Half Price New Bikes? Ride to Work Scheme

#1
Apologies if this has been done before, but do any G1 gurus know if the Army / MOD support the ride to work scheme?

I found a link on e-goat, but it was inconclusive????

Sounds to good to be true (so probably is) but essentially you can save the tax and pay via a salary sacrifice scheme on the purchase of a new bike?

Some details here


http://www.evanscycles.com/ride2work/saving-calculator

If so, got my eye on a new cannondale~!!!!

D_D
 
#2
Sorry D_D I tried this recently citing all the common sense reasons why an organisation that relies upon puts should be part of this scheme. Having rung up the MoD scheme poc/JPA person can't remember exactly whom. I was told that the military would not be part of the scheme as it was too difficult to administrate!!! Best of luck though if things have changed.
 
#3
we already have other salary sacrifice schemes so the precedent is there; given the amount of people that cycle to work it would make sense...i will investigate tomorrow!!!
 
#4
D_D,
I emailed someone in MoD Main Building about this in 2007. I received a fairly comprehensive reply (which I have since deleted) stating that the changeover to JPA had caused some headaches and once the pain of implementing JPA had subsided the MoD would look at adopting this scheme. It's now 2009 and I've heard nothing else.

Perhaps a letter to Soldier magazine would be a good way of geeing them up. No doubt you'll get a reply from Brigadier Jamie Gordon, like everyone else does, stating all the reasons why it can't be done and none of the reasons why it should be done.

Good luck.
 
#5
late last year i spoke to my the head man at my unit, a brigadier about this on an inspection and he said that it wasnt going to be rolled out due to admin issues, but he was monitoring it as it would be a cracking scheme to have and would save my unit thousands in travel claims etc.
It no longer surprises me that a government scheme cannot be implemented by a government department
 
#6
if we cant administer a government scheme because its all too much like hard work. maybe we should employ some CS to manage it, as its purchasing bikes about 500 x CS should be sufficient if we dont want a turn around time of less than 6 weeks!!
 
#7
Azrael2006 said:
if we cant administer a government scheme because its all too much like hard work. maybe we should employ some CS to manage it, as its purchasing bikes about 500 x CS should be sufficient if we dont want a turn around time of less than 6 weeks!!
Ehh?
 
#8
I have also been investigatin the Ride to work "government incentive" it turns out that Civilian MOD employees can take advantage of this scheme but military employees can not. this is so stupid. Why can the army not do this. i currently claim £169 every month for a Oyster card that could otherwise be saved if the army would sponsor a bike for myself.
 
#10
It's all down to HDT and the taxman. If the MOD can find a way to do it that won't cost the MOD an extortionate amount of time, effort and money it will.
 
#11
USE THE SEARCH FUNCTION!

Mr_C_Hinecap said:
1. A common misconception is that the C2W scheme permits employees to purchase the bicycle tax free, this is not the case. The C2W scheme is a Tax-efficient bicycle loan arrangement which allows the employer to purchase cycling equipment which is then hired to the employees through Salary Sacrifice.

2. Salary sacrifice schemes require an employee to contractually reduce the amount of their Gross salary in exchange for a non-cash benefit. Non-cash benefits may still be taxable unless there is a specific HMRC exemption. For the C2W Scheme this tax exemption has been granted, but only applies if all the following HM Revenue and Customs conditions are met:

a. Employees use the equipment mainly for qualifying journeys (i.e. for journeys made between the employee’s home and workplace, or for journeys between one workplace and another) - that means it cannot be used for your own enjoyment/racing/training it is service equipment.

b. Ownership of the equipment is not transferred to the employee during the loan period.

3. In addition to these specific conditions for the C2WScheme, it is a HMRC stipulation for all Salary Sacrifice schemes that, in order to comply with Tax Legislation, the employee’s contractual right to cash pay must reduce. Therefore salary sacrifice may have an impact on other pay-related benefits such as Maternity Pay, Working Tax Credits or Final Salary-linked pensions. Additionally HMRC states that the employer must not simply meet the employee’s own financial commitments or apply cash remuneration on their behalf.

