Expected saving by purchasing a bike through a Cyclescheme?

Duncan Smith said:

What's the expected saving when purchasing a bike through a works
cycle-scheme?

Quoted message said:

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

sounds like a VAT thing, maybe your employer/accountant has decided the
company should have the VAT... I reckon I saved about 40% on my bike but
that was a rough guess from two years ago..

hth,

T

"Tony B" <[email hidden]> wrote in message
news:meydncggXfQCFWnanZ2dnUVZ8q2dnZ2d@plusnet...

Quoted message said:

Duncan Smith said:

What's the expected saving when purchasing a bike through a works
cycle-scheme?

Quoted message said:

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

sounds like a VAT thing, maybe your employer/accountant has decided the
company should have the VAT... I reckon I saved about 40% on my bike but
that was a rough guess from two years ago..

hth,

T

Go here they have a calculator should give u an accurate break down

http://www.evanscycles.com/ride2work.jsp;jsessionid=E976D2ACAC98151B02C284488108B9F3.tc5

MeerKat

Duncan Smith said:

What's the expected saving when purchasing a bike through a works
cycle-scheme?

I was under the impression that this should be about 50%, i.e. a half
price bike when purchased at the higher rate of tax, but maybe that's
wrong.

Was considering buying a Brompton Folder with a few added options.
Calculated from the RRP from the Brompton web-site the total came to
£862.5 yet the 18 monthly deductions are £39.25 each.

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

I think you'll find those monthly deductions are pre-tax.

So as a HR tax payer you'll see a net salary reduction of 23.55 or
23.16 (not sure if NI gets reduced as well)

23.55*18/862.5 = 49% of RRP.

(The numbers don't quite add up though: 862.5 is 734.04 Ex Vat which
would be 40.78 per month you end up paying 51% of RRP)

You also should check what the final purchase price is likely to be to
see how beneficial the scheme will be for you.

Tim.

On Apr 3, 8:47 am, "[email hidden]" <[email hidden]>

Quoted message said:

On Apr 3, 8:22 am, Duncan Smith <[email hidden]> wrote:> What'sthe expected saving when purchasing a bike through a works

Quoted message said:

cycle-scheme?

Quoted message said:

I was under the impression that this should be about 50%, i.e. a half
price bike when purchased at the higher rate of tax, but maybe that's
wrong.

Quoted message said:

Was considering buying a Brompton Folder with a few added options.
Calculated from the RRP from the Brompton web-site the total came to
£862.5 yet the 18 monthly deductions are £39.25 each.

Quoted message said:

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

I think you'll find those monthly deductions are pre-tax.

So as a HR tax payer you'll see a net salary reduction of 23.55 or
23.16 (not sure if NI gets reduced as well)

23.55*18/862.5 = 49% of RRP.

(The numbers don't quite add up though: 862.5 is 734.04 Ex Vat which
would be 40.78 per month you end up paying 51% of RRP)

You also should check what the final purchase price is likely to be to
see how beneficial the scheme will be for you.

Tim.

I've just thought. Your employer might be being very generous and
giving you (some of) their NI savings as well. So this looks like a
very good scheme.

I'm not exactly sure how the calculations work when the employers NI
contribution is included (It's 12.8% or 3.7%)

734.04 Ex Vat.
Salary sacrifice means employer saves 27.16 NI (assuming contracted
out)
So 706.88/18 = 39.27 - which is pretty close to the figure you've
quoted.

Tim.

On Apr 3, 9:06 am, "[email hidden]" <[email hidden]>

Quoted message said:

I'm not exactly sure how the calculations work when the employers NI
contribution is included (It's 12.8% or 3.7%)

734.04 Ex Vat.
Salary sacrifice means employer saves 27.16 NI (assuming contracted
out)
So 706.88/18 = 39.27 - which is pretty close to the figure you've
quoted.

Actually, that might not be correct. I got that 3.7% from
http://www.hmrc.gov.uk/rates/nic.htm but that's a rebate (whatever
that means)

Tim.

Quoted message said:

Quoted message said:

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

I think you'll find those monthly deductions are pre-tax.

Tim.

Thanks Tim, you were right - the price listed is the gross price which
is why it seemed so high.

Turns out the actual figiures are £416.73 / £830 giving a saving of
50%. There will likely be an additional 19th payment of a similar
value to take ownership of the bike - but that's cool, pretty good
deal in all in all!

Many thanks,

Duncan

Hi

the saving you are seeing is only the Vat;

The monthly payment is deducted from you salary BEFORE tax thus you wont
have to pay PAYE on it which save at least another 20% depending on your
coding.

Your employer should be able to give you the actual figures

Hope this helps

Keith

"Duncan Smith" <[email hidden]> wrote in message
news:[email hidden]...
What's the expected saving when purchasing a bike through a works
cycle-scheme?

I was under the impression that this should be about 50%, i.e. a half
price bike when purchased at the higher rate of tax, but maybe that's
wrong.

Was considering buying a Brompton Folder with a few added options.
Calculated from the RRP from the Brompton web-site the total came to
£862.5 yet the 18 monthly deductions are £39.25 each.

I make this a total saving of 18%, is that a bit low for a cycle-
scheme?

Many thanks,

Duncan