Bike to Work scheme - the Megathread - Read post #1 before posting

CramCycle

Presumably your paying monthly over 12 months, so you will make the savings next year for 5/12 of the bike, and as Cython said, it depends how far into the Higher bracket you jumped but it will only be for 7/12 of the bike.

larryone

Beasty wrote: »

Bike parts or frames do not qualify – it must be a complete bike plus the safety equipment identified above

So I have a really good frame with really crappy components.
I know parts dont qualify, so I can't buy a Deore groupset on its own.
But.
Could I get a bike shop to build a bike for me with the cheapest frame existing (possibly even a child's) but a really good groupset...?
Would this qualify, assuming a bike shop would be ok doing this for me?

Idleater

Yes. Beasty is technically incorrect (in the quote above) , the stipulation is the bike must be complete, not parts.
I specced a frame, groupset and finishing kit for my build.

axcel

Hi

This scheme was just introduced by my employer yesterday, and we've been told that we submit the quote to bike4work, on the first of the next month they'll send my employer an invoice, my employer will send back a cheque and then I get the voucher in the post! Sounds so complicated for a simple process but anyway. I should get the voucher by the 25th of August!

Anyone else had experience of this?
I had been told previously by hr it would only take 5 days for a cheque, but they literally introduced this the day after I got the invoice after spending a couple of weeks finding the right bike. I had stupidly been bargaining on the 5days still.

I'm eager to get the bike before the end of the summer! I emailed One4all yesterday to see if this can be sped up but haven't heard anything yet. Going to call them tomorrow.

But just wanted to see if this was the norm or has anyone managed to get this process sped up? Must be a disaster if you are trying to get a deal or a bike on sale.

Thanks

Beasty

Idleater wrote: »

the stipulation is the bike must be complete, not parts.

Isn't that what I said?

Idleater

Beasty wrote: »

Isn't that what I said?

Most likely, I just read it as no frames at all probably due to sub quoting. I was clarifying :-)

CiniO

dogsears wrote: »

Just in case anyone's still interested, the above is correct. At least, I checked it with a colleague who's a PRSI expert and she said its correct. The salary sacrifice used to pay for the bike is recognised in working out if you're over the €352 per week or not and the calculations aren't cumulative over the year so the additional €56 savings on buying a bike under the BTW scheme as set out in the initial post on this should hold.

Just to double confirm.
It works like you confirmed, so extra savings can be achieved.
Additionally there are even more huge savings possible in certain cases.

Best savings for someone who's not above 41% income tax treshold can be achieved actually for person on fairly low salary.

Example:
Salary €19,300 per annum.
That gives weekly salary of €371.15

If you buy a bike for €1000, and spread your repayments over whole year (52 weeks) - €19.23 weekly - then it comes as follows.

Your weekly wage comes down from €371.15 to €351.92. This puts you below PRSI treshold (employees at €352 or under don't pay PRSI).

So savings are as follows.
20% income tax on €1000 (value of bike) = €200
7% USC on €1000 (value of bike) = €70
4% on whole salary €19,300 = €772
Total savings: €1042

Result is quite ridiculous, but that's exactly how it adds up.
Not only you get your €1000 worth bike for free, but you additionally make 42 quid. Example I choose is the pretty much the best you can get, as once you are below or above €19,300 per annum, your savings will be lower.

Statler

Anyone bought a bike from Canyon through the bike to work scheme lately? They're telling me they can't discount the German VAT rate, which shouldn't be the case as I'm buying it through the company so can provide them with an Irish VAT number, they should discount their VAT rate and the Irish VAT rate is then applied at this end. That's the way it worked the last time I bought from them, now they're telling me it can't be done, just wondering if anyone has any recent experience with them....

TychoCaine

Statler wrote: »

Anyone bought a bike from Canyon through the bike to work scheme lately? They're telling me they can't discount the German VAT rate, which shouldn't be the case as I'm buying it through the company so can provide them with an Irish VAT number, they should discount their VAT rate and the Irish VAT rate is then applied at this end. That's the way it worked the last time I bought from them, now they're telling me it can't be done, just wondering if anyone has any recent experience with them....