4. In addition to the HMRC conditions which are central to the implementation of the C2W scheme, there are a number of other impacts which must be considered.

a. Capital Expenditure. As it is the employer and not the employee who purchases and owns the cycling equipment, it is MOD who would fund the initial outlay of Capital Expenditure (although this will be recovered from individuals over the duration of hire period). These costs are dependent on uptake of the scheme. However it is possible that each individual could procure equipment up to £1,000 in value . On this basis, an annual take up of 2,000 people would involve in year outlay of £2million.

b. Contract Tender and competition process. The total value of the business would exceed the EU threshold for advertising of the contract (circa £100K). This would require a full Contract Tender process with associated manpower and expertise requirements and costs. The duration of the process from writing of business requirement to signing contract could be in excess of 18 months.

c. Management and Audit. To operate a purchase, hire and disposal system will have a sustained requirement for management, audit and HR/pay action. This creates additional management overhead costs and headcount.

d. Consumer Credit Act (CCA) 1974. There should be no automatic entitlement for the employee to take ownership of the cycle equipment at the end of the loan period . If after the end of the loan agreement the bike is offered for sale, the employee must pay a “fair market value. ” If this is recovered from pay it must be from Net Salary. VAT must also be paid on the purchase price. This specific restrictions in the CCA complicates the issues surrounding the sale/disposal of bikes (eg what is the mechanism for valuation, should this be conducted by Disposals Services Agency).

e. Impact on existing allowances. Non-taxable benefits cannot be double paid for the same purpose. MOD currently enjoys a specific tax exemption from HMRC allowing the payment of a tax free allowance for commuting journeys. This takes the form of the Home to Duty Travel Allowance (HDT) which includes Motor Vehicle and Cycle rates or payment. HDT travel (Cycle Rate) contributes to the cost of owning, running and maintaining a bike. HDT travel could not be paid in conjunction with the Cycle Scheme as the scheme requires that at least 50% of the journeys on the bike must be qualifying journeys for work purposes.

Is THAT clear enough - for a second time? :roll:
 
#12
Mr_C_Hinecap said:
USE THE SEARCH FUNCTION!

Mr_C_Hinecap said:
1. A common misconception is that the C2W scheme permits employees to purchase the bicycle tax free, this is not the case. The C2W scheme is a Tax-efficient bicycle loan arrangement which allows the employer to purchase cycling equipment which is then hired to the employees through Salary Sacrifice.

2. Salary sacrifice schemes require an employee to contractually reduce the amount of their Gross salary in exchange for a non-cash benefit. Non-cash benefits may still be taxable unless there is a specific HMRC exemption. For the C2W Scheme this tax exemption has been granted, but only applies if all the following HM Revenue and Customs conditions are met:

a. Employees use the equipment mainly for qualifying journeys (i.e. for journeys made between the employee’s home and workplace, or for journeys between one workplace and another) - that means it cannot be used for your own enjoyment/racing/training it is service equipment.

b. Ownership of the equipment is not transferred to the employee during the loan period.

3. In addition to these specific conditions for the C2WScheme, it is a HMRC stipulation for all Salary Sacrifice schemes that, in order to comply with Tax Legislation, the employee’s contractual right to cash pay must reduce. Therefore salary sacrifice may have an impact on other pay-related benefits such as Maternity Pay, Working Tax Credits or Final Salary-linked pensions. Additionally HMRC states that the employer must not simply meet the employee’s own financial commitments or apply cash remuneration on their behalf.

4. In addition to the HMRC conditions which are central to the implementation of the C2W scheme, there are a number of other impacts which must be considered.

a. Capital Expenditure. As it is the employer and not the employee who purchases and owns the cycling equipment, it is MOD who would fund the initial outlay of Capital Expenditure (although this will be recovered from individuals over the duration of hire period). These costs are dependent on uptake of the scheme. However it is possible that each individual could procure equipment up to £1,000 in value . On this basis, an annual take up of 2,000 people would involve in year outlay of £2million.

b. Contract Tender and competition process. The total value of the business would exceed the EU threshold for advertising of the contract (circa £100K). This would require a full Contract Tender process with associated manpower and expertise requirements and costs. The duration of the process from writing of business requirement to signing contract could be in excess of 18 months.

c. Management and Audit. To operate a purchase, hire and disposal system will have a sustained requirement for management, audit and HR/pay action. This creates additional management overhead costs and headcount.

d. Consumer Credit Act (CCA) 1974. There should be no automatic entitlement for the employee to take ownership of the cycle equipment at the end of the loan period . If after the end of the loan agreement the bike is offered for sale, the employee must pay a “fair market value. ” If this is recovered from pay it must be from Net Salary. VAT must also be paid on the purchase price. This specific restrictions in the CCA complicates the issues surrounding the sale/disposal of bikes (eg what is the mechanism for valuation, should this be conducted by Disposals Services Agency).

e. Impact on existing allowances. Non-taxable benefits cannot be double paid for the same purpose. MOD currently enjoys a specific tax exemption from HMRC allowing the payment of a tax free allowance for commuting journeys. This takes the form of the Home to Duty Travel Allowance (HDT) which includes Motor Vehicle and Cycle rates or payment. HDT travel (Cycle Rate) contributes to the cost of owning, running and maintaining a bike. HDT travel could not be paid in conjunction with the Cycle Scheme as the scheme requires that at least 50% of the journeys on the bike must be qualifying journeys for work purposes.

