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Poll

What bicycle do you ride on, to your NHS workplace?

All about cycling..
1. Tourer
 
14% (1 votes)
2. Mountain Bike
 
0% (0 votes)
3. Racer
 
0% (0 votes)
4. Folding Bike
 
0% (0 votes)
5. Hybrid Bike
 
86% (6 votes)
6. Electric Bike
 
0% (0 votes)
7. A Trike
 
0% (0 votes)
8. recumbent bicycle
 
0% (0 votes)
9. Cargo bike
 
0% (0 votes)
10. eCargo bike
 
0% (0 votes)
11. Vintage Bike pre 1980's
 
0% (0 votes)
 

Trust reluctance to set-up bike to work scheme...

Up to Cycling Forum
January 06. 2011
Martin Storer

My trust is reluctant to set-up a bike to work scheme for it's employees claiming that it would be too costly to set-up and maintain!

Has anyone had experience of this kind of attitude and suggestions on how to overcome it? All the other trusts in our area are operating a scheme.

January 06. 2011
Simon Potter

Explain (patiently and using small words) that there are numerous companies who will run the scheme for them.

They also may want to consider that any scheme may also contribute to the Trusts carbon reduction target.

I hope this helps

January 06. 2011
David Winnup

If you mean a scheme like Cyclescheme to buy bikes ...

Our Trust set the scheme up in September 2009, at the time it was a good deal, but even then many of us had to pay a premium at the bike shop for using the scheme, or at least we did not get anywhere near the "Best Price" we could have got by not using the scheme.

With the new final valuation rules imposed by HMRC I would do some serious calculations to see if it is really worth it.

It seems best for higher rate tax payers who work in an organisation that can reclaim VAT, neither of which was true for most of us here.

January 06. 2011
Dominic Mellon

I've just bought a replacement bike on Cyclescheme as mine was nicked just before Christmas.

On reflection, I'm not sure it was the best deal.  The scheme advertised saving around 40-50% but when I worked out the repayment schedule against the projected tax savings this came out much less and I won't actually own the bike for 3 years due to the final valuation rules and Cyclescheme's extended lease hire agreement.  As David mentioned, I had to pay full whack for the items on the quote (even though there were discounts on them by the time the order arrived).

Buying a bike in the sales with a 0% finance deal may well work out to be a better prospect, which is sad because at first glance it looks like a great way to encourage active travel in the workplace.

January 06. 2011
Gerard Little

I'm about to buy a bike on the NHS scheme which is 'bikes for the NHS' run by 'smehci'.  If you look at the intro pack on smehci's website it explains the benefits to both the employer and employee. http://smehci.com/index.html

As a basic rate payer you save 22% of the value on tax contributions and 11% on National insurance, but you have to pay around a 10% fee at the end of the year. The employer gets to save money on their empoyer national insurance contributions. 

Bike shops have offered me 10% discount but with the scheme I will be saving around 22% it seems.  Once you sign up you should be able to see a brochure which explains how much discount you will get (I will definitely get 22% which makes the scheme worthwhile)

hope this helps.

January 06. 2011
Phil Williams

Hi All,

We went live in July/August 2010 after a year of negotiating to get a scheme in place.

I was responsible for the campaigning and project planning, and had to submit 2 reports to the director of finance and executive boards to get approval for a cost-neutral scheme, so I appreciate the hassle it can be to get non-interested Directors on the right side, especially as a volunteer with a proper day job.

As Simon says above, pushing the organisational carbon benefits is a help, as well as more parking spaces, healthier workforce etc.

I wouldn't recommend setting up your own scheme given your trust's reluctance, so going to an off the shelf company would make it a lot easier. The work involved is minimal, setting up/reconciliation of control accounts and ensuring payroll process the salary sacrifice is basically it. Then it's just important to keep track of leavers and transfers, but unless you work in HR or finance that won't be up to you. 

The cost to the Trust is negligable. They have to fork out up front, but we just set a cap at £30k in an annual window, and once this was reached we accepted no more applications. It's repaid back to the Trust in full within 12 months, so loss of interest is the only financial negative.

Things are more complicated now we've been hit with the new HMRC guidelines, however there are ways around it. We havent totally decided which route to go down as yet, but it looks as though upon completion of the Salary Sacrifice the bikes will be given to staff as a benefit in kind. The staff will therefore only need to pay tax on the HMRC valuation via a P11D. This certainly won't be more than the equivilent to an extra monthly payment. Yes the Trust will lose out, but only on 5% of the £30k which they would have originally received, which in the grand scheme of things isn't huge.

We went with Halfords who seemed to be the only not-for-profit company providing the scheme. All the others including Bikes for NHS (who pestered me continuously and are obviously not an NHS organisation) are small privately run companies who need to make a profit, which obviously impacts upon staff savings.

There were clearly other factors too, due to the geographical footprint of being a mental health trust we couldn't go to one local supplier, so a national chain made it fair for all staff in all locations to get the same product at the same prices, with the same warranties etc.

Hope this helps a bit, but feel free to get in touch if you want to discuss in greater detail

Phil

January 06. 2011
niggle

Sorry about the above post....

 

My trust went with Bikes for the NHS, recently other staff have had the final payment increased to 25% plus VAT (for higher value bikes) following the HMRC rule clarification. I doubt the legality of this and intend to fight it prior to the end of the hire period for my bike in about May. For one thing I was given a Hire Agreement' which states the final payment (Disposal Fee) in £s plus VAT, so I don't know on what authority they can vary that. I believe all that should happen is that I should pay 'benefit in kind' tax on the difference between the Disposal Fee and 25% of the value. I am going to seek help from the RCN and/or the CTC with this as I think this is opportunistic profiteering by the company behind Bikes for the NHS and not something that the rule clarification requires.

January 06. 2011
Phil Williams

Hi Nigel,

and apologies everyone for another wordy reply!

I don't know the specifics of the Bikes for the NHS scheme since the HMRC guidance came in, but this is the very reason I avoided them when selecting a scheme provider. Their profit from the scheme has always been made by pocketing the final payment, therefore they have no interest in reducing what the scheme members have to pay.

This is why other more sympathetic schemes have now increased the hire term, so the final amount due on an older bike will be a lower percentage than one that's just a year old, or scrapped the disposal fee and gifted the bikes to employees. That is out of your organisation's hands because until that final payment the bikes belong to Bikes for NHS, not to your Trust.

It's certainly worth pursuing. As you say, you signed up to the scheme with a clear understanding of what you would pay and the goalposts have been moved. You're totally right. At the most you should be expected to pay the final payment as originally stated, and then to pay Benefit In Kind tax on the difference between the HRMC valuation of the bike and the original disposal fee. Remember though that the percentage table is a guide only. If you can prove that your bike is worth less then you are only liable for that amount.

The whole thing needs to be rethought though. What scheme should penalise people who look after their bikes and keep them in good condition, when if you don't bother you end up paying less?

February 14. 2011
sally jenks

Previously Martin Storer wrote:

My trust is reluctant to set-up a bike to work scheme for it's employees claiming that it would be too costly to set-up and maintain!

Has anyone had experience of this kind of attitude and suggestions on how to overcome it? All the other trusts in our area are operating a scheme.

We only open the scheme up for 1 month each year ( April).  It is then  a very short  timescale for administrating the scheme, and focuses staff on taking action if they want to participate.

Again, it is a really useful activity for reporting on travel plan implementation, carbon reduction and GCC scoring.

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