CYcle to Work Scheme - who pays what, when?

Hi, have a look at
http://www.dft.gov.uk/stellent/groups/dft_susttravel/documents/page/dft_susttravel_038228.hcsp
as I think this should give your employer the information needed to start
the scheme...

I took out a voucher for £550 this year payable over 18 months with the
deduction coming off before the tax and NI contributions, a saving of around
48% (employer takes a few percent to "manage" the system). My voucher was
for halfords. They will get you any bike, although you'll pay the retail
price.

Hope this helps

Regards

Cj

"BB" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

I'd love to do this scheme with my company to get a brompton at around
£500, but am confused -

I know that the employee has to take some sort of salary "deduction"
for a period, but what does my company have to pay and when? Do they
pay for the bike monthly, or a sum up front to the bike shop?

BB of NTL said:

I'd love to do this scheme with my company to get a brompton at around
£500, but am confused -

I know that the employee has to take some sort of salary "deduction"
for a period, but what does my company have to pay and when? Do they
pay for the bike monthly, or a sum up front to the bike shop?

They can do either, depending on the bike retailer/scheme organiser. Take a
look here for more information:
http://www.cyclescheme.co.uk/
--
Steph Peters
Chorlton Wanderers Cycling Group
Monthly slow and easy rides from South Manchester
http://www.sandbenders.demon.co.uk/cycling/chwan.htm

Steph Peters said:

They can do either, depending on the bike retailer/scheme organiser. Take a
look here for more information:
http://www.cyclescheme.co.uk/

Top be honest, that site doesn't say that they CAN pay for it monthly.
The other site offered by the poster above suggests they CAN'T.

I'll be honest guys, after reading both those sites, I'm still in need
of an easy to use guide to who pays what, when.

Thanks for trying.

BB said:

I'd love to do this scheme with my company to get a brompton at around
£500, but am confused -

I know that the employee has to take some sort of salary "deduction"
for a period, but what does my company have to pay and when? Do they
pay for the bike monthly, or a sum up front to the bike shop?

They pay it up front, imediatly claim VAT back, and then they own the
bike until you finish paying it off.

Most companies that is. The company I work for (a large national
broadcaster with a unique way of funding) is happy to give interest
free season ticket loans of £3k a year, but:

"The bicycle scheme requires the employee to agree to a change in
contractual terms and conditions reducing GROSS pay in exchange for the
provision of a bicycle for a fixed period of time. It is then free from
tax and National Insurance if it is used mainly for home to work
travel.

"Unfortunately, this requirement for contractual change cannot be
accommodated within our current systems and a change in existing
systems or a new system would mean further cost and investment required
by the <CORPORATION>. We are exploring this to be able to introduce
more flexibility in benefit provision. However, disappointingly, the
recent Budget proposed immediate closure of similar schemes for
computers and mobile phones so we will need to have other business
reasons to support the investment into systems and could not support
such an investment case for the bike scheme alone."

Top boss says "As a cyclist myself", of course on £600k a year you're
not really bothered about saving £200 in tax -- about 40 minutes
"work".

Paul Weaver said:

"Unfortunately, this requirement for contractual change cannot be
accommodated within our current systems and a change in existing
systems or a new system would mean further cost and investment required
by the <CORPORATION>. We are exploring this to be able to introduce
more flexibility in benefit provision. However, disappointingly, the
recent Budget proposed immediate closure of similar schemes for
computers and mobile phones so we will need to have other business
reasons to support the investment into systems and could not support
such an investment case for the bike scheme alone."

How about the child care vouchers under the same scheme? BBC not family
friendly? sure they'd love that.

...d

BB said:

I'd love to do this scheme with my company to get a brompton at around
£500, but am confused -

I know that the employee has to take some sort of salary "deduction"
for a period, but what does my company have to pay and when? Do they
pay for the bike monthly, or a sum up front to the bike shop?

