C2W Schemes - after the 12 month period

Discuss the eternal "Which fork/bike/tyres should I buy?" questions.
Andy9964
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C2W Schemes - after the 12 month period

Postby Andy9964 » Sat Jan 05, 2013 10:27 am

Im currently waiting for my employers scheme to open, so I can go get a new bike.
I understand how the payments and savings are made, but one thing doesn't seem to be very clear at all.
What (if any) the final payment will be to take ownership of the bike
Some sites say as much as 25%, some suggest the employer may not take anything. (I'm on holiday till next week, so can't ask at work till then)
Anyone who has bought a £1000 bike, and kept it after the 12 month period care to share their experiences. i.e. how much, if anything, they had to pay as a final payment

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Chunkers1980
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Re: C2W Schemes - after the 12 month period

Postby Chunkers1980 » Sat Jan 05, 2013 11:05 am

I've paid nothing on both of mine.

Think they've got hotter on it recently. Still what is 25% of nothing again?

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cooldad
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Re: C2W Schemes - after the 12 month period

Postby cooldad » Sat Jan 05, 2013 11:27 am

You can keepit for another 18 months or something at a nominal payment - 5% or something, than pay nothing at the end. Google the rules.
You're still saving whatever your tax rate is, plus getting interest free finance, so to me it's a no brainer.
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Re: C2W Schemes - after the 12 month period

Postby 97th choice » Sat Jan 05, 2013 11:43 am

Companies appear to apply the rules in different ways, mine charges a flat 5% at end of 12 months regardless of bike price, plus accessories.
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Re: C2W Schemes - after the 12 month period

Postby cooldad » Sat Jan 05, 2013 12:08 pm

We are a small co and they decided it was too much work to administer an actual scheme, so we just get an interest free loan for a year as a salary sacrifice. Ideal because I get the cash, can buy whatever I want, at any price, including second hand, own it from day one, and no hassle at the end.
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stellamandude
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Re: C2W Schemes - after the 12 month period

Postby stellamandude » Sat Jan 05, 2013 14:38 pm

Mine was a 5% one off payment of the purchase price after 12 months, would have been only 3% if the purchase price was below £500.
This one off payment in affect leases the bike for another 3 years, at the end of the 3 years I have 2 options.

Option 1

Keep the bike and become the rightful owner.

Option 2

Give the bike back and get back the 5% one off payment.

As mentioned already, each scheme is different depending on the employer.
Check which scheme your company/employer has chosen and look on the website.

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Re: C2W Schemes - after the 12 month period

Postby ElliesDad » Sat Jan 05, 2013 14:51 pm

I got a £1000 bike through the Halfords scheme, the way the end of the scheme works is that you pay tax on 25% of the fair market value (set by HMRC). So I will pay 20% tax on 25% of £1000 = £50 tax at the end of the scheme, this £50 will be spread over the following 12 months as it adjusts your tax code. So in effect for the second year I will be paying £4.17 a month!
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supersonic
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Re: C2W Schemes - after the 12 month period

Postby supersonic » Sat Jan 05, 2013 16:37 pm

The bike belongs to the employer - they don't even have to give it you. it is up to them what they chose to give you, or what they want to charge, or whether they offer you the 36 month option.

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cooldad
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Re: C2W Schemes - after the 12 month period

Postby cooldad » Sat Jan 05, 2013 16:47 pm

Technically, but not many employers want a half trashed dirt bike.
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Andy9964
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Re: C2W Schemes - after the 12 month period

Postby Andy9964 » Sat Jan 05, 2013 17:07 pm

supersonic wrote:The bike belongs to the employer - they don't even have to give it you. it is up to them what they chose to give you, or what they want to charge, or whether they offer you the 36 month option.

So it really depends on how good the company you work for is. Doesn't look good for me then :lol:
I'll have to see if I can find someone at work who's got one
Thanks for the replies

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Re: C2W Schemes - after the 12 month period

Postby CB75 » Sat Jan 05, 2013 18:20 pm

i am now on to my third cyclescheme bike. the way that cyclescheme works is that you have 3 options.

1. give the bike back
2. buy the bike outright
3. pay a small one off fee to continue to hire the bike for a further 36 months.

it seems to me that everyone in the cyclescheme from my work chose option 3 as buying the bike outright we werentsaving what we thought we would on it. however the 3 bikes i have had from the scheme have all been sale bikes usually half price from £1400 -£1600 down to £700/£800. and then helmet, lights and clothing on top of that. so ive definitely saved a lot of money on 3 bikes and gear. worth doing it.

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Re: C2W Schemes - after the 12 month period

Postby supersonic » Sat Jan 05, 2013 18:31 pm

If the bike owner offers you the options. They usually do, but some don't.

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Re: C2W Schemes - after the 12 month period

Postby The Rookie » Sat Jan 05, 2013 18:43 pm

At the end of the 12 months the company owns the bike (or scheme provider).

Different schemes work in different ways, strictly you have to pay the fair market vlaue for the bike or are liable to the tax on the beneft in kind if just given it (if they do just give it to you and you don't pay tax that's evasion, a criminal offence), some schemes circumvent this by offering an on paper extended rental (in fact it's just a cheap purchse price - which is legitimate tax avoidance).

There is no point listening to what some other persons scheme does when yours may well not do the same, you have to find out!


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