CTW scheme, how successful

[Broadside]

No. No. No.

£35/month for 12 months.

Then pay a £50 deposit once which extends the hire for 37 months. £50 once, not 37 times.

£470 total cost. The bike remains the property of Cyclescheme in my case, then at the end the ownership will transfer to me. HMRC do not own the bike at any point.

 

[ComedyPilot]

Aha

I did say it was to a thicky.

 

[Broadside]

I umm'd and ahh'd about joining the scheme for a long time - I was silly really as it is great. I would suggest you dive in if your employer offers it.

 

[ComedyPilot]

Silly Question time. (you'll wish you hadn't answered me, I bet?)

The employer 'buys' the bike.

The employee 'sacrifices' salary to pay a 'hire' fee.

12 months later, the bike is 'possibly' offered to the employee for a nominal fee.................so where does Cyclescheme come into it?

 

[Norm]

Cyclescam are a third party company which administers the scheme for very lazy employers.

Also, the details above are of one particular scheme. There is no single cycle to work scheme, much depends on the specifics of your own employers implementation and interpretation of the guidelines.

 

[Broadside]

My employer outsources administration of the scheme to Cyclescheme. So my employer doesn't own my bike, Cyclescheme does. There is some sort of agreement where my employer pays money to Cyclescheme to effectively pass on the money from the salary sacrifice.

My contract for the bike is therefore with Cyclescheme, so if I move jobs then I can hang on to the bike. In the case of a large company it's quite a neat solution for an employer to outsource it.

 

[ComedyPilot]

So, where is the benefit to my employer, other than being in the priviledged position of buying me a new push rod for 700 nicker, and I pay 470 back?

 

[Norm]

When using cyclescam, not as many as there could be.

If your employer bought the bike and administered the scheme itself, it could reclaim the VAT, their NIC's will be reduced and they've locked you in for at least 12 months because if you leave before then, you say goodbye to the bike and any rental payments you've made.

 

[Bikeabit]

My employer (public sector) runs a scheme. However, it set limitations. For example, I can only buy a bike from Halford's and in these days of recession has decided that the final lump sum payment at the end of the hire purchase period (I would 'own' the bike on day 366) is really the market value rather than the nominal sum it used to be. Their interpretation of market value was a third of the cost price.

I decided that on the basis of my personal tax situation, wanting to buy a bike I actually wanted, the ability to negotiate a small discount for cash, and for me most importantly owning the bike from day one, I would go it alone.

Everyone's circumstances will be different and I am sure it is a good scheme for some but I would go in with eyes wide open and, if you can afford it, compare it with what sort of cash discount you can get from your LBS.

The scheme also excludes the self-employed, non-waged and retired and maybe a better financial incentive to using bikes as a car alternative would be to reduce or remove VAT from new bikes.