Do the maths on it....not all is at it first seems, and its not easy to work out!
ive not done it myself, but it is available to me. It depends if it has a residual value at the end.
with ours if the bike was orginally below £500 then there is no residual value after 5 years. If above £500 then you have to pay 2% of that....you can change the bike at 3 years and start again, but there is an 8 - 12 % charge (again based on purchase price) to end the original purchase...i think there is VAT on that too depending on how it was charged to you via payroll.
Hubby had one through his works scheme (government) he had the bike gifted to him at the end of the term by his employer, but he had to pay the vat which wasn't that much worked out again over a year.
His cousin on the other hand had to buy his bike (private employer) and settle a larger fee at the end.
And we've heard other similar stories of all variations tbh, it's something that isn't very clear when you first look into it. Neither of our two examples found out what situation they were in until their last year, when they both recieved a letter.
Mind the bikes our two had were very high end / high spec Mountain Bikes with a large value.
I used it a couple of years ago and just paid a token amount for the bike, since then those lovely tax people have "clarified" the rules and you now need to pay more to avoid tax, alternatively your employer or a third party (such as Cyclescheme) can retain the ownership of the bike until it loses its value.
The problem is that bike belongs to your employer in much the same way as a company car would, if they just handed the bike to you at the end of the hire period then that would be a taxable benefit.
My bike was over £650 with accessories. I paid the equivalent tax free amount over a year then a £30 fee at the end.
The new scheme has just started I'll see if I can find out the latest details on our website.
------------- Dogs die in hot cars!
They also die if you leave them in the freezer.
Please keep your dogs at room temperature!
I just checked and on £600 I'd save about £163. Not as good as it was before when you saved all the tax and NI. Better than a punch in the face though if you want a bike
------------- Dogs die in hot cars!
They also die if you leave them in the freezer.
Please keep your dogs at room temperature!
I looked into it with my employer but it didnt really workout as a big enough saving unless you wanted an interest free loan.I could make bigger savings getting the same bike in the sales because the scheme doesnt let you buy them at sale price only rrp.
My husband did it through his workplace and he bought a sale bike.
He also got it tax free, he chose the bike he wanted, got relevant paperwork from his employer took to outlet and paid over 12 months with his employer chipping in a percentage not sure what the percentage was but think it equated to about £80ish (his bike was just over £500 in sale)the cost came off his wages weekly so he didn't really notice it. he's had it over 2 years now and is healthier and slimmer and we save on petrol costs as he no longer takes car unless very windy.
All employers schemes are different, but if you are going to use it, its a great way to get a good bike at a reduced price. He was one of the first in his workplace to take on the scheme and since then alot of his colleagues have done the same.
------------- I'm working class, I do what I have to do, to get by.
When I worked for Sky, some years back I took advantage of the bike to work scheme, I bought a £1000 bike and Sky chipped in £500 towards it's purchase, or rental should I say, which was the max at the time.
The ironic thing though is, that I was a field rep with Sky at the time, doing around 40k business miles per year in a company car, so the bike was only ever used for personal use.
Anyway a year on from getting the bike, I got made redundant from Sky along with 1200 other folk, who's job's had been out sourced to agencies.
I still have the bike, and Sky never asked for any money back at the end, even in the T&C's it did say, a residual settlement would be asked for, or the bike could be returned to the owner, in this case Sky.
It's a great bike which I had custom made in Xian China by Tilon, all Titanium frame and handlebars, forks are Pace RC1 Carbon Fibre Rigid, Hope Mini-Disc up front, and gearing taken care of by a SRAM P7 Spectro 7 speed internal gear hub c/w with Drum brake.
My Son 27 now uses the bike to commute to work and back, the bike is seven years old and runs as new, so thanks to Sky for that.
OH has this scheme at work - he ended up going up to the maximum (including accessories) as the lesser priced bike he originally chose wasn't available. For him it works out great as he pays £45ish a month and at the end of the 12 month repayment period he is gifted the bike. Best thing is that as soon as he's finished paying off his bike in Jan 2013 then I can also take up the same deal through his company!
I believe from reading other forums that if your company gift the bike to you after the hire period, that you have to pay income tax on 25% of the original price of the bike.If so it still seems like a good deal.
I just have to clarify with my employer what they will do at the end of the 12 month period before i make a decision.
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Topic: Bike to Work Scheme
