Reply to: Umbrellas with cycle to work schemes

[JoJoGabor]

That's interesting PK. They refused for me back in September. I went with Brookson solely because of the 4k limit on the CtW scheme, wish I could have got more. I'm really angry with Brookson though for being so rubbish in getting anything done. Did anyone ever find any other umbrella offering more than 4k?

[PKConsulting]

I'm with Brookson and they are able to increase the £4000 limit, I know, as they have done it for me. You have to be persistent with them and there will be a lot of toing and froing between them and GCI.

So be patient with them, as I get the feeling that although the C2W scheme is a standard offering its not a very smooth and seamless process.

Good luck.

Oh and remember, to stay above board DOfT says:

At least 50% of the cycle’s use must be for ‘qualifying journeys’, i.e. commuting to work purposes;

[eek]

I totally agree, it is a little daft that people can get a tax break on such an expensive bike which is so over specced for simple commuting. On the other hand there are so many other similar 'loop hole' type of tax breaks in this country that are far worse. Lets start with the one that many of us probably have in the past or are currently taking advantage of in contracting via a Ltd company Much much bigger ones however applying to international corporation tax, off-shore companies etc. I no longer feel so bad about the bikes!

The only people who use that type of excuse were those foolish to join a tax avoidance scheme.

In reality if you are talking about schemes to avoid tax, the biggest one in the past 10 years is getting a company electric car - I’m very surprised no umbrella company has gone that such a scheme using 1 of the monthly subscription companies.

[Rafd]

I totally agree, it is a little daft that people can get a tax break on such an expensive bike which is so over specced for simple commuting. On the other hand there are so many other similar 'loop hole' type of tax breaks in this country that are far worse. Lets start with the one that many of us probably have in the past or are currently taking advantage of in contracting via a Ltd company Much much bigger ones however applying to international corporation tax, off-shore companies etc. I no longer feel so bad about the bikes!

[northernladuk]

I'd quibble slightly with the bit about tax funding other people's bikes. You don't get a grant from the government, or anything like that. The employer pays out the full cost to the bike shop, then they deduct it from the employee's gross salary. So, the person who gets the bike is paying less tax into the central pot, but I think that's subtly different from taking money out of the pot.

Regarding electric bikes vs cars, it has to be an EAPC (Electrically Assisted Pedal Cycle) in order to qualify for the cycle to work scheme. In other words, the person riding it has to actually pedal in order for the bike to move (unless you're coasting down a hill). By contrast, if you're using a scooter, motorbike, or car, you can just sit/stand there and let the machine do all the work. There's a theory that this amount of exercise will make you healthier and reduce the strain on the NHS, which balances out the money you would otherwise pay in taxes.

More generally, I agree that the limit should be higher than £1000, because a Brompton (folding bike) is a very popular bike for commuting: you can cycle to the station, take it on the train, then cycle to your office at the far end. The non-electric model I bought (M3L) was just under £1000 in 2008, and that got me back into cycling as an adult, but it now costs £1315.

That's very true but like any system I find it a bit distasteful when someone comes in and abuses it. 1k is totally accepable as it gets a decent piece of kit or a Brompton which is a quality commuting bit of kit. When you then break in to 3 to 5k bikes it's people following their passion and wants not getting commuting kit so should be a balance.

But then, as you say, it doesn't really affect the purse and if someone will communte on a 4k bike but not a 1k one then that's one person better I guess.

[hobnob]

Why should the tax subsidise your lifestyle choice though? You could argue you don't need an electric bike but I do get it will get more people cycling than on a normal one. And at those prices you could argue for a smart car or motor bike. I think your average tax payer would be a bit aggrieved their tax is funding 4k electric bikes. You say prices have shot up but the base has also lowered. Perfectly good bikes around starting at £1200.

I'd quibble slightly with the bit about tax funding other people's bikes. You don't get a grant from the government, or anything like that. The employer pays out the full cost to the bike shop, then they deduct it from the employee's gross salary. So, the person who gets the bike is paying less tax into the central pot, but I think that's subtly different from taking money out of the pot.

Regarding electric bikes vs cars, it has to be an EAPC (Electrically Assisted Pedal Cycle) in order to qualify for the cycle to work scheme. In other words, the person riding it has to actually pedal in order for the bike to move (unless you're coasting down a hill). By contrast, if you're using a scooter, motorbike, or car, you can just sit/stand there and let the machine do all the work. There's a theory that this amount of exercise will make you healthier and reduce the strain on the NHS, which balances out the money you would otherwise pay in taxes.

