Cycle 2 work scheme

[Creditshampoo]

With my previous bike the payments just ended didn't have to pay anything else

[rogersh]

myroyalmail - cycle scheme states. "At the end of the hire agreement, you will have the opportunity to purchase the bike at fair market value"
EDIT from cycle to work guide Gov.uk
However, at the end of the hire period, the employer may choose to give the employee
the option to purchase the equipment under a separate agreement....
Alternatively, the employer may wish to allow their employees to continue to use the
cycles and cyclists' safety equipment you have supplied after the initial loan period
has ended, without transferring ownership. As long as the employee continues to meet
the conditions of the tax exemption (see section 4 above) no tax charge will arise.

I have emailed your.news@royalmail.com for clarification.

[smoothie262]

To this current day, do we still get to keep the bikes after our 18 month payment? Or do
Royal Mail demand the bike back? If not... is there a final payment?

Thanks

[exphg1961]

I left the business 12 months ago (IHR), having taken advantage of the C2W scheme 3 years or so back. The bike is still in my ex-wifes shed, unfortunately i couldn't take it with me when i moved 6500 miles away.
I doubt very much anyone in authority will recall you were part of this, if i may say, beneficial process.

[rogersh]

To this current day, do we still get to keep the bikes after our 18 month payment? Or do
Royal Mail demand the bike back? If not... is there a final payment?

Thanks

I have copied & pasted this extract from a previous post;

What happens at the end of the hire agreement?
If Royal Mail Group Ltd decide to transfer the ownership to employees after the 18 month hire period, a sum of £1 will be taken from your net salary to transfer the goods from the hirer to the employee. Then Fair Market Value of the goods as set out below by HMRC will be calculated and the value will be added to your P11D whereby your tax code will be slightly adjusted to accommodate the taxes due.
Transfer of Ownership - Example based on £450 purchase price:
If you have purchased a bike for £450 you would have 18 monthly salary deductions.
Under HMRC guidance the fair market value of the bike after 18 months will be £72 (16% of the original value).
P11D explained – P11Ds are used to report benefits provided to employees by Royal Mail that are not put through the payroll. The fair market value of the bicycle and equipment is calculated as per the table below.



Age of cycle

HMRC Fair Market Value


Original price up to £499.99

Original price £500+

18 months

16% of the original purchase price

21% of the original purchase price

I completed 18 months of 78 weekly payments of £12.39 in February 2016. Wage slip deductions stated CyclePlus Final Payments £1.00

My bike purchase price was £950. x 21% = £199.50 = the fair market value. My tax code did not change in April 2016 as indicated, to refund tax that I am certain would be 20%( My tax rate) of the fair market value - unless anyone can correct me.

[greengiant]

I am considering the cycle 2work / cycle plus scheme. A couple of questions though.
Firstly can any type of bike be purchased as I'm looking to buy a new hard tail mtb. I already have an old touring bike i use for cycling to work. In other words must a bike purchased through this scheme be only used for commuting?

Secondly do you apply for it all online through mybundle, or do you need to speak to lino/dom about it?

Id be looking to spend £650 absolutely max on the bike, so at that price level is the scheme still worth it, or is it more beneficial when you are spending £1k+?

Cheers

[greengiant]

Also, do these calculations look correct:

£800 voucher cost:

£10.44 weekly cost for 18 months.

Then at 18 months: Fair Market Value Price : 21% of initial purchase price = £168

So total paid would then be:

10.44x4x18 = 751.68
Plus the Final Valuation = £168

Giving a grand total cost of £919.68

Not exactly a scheme to save money...

[NewPostieUK]

Also, do these calculations look correct:

£800 voucher cost:

£10.44 weekly cost for 18 months.

Then at 18 months: Fair Market Value Price : 21% of initial purchase price = £168

So total paid would then be:

10.44x4x18 = 751.68
Plus the Final Valuation = £168

Giving a grand total cost of £919.68

Not exactly a scheme to save money...

I don't know if the scheme has changed or it's a different scheme but mine was nothing at all like that. I finished paying for mine about 8 months ago.

There was no 'Fair Market Value' or ' Final Valuation' or anything like that at all. I simply paid less than £2 a week, before tax for two years and got a £275 bike. It's mine forever, never used it for work, and I could have had any bike in my local independent shop.

[dohnut]

Also, do these calculations look correct:

£800 voucher cost:

£10.44 weekly cost for 18 months.

Then at 18 months: Fair Market Value Price : 21% of initial purchase price = £168

So total paid would then be:

10.44x4x18 = 751.68
Plus the Final Valuation = £168

Giving a grand total cost of £919.68

Not exactly a scheme to save money...

The payment you make isnt taxable, so you pay less tax in your wages, so it would be more like £8.00x4x18=£576.00, and after it has finished they alter your tax code and you pay slightly more tax but nothing like you said, still a good deal if you ask me, I got a bike from halfords that was already reduced from £1000 and in reality over the 18 months paid around £600 for it on a £800 voucher, very good deal.

[rogersh]

Also, do these calculations look correct:

£800 voucher cost:

£10.44 weekly cost for 18 months.

Then at 18 months: Fair Market Value Price : 21% of initial purchase price = £168

So total paid would then be:

10.44x4x18 = 751.68
Plus the Final Valuation = £168

Giving a grand total cost of £919.68

Not exactly a scheme to save money...

The payment you make isnt taxable, so you pay less tax in your wages, so it would be more like £8.00x4x18=£576.00, and after it has finished they alter your tax code and you pay slightly more tax but nothing like you said, still a good deal if you ask me, I got a bike from halfords that was already reduced from £1000 and in reality over the 18 months paid around £600 for it on a £800 voucher, very good deal.

On request HMRC sent me a copy of P11D, tax year ending 2016, which stated Employer Benefits £198. This was the fair market value(21% of purchase price £950). So I had to refund (20% of 198) £39.60 tax. Initially I estimated I would save£209.80 tax & National Insurance reductions over the 18 month hire period. So I saved around £170 overall.
I understand the confusion that implies you have to pay back the fair market value to Royal Mail.

[greengiant]

Thanks for that, it does clear things up! The wording does suggest that you pay the final market value to royal mail, which if that was the case would mean not much of a saving at all.

According to mybundle site the scheme closes in a few days...

[greengiant]

I put my order in at the weekend on the mybundle site. It says pending 6/2/2017, so i take thats when they start processing my letter of collection?

[Deadly]

Did you go to a bike shop and choose your bike first before putting in your application or just choose an amount you want to pay and go from there?

[greengiant]

Did you go to a bike shop and choose your bike first before putting in your application or just choose an amount you want to pay and go from there?

Well, I went to a bike shop (an independent who uses cycle plus), had a nosy around, found a bike I liked / tried for size (hardtail MTB), then put an order in for the cycle plus scheme for the price of the bike. Now I need to be patient on the cycle plus voucher coming through...

[Deadly]

Did you go to a bike shop and choose your bike first before putting in your application or just choose an amount you want to pay and go from there?

Well, I went to a bike shop (an independent who uses cycle plus), had a nosy around, found a bike I liked / tried for size (hardtail MTB), then put an order in for the cycle plus scheme for the price of the bike. Now I need to be patient on the cycle plus voucher coming through...

I visited Evans and they said to just turn up with the letter/voucher and there'll take it from there. I mistakenly thought you had to ask the shop to order a bike before you applied to cycle plus.