Cycle to Work with Cyclescheme

Commute image 2

The Cycle to Work scheme is a government initiative that allows you to get a brand new bike and safety equipment for your commute to work – all tax free! yippee! 🙂

One of the Cycle to Work partners that we use at Cycle Centre is Cyclescheme, if your employer isn’t signed up to a Cycle to Work provider here’s a link with more information for your employer.

http://www.cyclescheme.co.uk/employers

Getting a bike through a Cycle to Work scheme makes sense. Not only can you save money (between 25% – 39%, depending on how much tax you pay) you get to spread the cost over a year and there’s no credit check either! You’ve got up to £1,000 to spend, so make sure you make the most of the potential savings by getting a bike package that includes everything you need to cycle to work – this includes the essentials like lights, locks, helmets and clothing which can all be bought through the scheme.

Commute image 4

You can choose the right bike for your commute – whether that’s a road bike, mountain bike so that you can take in a trail on your commute or a do it all hybrid bike.

This youtube clip is all about Bob and how he wants to get started riding a bike to work. I want to do something with Bobs hair, but apart from that its a really helpful short film.

Need another helping of Bob? You got it! (do you see what I mean about his hair?)

This film explains what happens at the end of the 12 month hire period and what your options are for either keeping the bike or giving the bike back.

 

Hopefully your mind is nearly made up to ride to work, but if not what about the fact that cycling can burn up to 500 calories an hour. Its a low impact form of exercise. Riding gets you out of the traffic and once you have ridden a few times to work and got over the initial wheezing stage, you arrive at work feeling energized and ready for whatever happens during your working day.

Commute image 3

We just want to get more people riding bikes, and we understand fitting a bike ride into your busy life can be really difficult, so if you can turn your commute to work into a blast on the bike it will be a guilt free exercise session.

If you would like help or advice please contact us with whichever method you prefer. Its always good to see you in person but we understand you may be stuck in traffic 😉

cyclescheme logothecyclecentre_logo

Advertisements

Do you want to Cycle to Work for less £?

The Cycle to Work Scheme can save you between 16% and 40% off the cost of a new bike. It has been a hugely successful scheme nationally. Introduced in 1999 by the government a tax exemption incentive to promote healthier journeys to work and reduce environmental pollution. We’ve been a part of the Cycle to Work Scheme for a while now and have really enjoyed helping new customers get into cycling as a result.

For most people, the scheme does still cause a bit of confusion as to how it actually works. So we thought we’d have a go at writing a short explanation to help you out.

First off your employer must be a partner in the scheme. They do not need to be VAT registered. The scheme is available to employees paid by PAYE and above minimum wage criteria.

How the Cycle to Work scheme works

Your employer buys a bike of your choice from a registered partner bike shop (like The Cycle Centre). This can be up to he value of £1000 (if you’re employer holds a Consumer Credit Licence, the maximum is £4500).You sacrifice an amount of salary equal to the cost of the certificate over 12 months. The payments are made from your gross salary (before any tax or NI is deducted), which means you pay less NI and income tax. So the savings are made from the tax and NI reductions alone.

At the end of the 12-month ‘hire’ period, you buy the bike from your employer for its approved Fair Market Value (FMV). However, various scheme providers have come up with ways to minimise the final cost of the bike. One is to extend the loan period past one year, thereby allowing one of the heavier depreciation figures to be used. Another solution involves paying the tax on the FMV. Cyclescheme, the UK’s largest third-party scheme operator utilises the first option. This involves extending the loan period of the bicycle for a further three years, at which point the FMV is 3-7%. Since VAT is no longer added to the final purchase price, there are some instances where you may be better off with this new system. The new ‘sweet spot’ is buying a bike for £499.99, thereby qualifying for the lowest (3%) FMV is you sign Cyclescheme’s Extend Use Agreement.

Other scheme providers take a different approach, which is to settle up with HMRC and pay tax on the FMV of the bike. So you’d pay 20% of the 25% FMV on a bike costing more than £500. For example, on a £1000 bike that’s just £50. The downside to this is that there is a bit more paperwork for your employer. This is the “P11d system” and some employers do prefer it. Although it can cost more for higher rate tax payers and omitting to pay the P11d charge can be troublesome for those concerned.

Did You Know?

You can have two bikes at once on the scheme if you ride to a station, take a train and ride again to your workplace. HMRC doesn’t force you to go for the folding bike option.

You can claim 20p per mile in travel expenses when cycling for work other than commuting, but not if you’re on a Cycle to Work bike because this ‘belongs’ to your employer.

Employers who can’t reclaim VAT – charities, universities, the armed forces and parts of the NHS – can’t take part in the scheme.

You are responsible for the maintenance and insurance of the bike, even though you technically your employer (or third party finance company) own the bike during the ‘hire’ period.

Typical savings for employees are between 32% for basic rate taxpayers and 42% for high rate taxpayers, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme.

Still sounds confusing?

Here’s an example taken from the Cyclescheme website of how the savings work during the hire period, assuming the following:

  • Employee is paid monthly
  • Employee is a standard rate tax payer requesting a £500 Certificate
  • The hire period is 12 months
  • The Employee’s monthly gross salary is £1,200.00 (£14,400 per annum)
Salary before
scheme participation
Salary during
scheme participation
Monthly Gross Salary £1,200.00 £1,200.00
Bike value including VAT
Gross salary sacrifice total
£500.00
£500.00
MONTHLY GROSS SALARY SACRIFICE = £500 / 12 months
(this amount appears on the hire agreement) 
£41.66
Monthly Gross Salary after salary sacrifice
Monthly NIC contribution (12%)
Monthly income tax contribution (20%)
Net Salary
£1,200.00
£144.00
£240.00
£816.00
£1,158.34
£139.00
£231.67
£787.67
MONTHLY NET SALARY REDUCTION £816.00 minus £787.67= £28.33
MONTHLY SAVING £41.66 minus £28.33 = £13.33

If you’d like to start shopping for your Cycle to Work Scheme bike or would just like a bit more information, then please do pop in to The Cycle Centre and have a chat with us

The information in this post was obtained from www.cyclescheme.co.uk and http://www.onyourbike.org

Cycling to Health Through Cycling to Work

Cycling to work could help us all be healtheir according to the breakfast news this morning.  Apparently two thirds of us don’t do enough exercise, raising the risk of us getting high blood pressure and cholesterol.  A lack of activity is cited as one the seven lifestyle high risk to factors to health along with smoking and alcohol consumption and we are being encouraged to walk and cycle to work.
In England 93% have at least one risk factor and over a third have three or more.
Hmm think I’ll be getting my waterproofs on and cycling in this morning!
Just watching the breakfast news and, according to the government, two thirds of us don't do enough exercise, raising the risk of us getting high blood pressure and cholesterol.  A lack of activity is cited as one the seven lifestyle high risk to factors to health along with smoking and alcohol consumption and we are being encouraged to walk and cycle to work.  In England, an incredible 93% have at least one risk factor and over a third have three or more.  Hmm think I'll be getting my waterproofs on and cycling in this morning!

Maybe Newcastle could aim to give Copenhagen a run for their money and become the biggest cycling capital in Europe!

Give us a bell on 0191 2651472 for more info on how to join the scheme

Give us a call to find out about cycle to work schemes.