Cycle to work scheme?

[rayschooks]

Right - I think I have just had a ride on the bike for me - Kalkhoff Agattu C8.

I have a problem however! I work in a local school and when I went to the school bursar to enquire about acquiring a bike under the CTW scheme she informed me that we are not regestered for VAT and as such I wouldnt be able to access the scheme.

Has anyone encountered anything like this and is there any way round the problem?

some advice would be greatly appreciated,

Ray

 

[HarryB]

Right - I think I have just had a ride on the bike for me - Kalkhoff Agattu C8.

I have a problem however! I work in a local school and when I went to the school bursar to enquire about acquiring a bike under the CTW scheme she informed me that we are not regestered for VAT and as such I wouldnt be able to access the scheme.

Has anyone encountered anything like this and is there any way round the problem?

some advice would be greatly appreciated,

Ray

There is no way round this and it is the same as the NHS as that is not registered for VAT. You can still save on your tax and national insurance but I wouldn't have thought it was worth it with all the hassle and end of term payments. Anyway in the end if you employer doesn't want to be part of the scheme there is not much you can do about it.

 

[donnoirf]

I would contact your head office staffing department for your local education authority & ask there.

Or check out your city councils website to see if there are any links to the cycle to work scheme there.

that is if you work for a Local Education Authority School?

Maybe your Bursar has not experienced such a request before & does not know what to do.

best of luck

 

[RoadieRoger]

Ride to Work Scheme

Most County or City Councils operate these Schemes as do Health Authorities .As Donnoirf suggested go further up the chain of command .

 

[Willin']

If you are employed by the Local Authority then you would have to enquire there to see if it registered.

 

[rayschooks]

It seems rather unfair that the government hasnt managed to work out a solution to the situation that employees in two of the country's largest areas, health service and education, cannot access the scheme.

Because both health & education are financed by the government there is no point in them paying vat. That would be like the governmnet charging vat to itself.

Am I misssing something here but the CTW scheme looks like it is unavailable to hundreds of thousands of people who work for the government.

Awful!

 

[rog_london]

The cycle-to-work scheme is generally unavailable to any organization which doesn't produce chargeable services, such as NHS hospitals and museums, to name two. The key factor is that such an organization still has to pay VAT on all its purchases (goods and services) but has no means of reclaiming it as a result of profitably selling on.

You may recall that museums and art galleries were pushed into charging admission even when they didn't want to, as only by doing so could they reclaim the VAT on exhibits they purchased. You have to be charging more VAT on what you sell than you pay on what you buy, in order to offset one with the other.

Rog.

 

[vectra]

It seems rather unfair that the government hasnt managed to work out a solution to the situation that employees in two of the country's largest areas, health service and education, cannot access the scheme.

Because both health & education are financed by the government there is no point in them paying vat. That would be like the governmnet charging vat to itself.

Am I misssing something here but the CTW scheme looks like it is unavailable to hundreds of thousands of people who work for the government.

Awful!

"Awful?" The CTW scheme is not only unavailable to "employees in two of the country's largest areas" but to millions who either are retired, unemployed or whose private company employer is not part of the scheme.

The scheme, in my view, has allowed the market to skew prices particularly at the higher end however I do accept that is has possibly encouraged manufacturers to enter the market as a result of the subsidies available via CTW.

My own experience of colleagues who have/are using the scheme is that for the majority the bike is purchased then little used.

The CTW should be abandoned and the market allowed to find its own level. Certainly, with fuel prices at the present level, there is a massive incentive to self-purchase a bike rather than allow on public subsidy.
Regards
vectra

 

[stevebills]

Just get a local mp to stick it on his expenses and then sell it off cheap to you

 

[WALKERMAN]

I have just got my new bike on the Cycle to work scheme. It isn't as attractive as it used to be as the final payment to actually buy the bike at the end of the 12 months is now 25%.

 

[Caph]

I have just got my new bike on the Cycle to work scheme. It isn't as attractive as it used to be as the final payment to actually buy the bike at the end of the 12 months is now 25%.

I'm not sure where you've got that from. There has never been any 12 month stipulation just as there has never been any percentage final payment stipulation. It has always been up to the employer to decide on the length of the term and it has always been fair market value that must be paid at the end of the hire period (which as far as I can make out has always been flagrantly disregarded). I've just double checked the DFT guidance and this is still the case. Maybe you are quoting one of these dubious middlemen companies that cream money from people that don't access the scheme directly?

 

[tillson]

I thought, and I may be wrong, that I had read somewhere that the final buy back price had to increase (possibly an EU ruling). When I purchased my bike, the buy back price was about 5% of the original value of the bike which made it an attractive way to buy. I am sure that I have read somewhere, that a ruling has been made that the 5% figure was ridiculous and had to increase.

Now, with the higher final value, plus the, "hire / lease charge" the scheme is effectively dead. That doesn't stop companies like CycleScheme bombarding me with emails though.

