shop loses 10% to cycle scheme and 15% to halfords (many LBS accept Halfords) but we still get customers trying to haggle for discounts or buy sale bikes!

If you want a no fuss transaction with big savings look at 2015 sale bikes and purchase with cash or credit card; I bought my last road bike using my credit card and got £800 off the retail price

there are still many out there as UK bike biz trade was very slow from start summer 2015 through to Christmas and many brands were left with lots of bikes to clear

Giant are currently doing 40% off 2015 models which is a steal if you can find one you like. I've seen other brands doing similar discounts..

Or do that three year thing until it's worthless.

I bought my 456SS in the C2W so didn't have to wait 3 years for it to become worthless 😀 I got my own back though, as it's only ever visited my work in the back of the car.

I bought mine a few years ago. Voucher was for £1,000 but On One took 10% off the voucher value and i added £200 to get a bike that cost £1,100. Actually i added a bit more (£30 or so) to get the bike built up before delivery. They didn't bother their arse though, so that was money wasted. Then i had to buy a new rear disc as mine arrived warped beyond use. I think when i finally owned the bike i'd [i]saved[/i] around £100. Hardly a great saving but having the money taken off me at source made it attractive to me at the time.

v8ninety - Member
Brooes that's correct but then the bike is retained by the company unless you hire it for longer or buy outright.
yes in theory, but they won't come asking for it as they don't actually want it back, having already made their money and having no use for the 'asset'.
POSTED 6 HOURS AGO #

It might be theory and they almost certainly don't want it back. But this is business finance and it's not something your company will just brush under the carpet if it comes up due to internal audit or some other reason. If they remember or or required to balance the books you will be required to pay or return the bike. Probably never happen but anyone taking out c2w on a bike needs to understand this. Telling them it's just theory is not really sensible.

My company of 100 is totally on the ball and I had to inform them how I wanted to proceed at the end of each year, pay off or extend loan (at no cost). I was informed how much payment would be and how much it would be if I terminated contract before the next years lease was up. (I'd be kind of concerned if working for a company where they didn't have a handle on such basic finance, is that common!?)

People here seem to forget that Revenue & Customs had to come up with the bike value table because employers where giving the bikes to employees at the end of the year hire period (a benefit in kind) tax free.

It's simply become a tax efficient, toy acquisition, scheme for middleclass MAMILs...

No it's not, I see loads of 'not top end' bikes in our bike shed at work, the vast majority of them bought on C2W. Don't be fooled into thinking that us lot on here are representative of 'normal' people!.

@Nobeerinthefridge

correct. we sell loads of aluminium Defy's under £1000 to C2W customers who want a good commuting road bike. Some of these customers may have a nice carbon road bike for Sunday best and want the C2W bike for commuting and bad weather riding. For the majority its their first or only road bike.

Got a GT Grade Alloy 105 on C2W from an LBS, yes they have to pay costs but here is something there for them and you pay the full RRP.

However with our scheme there is no extra 'lease' costs just write off values which decrease to 0% after about 5 years. And I've never heard of anyone getting a knock on the door for their bike back...

Another benefit is the other half doesn't see £1000 leaving the bank account and moaning at you 😯

I'm pretty sceptical of these schemes, but it might be the Fox Moulder in me taking a paranoid view of it all. 😉

Generally, I think these schemes have grossly inflated the RRP of lower spec bikes that sell for less than ~£500 and reduced how decent a spec we can get for that magical £1000 LOC (albeit you can get higher LOCs if your employer has suitable paperwork).

What happened to the decent singlespeed commuters you could get for £300-400 around 2008, such as the Specialized Tricross Singlecross, with a carbon fork? How the heck is a new Specialized Langster £600?!!

Why can you metaphorically count the number of proper hydraulic disc braked drop bar bikes on one hand that come in under £1k, when instead they try to "big up" the likes of BB7s or Spyres?

Then there was the transfer of ownership charge that was vastly increased by HMRC a few years back, which ate up a lot of the scheme's potential savings for basic rate tax payers if the price cost more than £500.

The UK governments have taken far too long to positively encourage the use of cycles for all those journeys of less than 5 miles, reducing pollution levels and increasing the fitness of the UK population. They finally announced something to try and tackle this in the past week, when in my opinion these bike purchase schemes should have been helping, knowing they would reap rewards on much less demand on the NHS.