That's not how the scheme works. The scheme requires that your employer buys the bike inclusive of VAT. It's not like a normal import/resale where they buy in a good VAT free, apply Irish VAT (which they remit to revenue as part of their normal VAT return) and sell it to you.

Separately, as long as a German seller's sales into Ireland exceed a certain threshold (which I'm certain Canyon's do), they're required to sell the bike to you with Irish VAT rates applied instead of the German rate, but that's all managed by Canyon.

Gary

Beasty

TychoCaine wrote: »

That's not how the scheme works. The scheme requires that your employer buys the bike inclusive of VAT. It's not like a normal import/resale where they buy in a good VAT free, apply Irish VAT (which they remit to revenue as part of their normal VAT return) and sell it to you.

But that's not how VAT works. The VAT rules are set out in the first few posts in the thread.

The employer buys the bike under the normal VAT rules, which in this case means it's treated as zero rated import. The employer then applies Irish VAT when selling the bike to the employee

del_boy13

Beasty wrote: »

But that's not how VAT works. The VAT rules are set out in the first few posts in the thread.

The employer buys the bike under the normal VAT rules, which in this case means it's treated as zero rated import. The employer then applies Irish VAT when selling the bike to the employee

I had a similar experience with Canyon recently so I bought one from Rose instead. Very similar bikes with just slight differences in spec.

Statler

Beasty wrote: »

But that's not how VAT works. The VAT rules are set out in the first few posts in the thread.

The employer buys the bike under the normal VAT rules, which in this case means it's treated as zero rated import. The employer then applies Irish VAT when selling the bike to the employee

Canyon have come back to me and said that due to the high number of people giving VAT numbers to get the German VAT of 19% taken off without the company they work for knowing (meaning the Irish VAT rate is never applied, i.e. tax fraud) that they've introduced a policy of not taking VAT off the invoice. Since it's the Irish taxpayer losing out if people pull this sort of stroke I don't understand Canyon taking this approach, but maybe they're getting grief from the German tax authorities, they suggest that my accounting department can still reclaim the VAT by submitting the invoice with their tax returns but it's going to be too much grief to get them to do this, they're insisting that it has to be done as Beasty described above. Long story short is I won't be buying a Canyon this time, their loss I suppose but I did have my heart set on a CF SLX...

del_boy13 wrote: »

I had a similar experience with Canyon recently so I bought one from Rose instead. Very similar bikes with just slight differences in spec.

Was looking at the Rose site alright, definitely good value, I prefer the look of the Canyon but may well have to change my mind....

drik

Hi All

Silly question but can you buy two bikes under the scheme? My employers run the scheme and I would love a new bike - as would my husband but his employers don't offer the scheme.

I'm guessing its against the rules?

Thanks!

dogsears

drik wrote: »

Hi All

Silly question but can you buy two bikes under the scheme? My employers run the scheme and I would love a new bike - as would my husband but his employers don't offer the scheme.

I'm guessing its against the rules?

Thanks!

Unfortunately not. First problem is your husband would have to get one through his employer and if they don't offer the scheme he can't do it. You can't get one for him through your employers scheme.

And you can only get one bike every 5 years anyway.

You get your bike, and when you replace it in 5 years, you can pass it on to him!;)

CramCycle

drik wrote: »

Hi All

Silly question but can you buy two bikes under the scheme? My employers run the scheme and I would love a new bike - as would my husband but his employers don't offer the scheme.

I'm guessing its against the rules?

Thanks!

It is alas, as I think many would avail of the option if available, best he can hope for is to annoy the hell out of his employer and hope he craves, worth mentioning to then that they save money as well on employers PRSI and the like.

drik

Ah that's a pity. I was going to sacrifice my bike for his if I couldn't buy two. Not to worry. Thanks for answering!

BoardsMember

I need some clarifications on the VAT element.....I'm not 100% clear but I haven't read all 44 pages so please forgive if I have missed it.

If there is no VAT on the invoice to the Employer Company (i.e. Irish VAT number Supplied to German company), does the Employer Company have to apply 23% VAT to the cost of the bike before "selling" the bike to the employee? And then it adds this VAT Amount to the VAT on Sales, so revenue receives the VAT element.