 

[WALKERMAN]

I'm not sure where you've got that from. There has never been any 12 month stipulation just as there has never been any percentage final payment stipulation. It has always been up to the employer to decide on the length of the term and it has always been fair market value that must be paid at the end of the hire period (which as far as I can make out has always been flagrantly disregarded). I've just double checked the DFT guidance and this is still the case. Maybe you are quoting one of these dubious middlemen companies that cream money from people that don't access the scheme directly?

I got that from the Company Accountant last week and she showed me it in black and white. We get our bikes over 12 months. Final payment 25%.
If the term was longer then the final payment would be 15%. I also saw that in black and white. I'm not quoting dubious middlemen.

 

[dmcgoldrick]

I got that from the Company Accountant last week and she showed me it in black and white. We get our bikes over 12 months. Final payment 25%.
If the term was longer then the final payment would be 15%. I also saw that in black and white. I'm not quoting dubious middlemen.

our council stopped the scheme because
1. it was too popular so too much hassle for payroll, and the 'terms' of the scheme could not be monitored (ie you actually have to use the bike to go to work on...... ) !!!!!
2.the company running the scheme for the council would not give final valuation figure prediction, which was changing from a nominal 0-5%.......to an unknown level expected to be 25% which would wipe out all the cost benefit of the scheme to the employee...except an interest free period (1 year).
3.the scheme was stopped about this time last year.

as usual, if it looks too good to be true i.e. joe public can get a tax benefit, then it is soon stopped.......

 

[HarryB]

This has come up before I am sure but this is my understanding. When the coalition came in, by coincidence the inland revenue tightened up the rules regarding valuation fees. The stipulated that the final valuation must not be a nominal figure (it was 5%) but an accurate valuation - thus the 25%-50% figure. The way round this has been for companies to extend the lease hire up to 5 years and thus ending up with valuations of 5-7% range. Cyclescheme say you have to pay to extend the lease from 1 to 5 years but this payment then becomes your final valuation.

Having bought two bikes under the scheme I won't do it again. The last I bought on the understanding that it would be mine after 1 not 5 years. The added complication is that technically we are not allowed to buy a bike over £1000 but the retail companies split the cost into bike and battery to get round these rule (but charge £50-100 for the privilege). I think the present valuation rules make this very difficult to do - if the rules changed again so that the bikes had to be physically inspected it would lead to all sorts of problems.

Many people feel that with the present rules the scheme is pretty much dead in the water but without the VAT discount this must be even more so.

 

[rayschooks]

From what I read here the general consenus is theat the CTW scheme isnt all it's cracked up to be?
On paper it looked like a good deal but with some of the rule changes the scheme might be more hassle than its worth.
Its a pity because the general sentiment of trying to encourage more people to get out on their bikes is a good one. I imagine that it would be virtually impossible to ensure that the bike was used for work purposes for a minimum 51%.

Why are they so worried about the final settlement %. I know you have to pay vat on this but again if the bike is being used as intended the few £s of vat would be grealtly outweighed with the reduction of road traffic and associated costs. Not to mention the health benefits and reduction in use of the NHS perhaps.

Are there really that many people looking to access the scheme, that the authorities are worried about the amount of money it would cost. It would take quite a few people to get involved before you get to really serious money?

 

[thunderblue]

I got that from the Company Accountant last week and she showed me it in black and white. We get our bikes over 12 months. Final payment 25%.
If the term was longer then the final payment would be 15%. I also saw that in black and white. I'm not quoting dubious middlemen.

After the 12 months you can let Cyclescheme have the bike and then pay a very small release fee after three years (I think). that way the final payment is kept small.

 

[HarryB]

After the 12 months you can let Cyclescheme have the bike and then pay a very small release fee after three years (I think). that way the final payment is kept small.

Not 3 years but 4 (I thought at my work it was 4 + the 1 year you have already leased it - but I could be wrong) and it is not a small release fee but 7% - more than it used to be and you still have to add VAT. You pay this up front after the one year is up so effectively you pay 13 instalments. It all depend on whether you really want to keep a bike for 4 or 5 years. Paradoxically if you used it every day for commuting (I thought this is what they wanted) it would be pretty knackered after that time.

Tax free bikes for work through the Government's Green Transport Initiative - Cyclescheme, provider of Cycle to Work schemes for UK employers

 

[thunderblue]

Yeah ... to be honest I have used this in the past, even working for a University so no VAT claimed back, but I wouldn't use it now in its current form.

 

[RoadieRoger]

Politicians

You would think the Politicians would have some mercy on the little people doing their bit to save the planet .They give a £5,000 grant to buy a £30,000 car but nothing off for cyclists or E scooterists or even Motorcyclists under the previous discount scheme .Perhaps they think our machines are playthings !
Don`t get me started on paying £15 to tax my moped and plenty of cars are free .The latest Honda PCX 125cc Scooter with stop/start puts out 73 g / km of Co2 and if it was a car would be free , as it`s not a car it`s £15 .
If you can afford a £30,000 car , why should us taxpayers subsidise you ? Perhaps when the battery is knackered on the` Leaf `the taxpayer will fork out £14,000 for the replacement !