Is THAT clear enough - for a second time? :roll:

What a load of Bull!!!

Another person not trying to see the positive of the situation. I would like to respond to some of the points you made.

Points 1 & 2 : I’m fully aware what the Salary sacrifice schemes involves and what benefits and disadvantages it has to offer and I’m also aware that the bike isn’t tax free, don’t treat us all like idiots.

Point 2a. You state that the bike cannot be used for personal use outside cycling to work, this is incorrect as the following quote taken from the government website proves : “Employees should use the bike mainly for commuting to and, if relevant, between work places (at least 50% of the bike’s use should be for work purposes). However, the bike can also be used for non-work purposes and there is no need for employers to monitor individual usage or for employees to keep a mileage log.”

Your point about capital expenditure is an extremely weak one. You mention that the MOD would have to potentially hand out £2m at the start of the scheme, you fail to mention that the MOD wouldn’t pay NI on £2m of wages ergo a saving of about £250,000 (not a bad return in the current market). This figure doesn’t include the buy back for the bike after 3 years, if you say the bike is worth 5% after 3 years there is another £100,000 for all the penny pinchers out there.

Your argument of the cost to admin the scheme doesn’t wash as far as I’m concerned as the whole reason for JPA was for us all to be able to administrate ourselves easier and more efficient (The jury’s still out there). There are civilians firms out there who charge a set fee of 7% of the cost of the bike to complete all the paperwork and administer the distribution of the vouchers and paperwork.

All this pales into insignificant when you consider the advantages of the scheme:
1. Employee’s will become healthier.
2. You will save on our carbon footprint.
3. This is a way of under paid soldiers to gain a bike for 40 – 50% of its RRP.
4. You feel as though you are being looked after by your employer.

To conclude I would like to point out that almost all of the councils in England have signed up to the scheme as well as hundreds of other companies and they all faced the same challenges that are imposed on us the one difference is they got off their backside and did something about it. (Be the Best)
Rant over.
 
#13
Someone somewhere is just too lazy to make it happen. That'll be the public sector then.

My local bike shop sorted it for their 5 employees. It is a shame that it is not available for the self-employed.

msr
 
#14
Rockhopper - you can say what you want. That post was a direct lift from the then Chairman of a Service Cycling Club who got that from on high where he had asked - officially. I want Ride To Work more than you know and engaged directly several years ago.

If you think you can get a better reply, crack on. I'm more than happy with an answer from the relevant department via representative association. I've fought this myself and got nowhere.

FYI - I have probably done more for cycling in the MOD than you'll ever know - but I don't wave my c0ck around about it. Please keep the insults down you dullard - you have no idea who I am or what I do. If you are involved in Mil cycling, drop me a PM and we'll talk.
 
#15
My civvy employer offered this last year, and it was a good scheme - For the first time ever I bought a decent bike + accessories and it cost me about £20 per month (net) for a year, plus a tiny buy-back amount at end-of-term.

Thought I'd go for this again, to get the Mrs a bike, and my lovable HR tells me that we aren't taking part again!

Apparently the payroll/salary sacrifice issues are too much for our new pay system to cope with, plus they gave a load of Health & Safety reasons why it couldn't happen - too much admin in the scheme, not enough showers, not enough parking spaces (!!) etc etc.

Further, we won't even be paying any mileage allowance if I use my bike for Business Miles any more... I used to be able to get up to 2p per mile (maybe more if I gave a "backy" to someone!) - so the Green theme has been completely erased from our transport policy - which is a real shame.
 
#16
passing_crab said:
My civvy employer offered this last year, and it was a good scheme - For the first time ever I bought a decent bike + accessories and it cost me about £20 per month (net) for a year, plus a tiny buy-back amount at end-of-term.

Thought I'd go for this again, to get the Mrs a bike, and my lovable HR tells me that we aren't taking part again!

Apparently the payroll/salary sacrifice issues are too much for our new pay system to cope with, plus they gave a load of Health & Safety reasons why it couldn't happen - too much admin in the scheme, not enough showers, not enough parking spaces (!!) etc etc.

Further, we won't even be paying any mileage allowance if I use my bike for Business Miles any more... I used to be able to get up to 2p per mile (maybe more if I gave a "backy" to someone!) - so the Green theme has been completely erased from our transport policy - which is a real shame.
Public sector?
 

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