Bike for a returnee?

To be fair to Halfords (this hurts, it really does!) their bikes are usually very good value for money particularly within the 1000 pound bracket as the Boardman and Voodoo bikes offer a lot of spec for the money. The downside is the service which can be of a varying standard dependent on the store.

I do agree with your post in general though, I've not been able to use a cycle to work scheme but from what I've read the benefits seem to be much less than they used to and these it largely amounts to an interest free loan as it's possible to get decent discounts yourself. As you say buying last year's model (which may be only different in frame colour) can often be substantially cheaper.

John

fred246 wrote: »

My observations on CTW scheme:
You have to use a specific shop (normally Halfords) which are normally not the cheapest.
At the end of the scheme you are supposed to pay 'market value' for the bike. Most employers seem to charge a minimal amount but i's worth checking.
People seem to think they have to pay £1000 for the bike because that is the maximum. They get a really posh bike without adequate security, get them stolen and then have to pay the rest of a year for a bike they don't have. You don't need to spend £1000 to get a good commuting bike.
Salary sacrifice is money saving for the employer so they like it. However many people's pension is based on their salary, so buying things like this will reduce your pension. Unlike a salary sacrifice car, the effect should be minimal, but worth thinking about.
I recommend buying last year's model of bike online where there are good savings to be made.

Much of this is incorrect I am afraid

1) You DO NOT just have to use Halfords nor is it "normal" - Cyclescheme is the biggest and you can use their vouchers all over.

Depending on your firm, you use whichever store(s) goes with your scheme - Halfords scheme is Cycle2Work but there are also Cyclescheme (can use at Evans or Wiggle for example), Bike2Work, Evans Ride-to-Work etc.

Many LBS accept the vouchers for the Halfords schemes (my local one does for example).

2) While the Halfords scheme seems to imply your employer can charge you market value for the bike after 12 months, the other schemes do not, there is no requirement to pay a huge amount for the bike. As I posted earlier, Cyclescheme (the one I used) lets you "rent" the bike for 3 years for a deposit, the Evans scheme is the same as is the Bike2Work scheme- after that they either keep the deposit or let you return the bike and get your deposit back

3) People can choose up to £1000 - it's not the fault of the scheme if they don't read stuff properly! You can put a lock on the voucher too.

4) Any employer encouraging people to cycle should provide safe facilities and you can cover the bike on your home insurance - often for nothing

5) Salary sacrifice of 50-60 quid a month for 12 months is not going to make a huge difference in the scheme of a 40+ year working life

6) You can buy last season bikes on the Cycle scheme - including using online retailers

Please, research these things properly before putting people off with scaremongering

fred246 wrote: »

The CTW scheme is actually very complicated. You need to read the HMRC documentation.
In reality you can only use the retailers that your employer tells you too. You can request that they order a bike especially for you - but you can't really say "I want a special bike ordering - last years with 40% discount".


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I have read the documentation and gone through the process before, I am simply pointing out your statements are not reflected in the way the scheme works, indeed, your experience seems to be completely against what the scheme is about. It might be the case in the Halfords scheme but this is not the only one running.

SOME employers might force you to use one specific shop, but the biggest scheme (Cyclescheme) can be used at any vendor that accepts them, you simply get the certificate and present it at the shop you want. You can use a Halfords voucher at a shop that accepts the voucher.

How could an employer force you to buy a specific bike?

The process is simple -

Go to shop that accepts the voucher
Get a price for the bike and the quote done
Fill in paperwork and request certificate
Collect bike

At what point is there an option for the employer to say you have to have a specific bike? If you could only afford the payments for a £500 bike or £300 bike then how are they going to enforce the bike choice?

At the end of the loan the employer doesn't have to sell the bike (though they always do!). They are supposed to sell at market rates determined by HMRC (although most employers seem to sell for tiny amounts against HMRC guidance).

Again this is completely wrong for the main schemes (Halfords seems to be the exception), it is one of three options offered by the scheme, not the only one. The FMV sale rule came in as HMRC thought people were using it as a tax dodge so the scheme operators ( any of the main schemes (cyclescheme, bike2work etc)) came up with the options of an extended rental, returning the bike or purchasing.

http://www.cyclescheme.co.uk/help/faqs/end-of-hire
http://www.bike2workscheme.co.uk/faqs/
http://www.evanscycles.com/ride-to-work/faqs

I thought I would wait to see what would happen at my workplace before I got a bike. Suddenly there were £1000 shiny new Halfords bikes everywhere that promptly got stolen! One of them was even left with a thin cable lock which didn't even go through the bike. I told security but they wouldn't even listen to me

That's personal choice though, not the fault of the cycle scheme, if I buy a £5000 bike tomorrow and tie it up with string it's my own fault, no-one elses. Your firm clearly doesn't care for cyclists if they are forced to go to Halfords, cannot buy a previous season bike and forces you to pay the FMV rate at the end of the year and doesn't provide any secure bike bays.

Richard53 wrote: »

This is what I meant when I said it seemed a lot of hassle for little benefit. Taking your figures (which wouldn't be far off mine if I chose to do this):


Net salary sacrifice £34.85 x 12 months = £418.20
After one year, pay for full ownership £153.99
Total cost £418.20 + £153.99 = £572.19
Total cost of bike £615, less £572.19 paid = £42.81 savings.


I could probably beat that easily just by shopping around, to be honest. Even if you go down the route of paying a deposit of £43.12, the overall benefit is only £153.68, which is nice to have but then you don't own the bike fully until it is 4 years old. What if I move job/get made redundant/want to sell the bike within that 4 years? Back in the days before they changed the rules and you could buy the bike for a nominal sum at the end of 12 months, I think the scheme was a great idea and very good value, but the change in HMRC rules pretty much closed it off as an option for me.

I'm going to sign off this post now, it's beyond silly, I don't understand what part of the "you don't have to buy the bike after 1 year" bit people are failing to grasp, so I will restate it:

In the main schemes YOU DO NOT HAVE TO BUY THE BIKE AT MARKET VALUE AFTER ONE YEAR

Purchasing the bike is ONE option of THREE (a tax efficient extended rental or returning the bike for a market value refund are the other two).

I bought a £550 bike plus lights to a value of £615
It cost me £418.20 + deposit of £43.12 = £461.32
I saved £153.68

I paid £418.20 via salary sacrifice and a 3 year "rental" of £43.12 meaning it saved me £153.68 i.e. 25%. The bike DID NOT cost me £153.99 at the end of the year as I DID NOT NEED to take that option.

Who cares if you "don't own the bike" for 4 years - if you get a car on PCP you "don't own" it until your final balloon payment, does that mean no-one should use PCP?

If you leave your job during the initial year you have to pay the remaining balance without the tax benefit.

After the year is up the cycle scheme "own" the bike not your employer so if you move jobs or lose your job NOTHING HAPPENS - you have paid your deposit, the bike is yours to sell as you wish - at the end of the 3 year period you would simply let them keep the deposit.

Again, I am not going to respond further, I saved 25% on a bike, I am going to get a winter commuting bike on the scheme this year, anticipating spending approx £1000 on the bike

The bike will cost me £679.99 and the rental will be £70 meaning a total cost of £749.99 i.e. saving of £250

There is no way to lose on this scheme unless you leave your job in the first month of taking on the scheme or you opt to buy the bike after one year instead of the rental (and even then you still save a little)