How the heck is a new Specialized Langster £600?!!

well, inflation* for starters...

I bought a Langster in 2009 for £450, in todays money ~ £550-600
The 2006 one was still about £400 if I remember?

A lot of manufacturers have been squeezing models to fit in under the £1k limit for a while, sometimes this means they cut a corner or two to do it, others seem to just sacrifice some of their margin to get more sales meaning you get some amazing bikes @£999

Why can you metaphorically count the number of proper hydraulic disc braked drop bar bikes on one hand that come in under £1k, when instead they try to "big up" the likes of BB7s or Spyres?

I think you're picking on one single technology there which is unfair, road hydros are still relatively new, and expensive for what they are, especially given that STI drop shifters have always been expensive compared to MTB/flat bar separate units. Give it another couple of years development and you'll be getting closer to those Altus and Acera level hydros on the road bikes too.

I don't think C2W is responsible for pushing upt he price of lower end bikes at all, but I do think it's improved the £500-£1000 bracket loads, certainly a lot more choice there than there ever was, and lot more sensible everyday type bikes than there ever were!

* as a nice side anecdote, I have a lovely 1986 Mercian Audax/Olympic road bike, and after some random browsing on eBay last week I managed to pick up a great condition original 1986 Mercian catalogue and price list to go with it, just a bit of nostalgic fun, but as a demonstration of inflation it's great. In 1986 my frame would have cost £112 (£2 extra for some braze ons!), and a full bike with Shimano/Suntour group was ~£350. Today that frame, with similar tubing and options would cost you ~£800, and a full bike would be £1500 - £3000 depending on groupset, so there you go a fun little example of how inflation+time clouds your concepts of how much things cost!

Wot amedias says.

Interesting stuff about final payments and extended hire periods because my contract makes no reference to either - or if it does, it's buried somewhere in obscure small print. My reading of it is that after 12 months the bike is fully mine, and no further payments are required.

I've emailed Cyclescheme for confirmation, cos paying an additional final payment makes this rather less attractive... as does the inability to sell the bike if there's an extended 3-year hire period...

Interesting stuff about final payments and extended hire periods because my contract makes no reference to either

dibbs+1 they can't openly mention it, nor can they say you SHOULD extend for the maximum amount. But, frankly, if you want to do any of the other options drop me a line please. I'll take the bike off you and will give you the cash to pay it. Basically, you'd be a plonker for choosing any other option

Broesss the cyclescheme front page says about ownership on point 4. On the homepage.

https://www.cyclescheme.co.uk/get-a-bike/how-it-works

4. Transfer ownership

When the Hire Agreement and salary sacrifice ends, you can keep your Cyclescheme Package by making a final payment for just a small amount.

Don't want to sound like a know it all but if you look at the Cyclescheme contract you signed, assuming your employer used the standard template, this is all mentioned in section 4 as well.

4.0 Salary Sacrifice and Hire Period
By entering into this Agreement you agree to hire the Equipment from the Employer for a minimum period of «Hire_period» months from the date of the commencement of your salary sacrifice (the "Hire Period"). In return for the Employer agreeing to hire you the Equipment for the Hire Period, you agree to make the payments detailed on the front of this Agreement on a Salary Sacrifice basis.

To be eligible to make the Salary Sacrifice payments detailed on the front page of this Agreement, your salary, after the Salary Sacrifice, must remain above the National Minimum Wage.

If at any point during the Hire Period, your salary falls to a level that would mean if Salary Sacrifice payments were to be made, it would be below the National Minimum Wage, the Employer reserves the right (to the extent it is lawfully entitled to do so) to suspend those payments or to deduct them from your net rather than your gross salary (meaning that you may lose your entitlement to potential tax benefits as a result) until your salary increases sufficiently.

The Salary Sacrifice may affect the level of any personal pension contributions you make or any sick pay or other pay or benefits that you may be entitled to. Please check with the Employer before signing this Agreement if you have any queries in this respect.

[b]At the end of the Hire Period, the owner of the Equipment will contact you to discuss what is to happen next.[/b][u]