Bike4Work scheme

GibbsRule_No3

My work offers this scheme and as a cyclist I thought I'd like a new bike. I will be employed by the company for the full 12 months of the scheme but in March 2020 I will get my State pension so no need to pay NI, my question is will I be able to take advantage of the scheme? I'm thinking the answer will be no but wondered if anyone knew, before my very slow HR department respond to the question. There is mention of NI but it just says you cannot partake if you fall below the National Minimum wage and thus don't pay NI. I won't fall below and will continue to pay Income Tax but not NI.

Answering my own question, seems I can join and just two months NI would not be of benefit.

CarolynRach

Who is your Cycle to Work scheme through? I've never heard of Bike4Work... is it Bike2Work? If so, drop them a line and they'll be able to advise I reckon.

Mr_Singleton

This govt. cycle scheme comes up on this forum every now and again. I’d like to put my personal tuppence worth in by saying it’s a complete con.... others might disagree with me.

All I would suggest you do is look into the scheme very closely and know what your getting into as lots of people are only too happy to give you the benefits but are somewhat quiet about the downsides.

KeithP

Mr_Singleton wrote: »

...are somewhat quiet about the downsides.

You seem to be too.

Are you not going to explain to the OP all your perceived 'downsides'?

sheslookinhot

Got a certificate for £800 last May. 40% tax payer, paid after tax 38.60 per month and a final payment to "own it later" of £56. Total £520. Got a GT Avalanche Expert £799.99.

So I'm happy with that. No downside

GibbsRule_No3.

I have used the scheme before, not the last bike two years ago but the one before that. No problem with it. Weird bit was the part that mentioned a last payment “to buy the bike”, nothing ever happened, a few of us taking part queried what we needed to do, especially if we wanted to get rid of the bike ( as I did because I was buying a new one and needed the room) no one in HR seemed to know what the final payments to buy or take the bike back was! Going to look at a Gazelle Orange 7. They sent the certificate through really quickly after saying I could become a member, despite no need to pay NI after March 2020.

Mr_Singleton

sheslookinhot wrote: »

Got a certificate for £800 last May. 40% tax payer, paid after tax 38.60 per month and a final payment to "own it later" of £56. Total £520. Got a GT Avalanche Expert £799.99.

So I'm happy with that. No downside

Not so sure that HMRC would be so happy with that.

molerat

Mr_Singleton wrote: »

Not so sure that HMRC would be so happy with that.

Why is that ?

All seems perfectly within the rules to me.
£800 - 42% = £464 / 12 = £38.66. 7% of £800 = £56.

Mr_Singleton

molerat wrote: »

All seems perfectly within the rules to me. 7% of £800 = £56.

Ok I’m up for a Saturday night giggle.....

Using your methodology....
It sounds perfectly OK to me for my company to buy me a £100,000 company car on Tuesday. Then on Wednesday I’m going to buy the company car off my company for the scrapage value of the car in 12 years time say £1500. What do you think HMRC will say about it?

Your claim the bike is worth 7% is fair enough in 4 years but you’ve only had it for 1 year SO it’s value according to HMRC is 25%. So, 25% of £800 = £200 NOT £56.

The total savings you’ve made are around £130.... whoopy ding ding.

Says allot about the scheme that you have to defraud HMRC and the taxpayer to make any reasonable savings.

Mr_Singleton

KeithP wrote: »

You seem to be too.

Are you not going to explain to the OP all your perceived 'downsides'?

There was a person here a while ago who’d used the scheme but left the company after 6 months. She was mortified after they deducted a huge amount out of her final pay to pay off the bike at post Tax rate.

It’ll affect your pension from the moment you claim till the day you die.

If the company goes bust you technically lose the bike as it’s a company asset.

If you buy any safety gear ie helmet, lights etc you’ll be required to pay an extra 20% VAT on them.

The scheme will only allow you to buy full priced bikes so no discounts.... it’s why Halfords, Evans etc love it!

You don’t own the bike until you pay fair value for it at the time of ownership transfer.

It’s basically a rubbish scheme to flog full priced bikes to people with poor credit ratings.

parking_question_chap

You will get much better value on the second hand market. I speak from experience.