How are cycle to work scheme payments calculated

bradda

Hi, I have a job which is paid through PAYE but is a zero hours contract. I typically earn variable amounts each month.

I would like to take advantage of the cycle to work scheme offered by my employer but I'm not sure how the monthly payments are calculated in order to figure out the expected savings. How are the payments (the "hire") calculated?

I also wondered whether the total amount you end up paying includes vat or not.

If anyone knows these things for certain it would be really helpful as I can't seem to fathom it from all of the information I've read.

Thanks

MilesT6060842

Does your company have a HR helpdesk that can explain it to you?  Although there are some standard elements to such schemes (HMRC has rules about pre-tax salary sacrifice funded benefits), there is some variation by scheme, and it is best to start there (but keep a log of who you spoke to and what was said).  Payment totals should be inclusive of VAT.

Bigger questions, though, especially in a zero hours contract situation:

• Is there an end of scheme payment to keep the bike?  Would you be able to afford that when it comes due?
• Is insurance against theft included in the monthly payment?  Can you afford to insure the bike yourself if not (standalone or via home contents insurance--check the clauses there, and any excesses).
• Are you sure you will stay in the same job for the duration of the scheme (including redundancy)?  There may be an early termination payment.
• Check that any cycling gear offered (helmet, gloves, lights, pump, tools etc) are good value for money before opting in to that vs. a "bare bike".
• Do budget for repairs (especially tyres/tubes).

Finally, if you are based in London and travel within the Santander Bike zone, check if your scheme offers a discount on the annual pass (one scheme does, also NHS workers get a deal).  Annual (or monthly) pass on a Santander bike may be a much better deal that a cycle to work scheme, even if there is no discount (paying post tax).