Cycle Schemes - are they still worth it?

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Ru88ell
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Cycle Schemes - are they still worth it?

Postby Ru88ell » 12 Jan 2015, 11:17pm

My wife's workplace is now offering the Evans Cycle to Work Scheme. Are these things actually worth doing these days, or has the government killed it off by introducing the final valuation payment?

profpointy
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Re: Cycle Schemes - are they still worth it?

Postby profpointy » 12 Jan 2015, 11:25pm

Ru88ell wrote:My wife's workplace is now offering the Evans Cycle to Work Scheme. Are these things actually worth doing these days, or has the government killed it off by introducing the final valuation payment?


I'd be dubious with the new rules. Given the shop will (have to) charge you extra (either explicitly as did mine, or by not giving a discount, or by having to pay a middle man), and the final payment is now more like a realistic value, the saving isn't that great - perhaps little more than just getting it interest free - and if you can't afford to buy a bike cash, you're presumably not on 40% tax, hence saving are very marginal indeed, so it's a lot of forms and hassle to save not very much. You are at least somewhat limited in who to buy from, hence what models, can't spend more than a grand, and are rather in limbo if you leave the company before the 2 years are up. 2nd hand isn't allowed either, nor is a major re-fit / upgrade of an existing bike.

Though I did OK from the deal a few years back, don't think I'd bother now

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Re: Cycle Schemes - are they still worth it?

Postby PH » 12 Jan 2015, 11:48pm

Isn't there some work round for the final valuation that satisfies the tax people? haven't they changed the date that the bike transfers ownership to a couple of years later so the value is a lot lower?
If I was going to but a bike I think I'd use it if offered, but I wouldn't be tempted to get another bike because of it.

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[XAP]Bob
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Re: Cycle Schemes - are they still worth it?

Postby [XAP]Bob » 13 Jan 2015, 8:08am

There is no reason that the company should be obliged to sell you the bike straight away.

And of course they can give you the bike (although you'd be taxed on final value)

Alternatively they can retain nominal ownership and you can carry on riding it, right up until it's value is truly negligible according to your company accountants...
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Ru88ell
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Re: Cycle Schemes - are they still worth it?

Postby Ru88ell » 13 Jan 2015, 8:40am

I bought a folder on the Cycle Scheme many years ago, and I think I paid a nominal £5 at the end of the 12 months. It was straightforward to be able to work out the financial benefit. They do seem to have trashed the original good intention, and I'm at a loss as to why people bother with it now. In the Evans blurb it says, "At the end of the salary sacrifice term there will usually be a transfer of ownership, however there is no promise or obligation that employees will own the equipment after the salary sacrifice term."

I'm sure that any cycle club discount in conjunction with a 0% credit card is far less risky, less time consuming and more flexible.

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TrevA
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Re: Cycle Schemes - are they still worth it?

Postby TrevA » 13 Jan 2015, 12:35pm

You can still save around £200 on a £1000 bike by using a Bike to work scheme, if you continue to rent the bike after the initial 12 months (you then make a one off payment of 7% of the original value, instead of 25% if you buy it outright). You also have the benefit of paying by monthly instalments. I've bought 3 bikes on the Bike to Work scheme (the latest about 18 months ago) and whilst the savings aren't as good as they once were, they are still worthwhile (so long as the shop doesn't charge you for the privilege of using the scheme - I don't think Evans do).

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honesty
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Re: Cycle Schemes - are they still worth it?

Postby honesty » 13 Jan 2015, 12:53pm

Yes and no. I administer the scheme for my work and the following thing are worth noting.
Shops can charge a fee up to 10% for doing a scheme. This is because the people managing the scheme (Cyclescheme, etc) charge a fee to the shops. Some shops soak the cost, others will pass this charge on to you. The other downside of this is you usually dont get discounted prices (or price matched prices)
On normal tax rates you will save 32% off the price of the bike initially charged.
What happens at the end of the scheme is complex and all to do with skipping around the tax regulations. You have 3 options
1. Hand the bike back. no further charge
2. pay a fee to take ownership of the bike. this is 18% of the original voucher value if it was under £500 and 25% if over £500
3. take a convoluted extended hire agreement out with the provider for a one off charge of 3% of voucher amount for under £500 or 7% for over. There are no further monthly charges. Then at the end of the extended period the scheme controller gives the option to hand the bike over to you and retain the fee, or refund the fee and take the bike.