Is this right?

Statler

BoardsMember wrote: »

I need some clarifications on the VAT element.....I'm not 100% clear but I haven't read all 44 pages so please forgive if I have missed it.

If there is no VAT on the invoice to the Employer Company (i.e. Irish VAT number Supplied to German company), does the Employer Company have to apply 23% VAT to the cost of the bike before "selling" the bike to the employee? And then it adds this VAT Amount to the VAT on Sales, so revenue receives the VAT element.

Is this right?

That's it in a nutshell.

jamesd

drik wrote: »

Hi All

Silly question but can you buy two bikes under the scheme? My employers run the scheme and I would love a new bike - as would my husband but his employers don't offer the scheme.

I'm guessing its against the rules?

Thanks!

A friend of mine for 3 bikes for the €1000 total under the scheme.

Beasty

jamesd wrote: »

A friend of mine for 3 bikes for the €1000 total under the scheme.

Your friend broke the law and encouraging others to break the law is not permitted on this site, so please leave it there

Thanks

Beasty

BoardsMember

I'm being told by my accountant that if buying from Germany that the Employer should not supply the VAT Number as part of the purchase. You the German VAT, and leave it at that, i.e. you pay the VAT in the country of supply.

This approach certainly keeps things simpler for the Company.

Statler

BoardsMember wrote: »

I'm being told by my accountant that if buying from Germany that the Employer should not supply the VAT Number as part of the purchase. You the German VAT, and leave it at that, i.e. you pay the VAT in the country of supply.

This approach certainly keeps things simpler for the Company.

It also makes things simpler for your accountant! Not sure of the legalities of doing it that way but the German VAT rate is 19% for bikes as opposed to our 23%, so by opting to pay the German rate you save 4%...

Beasty

I actually think you could be liable for VAT in both countries by not supplying the VAT number to the retailer. The Irish Revenue are certainly losing out otherwise and the correct VAT is not being applied (unless the employer is not VAT registered in Ireland)

RedXIV

I'm 90% sure I know the answer here but if I swap employers does the eligibility reset? I got one with old employer 2 years ago and starting with new employer next week?

BoardsMember

Beasty wrote: »

I actually think you could be liable for VAT in both countries by not supplying the VAT number to the retailer. The Irish Revenue are certainly losing out otherwise and the correct VAT is not being applied (unless the employer is not VAT registered in Ireland)

I can't imagine you'd have to pay VAT in both countries.

Revenue lose out on VAT when I buy things in Europe ordinarily. Unless someone has something categorically correct I will follow the suggestions of the accountant.

Kinet1c

If both companies are VAT registered, typically there would be no VAT charged on the invoice. The Irish company would need to provide their VAT number to the German company for verification/documentation purposes.

On the chance that the German company's turnover in Ireland exceeds a certain amount, then they would need to register for VAT here in Ireland also.

I can't think of a case where VAT would be paid in both countries for inter EU transactions.

CramCycle

RedXIV wrote: »

I'm 90% sure I know the answer here but if I swap employers does the eligibility reset? I got one with old employer 2 years ago and starting with new employer next week?

There was debate on here about it, I have done it, the wording of the legislation implies that it is once every 5 years per employment. Different employer, different employment.

Idleater

CramCycle wrote: »

There was debate on here about it, I have done it, the wording of the legislation implies that it is once every 5 years per employment. Different employer, different employment.

Why would a civil servant even consider giving up a job for something elsewhere :-D

Beasty

BoardsMember wrote: »

I can't imagine you'd have to pay VAT in both countries.

Revenue lose out on VAT when I buy things in Europe ordinarily. Unless someone has something categorically correct I will follow the suggestions of the accountant.

The scenario you outine would mean German VAT would automatically be collected. However the Irish Revenue are losing out and would look for their correct return. You then need to be able to persuade the German tax authorities to give the money you have paid them back. My dealings with the German tax authorities are not particularly extensive, but I've tended to find them quite difficult to deal with

Under the distance selling rules (and VAT is a Eupoean Tax which is applied consistently across the EU) as an individual you pay the VAT in the selling country unless the seller is registered for VAT in Ireland (in which case they charge Irish VAT). Sorry but them's the rules ...

