is c2ws now pointless
- Thread starter surfdude
- Start date
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Yes - there are pages and pages on this topic on this site 
It's not that bad - you don't have to pay back 25% at the end - but the tax man may want their share of the tax savings on the amount of the %25 you don't pay.
Eg. You buy a £1000 bike and pay £600 for it.
At the end, you pay your emloyer 5% (£50) to take ownership.
Taxman says 'you should have paid £250 for it! You made £200 tax-free there'!
And then claim the tax on £200 - which would be £50-£80 depending on tax bands.
So you pay about £700 for a £1000 bike.
It's not that bad - you don't have to pay back 25% at the end - but the tax man may want their share of the tax savings on the amount of the %25 you don't pay.
Eg. You buy a £1000 bike and pay £600 for it.
At the end, you pay your emloyer 5% (£50) to take ownership.
Taxman says 'you should have paid £250 for it! You made £200 tax-free there'!
And then claim the tax on £200 - which would be £50-£80 depending on tax bands.
So you pay about £700 for a £1000 bike.
Yes - there are pages and pages on this topic on this site
It's not that bad - you don't have to pay back 25% at the end - but the tax man may want their share of the tax savings on the amount of the %25 you don't pay.
Eg. You buy a £1000 bike and pay £600 for it.
At the end, you pay your emloyer 5% (£50) to take ownership.
Taxman says 'you should have paid £250 for it! You made £200 tax-free there'!
And then claim the tax on £200 - which would be £50-£80 depending on tax bands.
So you pay about £700 for a £1000 bike.
my employer has said to take ownership of the bike it will be 25% soon not the 5% its is at the moment . am i beening dence here ?
Flying Dodo
It'll soon be summer
If you look at the other topics about the scheme, these confirm what HMRC are doing, in imposing stricter guidelines. Basically they're saying firms shouldn't have been automatically stating 5%.
Under the new published criteria, it would only be 25% at the end of 12 months if the bike is in immaculate condition, and a lower price couldn't be justified compared with similar second hand bikes. However, the bike doesn't have to be be bought back by the employee at the end of the period. If it's left 3 years, then it certainly won't be worth 25%!
Under the new published criteria, it would only be 25% at the end of 12 months if the bike is in immaculate condition, and a lower price couldn't be justified compared with similar second hand bikes. However, the bike doesn't have to be be bought back by the employee at the end of the period. If it's left 3 years, then it certainly won't be worth 25%!
battered
Guru
Not all C2W schemes are created equal. If your employer wants 25% on closure then you are within your rights to say "bollocks then" and buy a bike of your own choosing.
TBH if you are mechanically savvy then you can buy a SH bike a year old for half its new price and this is cheaper than C2W on the same bike. My commuter is donkey's years old, I can't wear the bloody thing out and I keep it running on the bits box, which is in turn topped up by bits that mates give me and other stuff that's floating about.
TBH if you are mechanically savvy then you can buy a SH bike a year old for half its new price and this is cheaper than C2W on the same bike. My commuter is donkey's years old, I can't wear the bloody thing out and I keep it running on the bits box, which is in turn topped up by bits that mates give me and other stuff that's floating about.
GrumpyGregry
Here for rides.
no density involved. If they don't charge you the 25% (assuming tip top nick, and tbh how many year-old £1k rrp bikes get sold on eBay for less than £250? so that seems real to me) they have created a taxable "benefit in kind". You have to pay the tax as explained above. They have to explain to your non-cycling non-scheme member work colleagus why they are giving you this benefit. Not very equitable so easier just to charge the £250.
My take, as a scheme 'addict'. From now on just look on it as a 0% interest 'loan' to let you buy a bike.
Moodyman
Legendary Member
TBH if you are mechanically savvy then you can buy a SH bike a year old for half its new price and this is cheaper than C2W on the same bike.
Agree. Even better if you can get a new 2/3 year old model being offloaded to make way for new stock.
Bought one of my new commuters (2007 model) in late 09 at 40% of the 2010 model's price. In fact, the 07 model had better components than the 2010 one.
Agree. Even better if you can get a new 2/3 year old model being offloaded to make way for new stock.
Bought one of my new commuters (2007 model) in late 09 at 40% of the 2010 model's price. In fact, the 07 model had better components than the 2010 one.
Cyclist33
Guest
- Location
- Warrington
As far as I know HMRC have given a grace period until 30 September 2010 so the 5% still applies if you get your order approved by then, so get to it!
Stu
Stu
CounterfeitKelly
New Member
One of the problems with C2W is that it can seriously affect your working tax credit if you're on a low income/tax band. It looks like you can save 40% odd on the price of a new bike and spread it over 12 or 13 months (effectively the interest free loan manged above) but then lose part or possibly all of the working tax credit you might be eligible for (which renders all the savings moot). A mate of mine at the place I work has found this out, luckily before he signed up for vthe scheme...
Banjo
Fuelled with Jelly Babies
- Location
- South Wales
Personally i wouldnt bother with C2W now. Chatting to my LBS manager about it he said that numbers using it have dropped dramatically.
If your able to take out a creditcard that offers interest free for 6 months and then shop around for the best deal on the bike (something you cant allways do on C2W) .Split the cost by 6 set up a direct debit so you dont miss a payment and incur interest charges then go enjoy your bike.
If your able to take out a creditcard that offers interest free for 6 months and then shop around for the best deal on the bike (something you cant allways do on C2W) .Split the cost by 6 set up a direct debit so you dont miss a payment and incur interest charges then go enjoy your bike.
MacB
Lover of things that come in 3's
- Location
- Farnborough, Hampshire
Yep, I think the 'good times' are over on this one, as Greg says it's handy as an interest free loan but not much beyond that. The headline savings have always been offset by the fact that it's generally full retail you're paying, rarely an opportunity to avail yourself of any deals or discounts. Add in a fair valuation after 12 months and it's really of little benefit. As Banjo mentions, an interest free deal on a credit card could save you more as you become a cash purchaser.
threebikesmcginty
Corn Fed Hick...
- Location
- ...on the slake
I told my employers the scheme was so good they should take advantage of it before the gov't realise and scrap it.
Just as well my years of battling with them to introduce the scheme came to nothing then, the tight bastards.
Just as well my years of battling with them to introduce the scheme came to nothing then, the tight bastards.
I don't think this is right at all I'm afraid. These aren't 'new' rules being introduced, so there's nothing changing, therefore there are no 'grace periods' or deadlines as such. It's possible that HMRC could go after someone for benefit in kind (say if they paid 5%) even though they bought the bike a year or more ago.
I got my C2WS bike last December, but I'm still very much likely to be charged 25%.