So following that through you usually save about 25% on the initial voucher value. If you can get discounts by buying each part its not going to be cost affective. This discounts one massive benefit of going through the scheme though - you pay a small amount each month rather than the full amount up front.

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Re: Cycle Schemes - are they still worth it?

Postby SteveHunter » 13 Jan 2015, 1:08pm

I looked at our Cycle to work scheme when buying a hybrid for commuting last year. It worked out cheaper for me to buy the 2013 model of the 2014 bike that they were offering on the scheme, and I got a better spec'd bike as well by doing that. Of course I had to pay up front though.

Ru88ell
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Re: Cycle Schemes - are they still worth it?

Postby Ru88ell » 13 Jan 2015, 1:14pm

SteveHunter wrote:Of course I had to pay up front though.


Which is where the 0% credit card comes in. Find the bike and accessories you want, negotiate a great price / utilise club discount card, pay with 0% card, set up D/D or regular transfer payment over 12 months.

I'm sure that's what we'll do, and by promoting the idea to others at work my wife may get Stourbug some new members.

Thanks for the contributions though.

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Re: Cycle Schemes - are they still worth it?

Postby PH » 13 Jan 2015, 1:31pm

honesty wrote:Yes and no. I administer the scheme for my work and the following thing are worth noting.


Some good detail there honesty
Do some companies treat the VAT differently? The offer from my employers looks as you describe, but a friend seems to have got a much better deal.

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Re: Cycle Schemes - are they still worth it?

Postby PH » 13 Jan 2015, 1:33pm

Ru88ell wrote:Which is where the 0% credit card comes in. Find the bike and accessories you want, negotiate a great price / utilise club discount card, pay with 0% card, set up D/D or regular transfer payment over 12 months.



I suppose it'll depend on what discount you can get, a friend used C2W to buy a Brompton which I don't think get discounted much.

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honesty
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Re: Cycle Schemes - are they still worth it?

Postby honesty » 13 Jan 2015, 1:33pm

Yes if the company is vat registered I think. Were not so I don't know... Oddly you also save more if you earn more. Higher rate tax payers save something like 40%.

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Re: Cycle Schemes - are they still worth it?

Postby mike_dowler » 13 Jan 2015, 3:11pm

I bought a Brompton (approx £950) as a higher rate taxpayer. Left at the end of the year and was taxed on a nominal value of £250. So, I saved the tax on £700 of the cost.

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Re: Cycle Schemes - are they still worth it?

Postby The fat commuter » 13 Jan 2015, 3:49pm

I didn't realise that the scheme had changed. I'm after a new bike - seen one around the £750 mark and would need panniers and mudguards - so just over £800. I thought that with a 42% saving this would knock the cost down to under £500. The downside for me was having to wait until the end of the year as our scheme is open between November and January - finished now.

I'll have to see if there is any info anywhere at work. They did have a 'benefits' day at work a couple of months ago and someone from Evans was there. He didn't know that much about it - mentioned a nominal payment at the end of the term of probably £1 to buy the bike - but nothing else. That said, this was in November.

This maybe good news in a way for me :? - although I'll not be saving £300+, I could pick up my new bike earlier. I was looking at using Edinburgh Cycles (not actually sure if they do C2W) and am now wondering whether just going for it and getting the bike and negotiating a small discount may be better.

Will have to start doing my homework now to see if the bike that looks good on paper is actually suitable - thought I had another 10 months to choose.

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foxyrider
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Re: Cycle Schemes - are they still worth it?

Postby foxyrider » 13 Jan 2015, 4:12pm

Its not simply finding out if the shop you want to use does cycle scheme, its whether your employer is signed to a scheme they work with. We supply through @ a dozen Cycle scheme providers but there are still others we don't deal with, its vital for the shop to know which scheme you are buying through as they each have different requirements and schemes like Evan's are only available through their store (Halfords scheme can sometimes be used in other stores, check with your shop!)
Convention? what's that then?
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