Bike to work scheme 2016

Wallaby84

Hi
I'm sure this has been covered before but I can't find a recent thread
Is the scheme still any good in 2016 or is it better just to buy a bike outright or even on 0% finance/0% credit card? I'm a basic rate tax payer. I've read a lot of articles on cycling websites all giving different opinions so was hoping to hear from people who had actually done it. I do cycle to work occasionally and ride my bike socially so it's just the cheapest/best way to get a new bike!

Nasqueron

With the tax saving (your payments come out before tax you so you pay less tax) you effectively save around 30% off the bike cost, if you are able to use it, the scheme is a great idea.

Depending on which scheme you can use there are different parts to consider -

cyclesheme charge the bike shop an admin fee which means some shops won't let you get a sale bike or limit your choice of bikes (Ribble/Planet X for example pass the admin charge onto you and Paul's Cycles limit your choices). At the end, you pay a deposit of 3% or 7% of the total cost (for sub or over £500 bikes) for an extended loan period for 3 more years

Evans (Bike2Work) doesn't have that extended deposit cost but not as many companies offer it. The Halfords one can be used at a LBS (there may be an admin charge) or for non-Halfords brands in some cases

If you can get the 0% finance or 0% card (credit depending) you will effectively pay more but may grant you a longer period to pay it off.

Remember you lose the tax saving for the rest of the period the scheme is running if you lose your job for whatever reason (you do get the tax saving for any months you have been paying it for).

Ignore any comments about not "owning" the bike, the company will not want to take back a second hand bike, the bike is yours in all but a technicality from when you pick it up.

Cyclescheme now allow official "topping up" over £1000 (tax saving is limited to £1000) which gives more flexibility

I have done it twice and don't regret it for a second, the scheme has saved me a few hundred pounds vs buying the bikes directly

Wallaby84

Thank you
My local independent bike shop accepts
Cycle scheme, bike2work, onyourbike and cycle plus?
Does anyone know if any of these are better than others? My employers haven't yet signed up with anyone and I'm likely to be the only participant but my boss has said they are definitely supportive of it.

Nasqueron

Cyclescheme and Bike2Work both do the 3/7% deposit thing at the end of the term

onyourbike seems to offer it as a side for their bike rental

Never heard of cycleplus so no idea

Probably be easier for the firm to go with one of the bigger schemes (Cyclescheme is the biggest) if they want to limit their admin

fred246

The best part of my job is the pension scheme. I avoid salary sacrifice which reduces my pension. Nobody will give you exact figures but I think the reduction from bike purchase is probably quite small.
The big problem seems to be the retailer gets full RRP minus approx 10% cyclescheme commission. It's very rare for anyone to pay full RRP. Would you pay list price for a new car? You'd really have to be stupid.
So you get a tax saving on the full RRP which is often the same as online retailers would be charging anyway. Some people like to pay by installments but you could get a 0% credit card for 24 months instead and put it on that.

Wallaby84

So it might be cheaper to get it myself as I can haggle on the RRP whereas it's not so easy to do this on a scheme due to commission - interesting!? Has anyone haggled on price when buying through a work scheme?

Richard53

I would recommend that you do the maths first - the total cost of using the scheme, including the final payment before you can call the bike your own and including the (small) effect on your pension, against the best deal you can do with cash. I did this and found the difference to be small. The final payment to 'own' the bike at the end of the agreement used to be a nominal fiver or so, but HMRC changed the rules and now it has to reflect market value, although different schemes seem to interpret this differently. Find out what this charge will be before committing yourself.

Nasqueron

fred246 wrote: »

The best part of my job is the pension scheme. I avoid salary sacrifice which reduces my pension. Nobody will give you exact figures but I think the reduction from bike purchase is probably quite small.
The big problem seems to be the retailer gets full RRP minus approx 10% cyclescheme commission. It's very rare for anyone to pay full RRP. Would you pay list price for a new car? You'd really have to be stupid.
So you get a tax saving on the full RRP which is often the same as online retailers would be charging anyway. Some people like to pay by installments but you could get a 0% credit card for 24 months instead and put it on that.

The reduction of the purchase price works out about 30%

While you are right about the sale bikes the last time I did the maths on a 2015 model (reduced) vs a 2016 model (on cyclescheme) they came in at the same price - and with that, the new bike > old bike - the comparison with cars is a bit disingenuous as bike tech changes a lot more than the car when talking about the same model year on year - with shimano trickle down tech, for example, a bike with 4600 tiagra may be cheaper than the next year model with 4700 tiagra but the 4700 is much superior

fred246

Quite funny really. Just been reading the thread about whether or not a modern bike is better than a 30 year old bike. Model years on bikes don't make much difference. Often just a change of colour or tyre. Often the more recent one has a worse specification and you can guess the company is trying to make the bike more profitable. I have been looking at bike specs for years and I often prefer last years spec.

Mr_Singleton

Wallaby84 wrote: »

Hi
I'm a basic rate tax payer. I've read a lot of articles on cycling websites all giving different opinions so was hoping to hear from people who had actually done it.

I'd be very very careful as from my experience FOR PROFIT companies that administer theses cycle to work type schemes are very good at highlighting a saving but not so forthcoming when it comes to the downsides.

A quick look on Evans Cycles website shows lots of 2016 bike with up to 25% discounts. They also offer 0% finance. Worth noting is that any safety gear you buy via cycle to work schemes will have 20% VAT added not so if you buy it direct.

All cycle to work savings are based on you staying in the scheme for the full term. If you don't then as has been pointed out your company won't want the bike back BUT it will deduct up to 25% of the bikes value from your final pay packet.

Mr_Singleton

fred246 wrote: »

Just been reading the thread about whether or not a modern bike is better than a 30 year old bike. Often just a change of colour or tyre. Often the more recent one has a worse specification

Your so right.... just seen Chris Froome win a stage of the Tour De France on a 30 year old bike and the only difference was that in 1986 the bike was blue rather than green and he was using Continental tyres rather than Dunlop.