Expected saving by purchasing a bike through a Cyclescheme?

[Duncan Smith]

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

 

[Tony B]

Duncan Smith wrote:
> What's the expected saving when purchasing a bike through a works
> cycle-scheme?

> 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

 

[MeerKat]

"Tony B" <[email protected]> wrote in message
news:meydncggXfQCFWnanZ2dnUVZ8q2dnZ2d@plusnet...
> Duncan Smith wrote:
>> What's the expected saving when purchasing a bike through a works
>> cycle-scheme?
>
>> 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

 

[[email protected]]

On Apr 3, 8:22 am, Duncan Smith <[email protected]> wrote:
> 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.

 

[[email protected]]

On Apr 3, 8:47 am, "[email protected]" <[email protected]>
wrote:
> On Apr 3, 8:22 am, Duncan Smith <[email protected]> wrote:> What'sthe 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.

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.

 

[[email protected]]

On Apr 3, 9:06 am, "[email protected]" <[email protected]>
wrote:
> 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.

 

[Duncan Smith]

>
> > 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

 

[Keith Dipper]

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 protected]> wrote in message
news:fd86cf7b-2df9-4aaa-8ac1-698fdb96f2d9@y21g2000hsf.googlegroups.com...
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