cycle scheme - con trick? advice needed please.

custardy

jimmo wrote: »

The way I read custardy's quote in post #2 is that when a Royal mail employee gets a new bike under their scheme there is a £35 delivery charge. Fair enough, but when the rental period ends there is another £35 charge but that is for collection, presumably by Royal Mail and disposal, presumably by Royal Mail.
There is nothing I can see to indicate how much the Royal Mail employee would need to pay to actually buy the bike at the end of the hire agreement.

nope
its a final payment of £35
thats it
they dont collect the bike though i suppose they could if they wanted
the whole scheme is done through Halfords(though some stores will accept the vouchers)

John_Pierpoint

custardy wrote: »

is the 25% not on the market value at the time the hire period ends?
so its not going to be £250

heres the breakdown for the Royal Mail set up (this is £500 as its their max)

Total Gross Costs
18 Monthly Gross Salary Reductions of: £ 24.51
Collection and Disposal Charge: £ 35.00
Total Salary Sacrifice with Collection and Disposal Charge: £ 476.29
No advance payment is required. You hire a bicycle and bicycle safety equipment for a fixed period of 18 months. At the end of the Period of Hire you will be charged a collection and disposal fee of £35 (from net pay).
Total Lower Rate Taxpayer Costs
18 Monthly Net Salary Reductions of: £ 16.91
Collection and Disposal Charge: £ 35.00
Lower Rate Taxpayer Total: £ 339.38

they charge a flat £35 so obviously it makes it an easier calculation

Is this a bike used for delivering letters or just for getting to work?

custardy

John_Pierpoint wrote: »

Is this a bike used for delivering letters or just for getting to work?

private use
RM provides its own bikes for work use (well these are going but for the purpose of this thread)

saverdude

Just read more small print and checked out valuation table. It appears that if you want to transfer ownership of the bike after 12 months, it costs 250. But you can sign an extended user agreement for 36 more months at a cost of 7% deposit - £70 in other words, but no more monthly payments need to be made. The valuation shows that after 4 years the final value is also 7%, but the cycle scheme won't require any more payment. So in effect it looks like the deposit is the 4 year final payment on all but name.

If all told I have sacrificed £1010 from my gross salary for a 1k bike, what is my overall saving? Is it as I reckon about 31% or 310 notes?

What are the tax implications after the first 12 months, even if you don't make further payments?

Valli

at least your boss didn't stick the memo on the staff notice board having annotated it 'free bikes'.

*wonders if boss READ the notice*

custardy

saverdude wrote: »

Just read more small print and checked out valuation table. It appears that if you want to transfer ownership of the bike after 12 months, it costs 250. But you can sign an extended user agreement for 36 more months at a cost of 7% deposit - £70 in other words, but no more monthly payments need to be made. The valuation shows that after 4 years the final value is also 7%, but the cycle scheme won't require any more payment. So in effect it looks like the deposit is the 4 year final payment on all but name.

If all told I have sacrificed £1010 from my gross salary for a 1k bike, what is my overall saving? Is it as I reckon about 31% or 310 notes?

What are the tax implications after the first 12 months, even if you don't make further payments?

according to the salary calculator
£1k a month would give a take home of £876.83
does that work?

John_Pierpoint

custardy wrote: »

private use
RM provides its own bikes for work use (well these are going but for the purpose of this thread)

If you could use your salary sacrifice bike for delivering letters, then the employee delivering letters could claim and expense of 20p a mile, worth 45p in your pocket

http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm#x1

custardy

John_Pierpoint wrote: »

If you could use your salary sacrifice bike for delivering letters, then the employee delivering letters could claim and expense of 20p a mile, worth 45p in your pocket

http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm#x1

never gonna happen
bikes need to be specifically adapted
as I said bikes deliveries are going/gone

John_Pierpoint

Very carbon friendly?

custardy

John_Pierpoint wrote: »

Very carbon friendly?

lol dont get me started
a fleet of bikes and foot deliveries
replaced by 2 staff in small vans
so my old office is around 100 staff
in ye olde days with ans accelerating foot staff out
it ran about 9 large vans(including all the firms deliveries)
now its about 50 small vans