More generally, I agree that the limit should be higher than £1000, because a Brompton (folding bike) is a very popular bike for commuting: you can cycle to the station, take it on the train, then cycle to your office at the far end. The non-electric model I bought (M3L) was just under £1000 in 2008, and that got me back into cycling as an adult, but it now costs £1315.

[northernladuk]

I emailed Brookson and they told me they were not planning to raise the limit, so I am assuming the £4k is set by them rather than the provider.

Bike prices have shot up over the last year and with more people wanting ebikes, £4k is no longer as ridiculous as you might think... I bought an ebike for £3k about 2 years ago (reduced from £3.7k) and looking now I'd need to spend over £5k to get one with similar spec!

Why should the tax subsidise your lifestyle choice though? You could argue you don't need an electric bike but I do get it will get more people cycling than on a normal one. And at those prices you could argue for a smart car or motor bike. I think your average tax payer would be a bit aggrieved their tax is funding 4k electric bikes. You say prices have shot up but the base has also lowered. Perfectly good bikes around starting at £1200.

Like any system, it was never designed for these prices and once you push it that far it just falls apart. With the push for green I'm sure e-bikes will get some special treatment soon and it will become much clearer.

The double hit you are having is you are through a brolly which is probably the worst employment model you could have so you can expect them not to be very helpful compare to normal employers sadly

[Rafd]

It's not relevant to me, but will be relevant to the tax man if they feel you are attempting to commit fraud by getting an expensive bike every 2 years, selling it on then buying another one.

How is that fraud? After the end of the agreed period you pay the calculated market value for the bike then you become the owner and are free to sell it. Many thousands of people across the country will be doing exactly this every year or two.

[eek]

It's not relevant to me, but will be relevant to the tax man if they feel you are attempting to commit fraud by getting an expensive bike every 2 years, selling it on then buying another one.

That's even more layers removed from the question being asked than I was expecting it to be.

However it is an important point - when the scheme was for a £1000 bike the actual tax involved / lost was minimal. Once you go above £3000/£4000 you are talking about £2000 or so in lost tax and that's a very different matter.

And that is probably why few people offer amounts above that (especially the more watched umbrella firms)..

[eek]

Haha the level of aggression on this forum is absurd! It's irrelevant to you how often I change bikes. Mind your own business.

While vaguely true, it doesn't solve your problem

The reality is that I suspect Brookson offers the highest limit. So you options will be to go back to your agency, find out what umbrellas are on their PSL and see if any of them offer a high limit. I suspect they won't though...

[WTFH]

Haha the level of aggression on this forum is absurd! It's irrelevant to you how often I change bikes. Mind your own business.

It's not relevant to me, but will be relevant to the tax man if they feel you are attempting to commit fraud by getting an expensive bike every 2 years, selling it on then buying another one.

[Rafd]

Haha the level of aggression on this forum is absurd! It's irrelevant to you how often I change bikes. Mind your own business.

[WTFH]

I emailed Brookson and they told me they were not planning to raise the limit, so I am assuming the £4k is set by them rather than the provider.

Bike prices have shot up over the last year and with more people wanting ebikes, £4k is no longer as ridiculous as you might think... I bought an ebike for £3k about 2 years ago (reduced from £3.7k) and looking now I'd need to spend over £5k to get one with similar spec!

If you bought a bike 2 years ago, why are you looking to replace it now?
What aren't you telling us?

[Rafd]

I emailed Brookson and they told me they were not planning to raise the limit, so I am assuming the £4k is set by them rather than the provider.

Bike prices have shot up over the last year and with more people wanting ebikes, £4k is no longer as ridiculous as you might think... I bought an ebike for £3k about 2 years ago (reduced from £3.7k) and looking now I'd need to spend over £5k to get one with similar spec!

[eek]

My assumption is that because they mention the 1k limit it's a little out of date as there is no limit now.

There's been no limit for a while but the removal of the limit created a whole different set of issues as any loan above £1000 has to come from an FCA approved firm...

And given how few people using this scheme would be looking at bikes over £4,000 (I can't imagine even DaveB has many bikes worth that amount) you can see why the limit is set as it is.