The finer workings of the scheme seem to vary. I am about to take
advantage of the scheme newly offered by my employer (a national
charity)to replace my broken recumbent. I can get my bike from any cycle
dealer, I just have to get paperwork to show the name of the dealer and
the cost of the bike. The loan is for up to £500, and employees can add
to that if they wish. A cheque will then be sent to me, made payable to
the dealer. I believe my employer can then claim VAT back, and the money
will be deducted from my gross salary over 12 months. There are a few
phrases about the bike being to get to work, and the need to purchase a
h****t, but I don't think that will be taken too seriously!
Jo

Jo said:

A cheque will then be sent to me, made payable to
the dealer. I believe my employer can then claim VAT back, and the money
will be deducted from my gross salary over 12 months.

You sign up for the scheme, and a cheque made out to the bike shop is
sent to you?!?!

So, your employer not you pay anything up front?

Have I got that right, or is my brain missing anything?

BB said:

Jo said:

A cheque will then be sent to me, made payable to
the dealer. I believe my employer can then claim VAT back, and the money
will be deducted from my gross salary over 12 months.

You sign up for the scheme, and a cheque made out to the bike shop is
sent to you?!?!

So, your employer not you pay anything up front?

Someone's got to buy the bike. I don't understand what you don't
understand (though I can't precisely parse your last-quoted sentence).
Any salary sacrifice repayment scheme has the additional benefit (to
the employee) of an effectively interest-free loan for the bike
purchase (at least, the employer could charge you interest, but I've
never heard of one that does). It's not normally factored in, but
it's there none the less.

regards, Ian SMith
--
|\ /| no .sig
|o o|
|/ \|

BB said:

Jo said:

A cheque will then be sent to me, made payable to
the dealer. I believe my employer can then claim VAT back, and the money
will be deducted from my gross salary over 12 months.

You sign up for the scheme, and a cheque made out to the bike shop is
sent to you?!?!

So, your employer not you pay anything up front?

Have I got that right, or is my brain missing anything?

Not quite sure what you don't understand. My employer gives to me a
cheque which is made payable to the dealer who is supplying the bike. I
give this to said dealer in payment. Employer then takes from my pay one
twelfth of the cost of the bike each month for twelve months. I gain
because the loan is interest free, and the repayments are deducted from
my pay before tax. My employer gains because they can claim back VAT.
Jo

BB said:

So, your employer not you pay anything up front?

Have I got that right, or is my brain missing anything?

It are not raining here also.

?

Jo said:

Not quite sure what you don't understand. My employer gives to me a
cheque which is made payable to the dealer who is supplying the bike. I
give this to said dealer in payment. Employer then takes from my pay one
twelfth of the cost of the bike each month for twelve months. I gain
because the loan is interest free, and the repayments are deducted from
my pay before tax. My employer gains because they can claim back VAT.
Jo

Employer also gains because they don't pay NI (deductions are made from
gross salary, not net).

In addition, as the legal owner of the asset the employer can
depreciate it through the P&L and hopefully save some tax, although I'm
not sure what capital allowances are on bikes.

Basically it's a win-win situation courtesy of Gordon Brown, and should
therefore be taken full advantage of.

Darth.

Darth. twisted the electrons to say:

Quoted message said:

Basically it's a win-win situation courtesy of Gordon Brown, and should
therefore be taken full advantage of.

.... though based on the fate of the similar computers for homes scheme, I
suspect that if enough people/companies take such full advantage then the
treasury will decide it's too expensive and can the scheme.

Or to put it another way get in quick whilst the going's good!
--
These opinions might not even be mine ...
Let alone connected with my employer ...

Al C-F said:

BB said:

So, your employer not you pay anything up front?

Have I got that right, or is my brain missing anything?

It are not raining here also.

Yup, my brain was missing something that day.

Jo said:

BB said:

Jo said:

A cheque will then be sent to me, made payable to
the dealer

Quoted message said:

Quoted message said:

You sign up for the scheme, and a cheque made out to the bike shop is
sent to you?!?!
So, your employer nor you pay anything up front? (corrected "not" to "nor".)
Have I got that right, or is my brain missing anything?

Quoted message said:

Not quite sure what you don't understand. My employer gives to me a
cheque which is made payable to the dealer who is supplying the bike.

Sorry, my sentence got messed up a little wwith a one letter mistype:-

You said "A cheque will then be sent to me, made payable to the
dealer", and I (tried to!) ask "So, your employer nor you pay anything
up front?"

But you've now clarified that it's the company, and not the govt that
gives you this cheque.... thanks!