BoardsMember

Ok. That makes sense to me. As in the seller is my employer and not the company in germany. Maybe I'll ignore the accountant!

RainyDay

CramCycle wrote: »

There was debate on here about it, I have done it, the wording of the legislation implies that it is once every 5 years per employment. Different employer, different employment.

Any chance of a link to the debate? This goes against my understanding.

CramCycle

RainyDay wrote: »

Any chance of a link to the debate? This goes against my understanding.

I could be wrong but I am pretty sure it is covered in this thread.

Beasty

I think it's been mentioned a couple of times in this thread (and possibly some of the thread's predecessors). I am of the view the 5 years relates to each employment as set out by Cram, and my interpretation is based on the wording adopted. We have one or two other tax experts who have offered the alternative interpretation. It's unlikely ever to be tested as no-one is likely to go to court over something so small.

EDIT - the latest discussion on the point in this thread was around 4 January this year

mathie

Are Wiggle and CRC definitely registered for VAT in Ireland?

Are any other UK stores?

thanks
m

Beasty

mathie wrote: »

Are Wiggle and CRC definitely registered for VAT in Ireland?

Yes, as are the likes of Amazon

Not aware of any other major UK cycling gear online retailers, but if you check online and ensure you show the delivery destination as Ireland you will see a slight price difference with when it's the UK

Kaisr Sose

del_boy13 wrote: »

I had a similar experience with Canyon recently so I bought one from Rose instead. Very similar bikes with just slight differences in spec.

Interesting.

Will Rose submit an invoice with VAT at 23℅? Was the sale under the cycle to work scheme?

I would guess they have to apply 23% to the transaction.

bwalsh1983

More than likely has ben answered before but is it straightforward enough buying something from across the border through the bike to work scheme?

My company uses one of the schemes but this is only to make it easier for HR, if the shop in the north supply me with a quote it should be straightforward from there no?

Beasty

Kaisr Sose wrote: »

Interesting.

Will Rose submit an invoice with VAT at 23℅? Was the sale under the cycle to work scheme?

I would guess they have to apply 23% to the transaction.

No-one make any sales under the bike to work scheme. They make a sale to your employer applying the correct VAT. So far as the retailer is concerned that is the end of the matter

Beasty

bwalsh1983 wrote: »

More than likely has ben answered before but is it straightforward enough buying something from across the border through the bike to work scheme?

My company uses one of the schemes but this is only to make it easier for HR, if the shop in the north supply me with a quote it should be straightforward from there no?

The employer buys the bike. They can buy it from where they like. If they are happy paying a foreign retailer then that's fine

Kaisr Sose

bwalsh1983 wrote: »

My company uses one of the schemes but this is only to make it easier for HR, if the shop in the north supply me with a quote it should be straightforward from there no?

I would say its up to your company to agree to a direct payment. Many large employers go the voucher route to avoid lots of direct payments to multiple retailers.

BoardsMember

Kaisr Sose wrote: »

Interesting.

Will Rose submit an invoice with VAT at 23℅? Was the sale under the cycle to work scheme?

I would guess they have to apply 23% to the transaction.

Rose should submit an invoice to the employer. Ideally the employer should have supplied thier VAT number, so the only invoice should have no VAT. When the employer sells the bike to you under the bike to work scheme they must charge you VAT at 23%. Its the VAT inclusive amount that constitutes the 1k BIK b2w scheme threshold.

Omega28

How can you get a family member to purchase it for you under this scheme?

Kaisr Sose

Beasty wrote: »

No-one make any sales under the bike to work scheme. They make a sale to your employer applying the correct VAT. So far as the retailer is concerned that is the end of the matter

I don't understand that post. No-one makes any sales under the bike to work scheme? As you then say, the shop makes the sale to the employer. That's how the scheme works whether the retailer is across the road or overseas.

However the VAT invoice is crucial to this transaction. If the overseas retailer does not charge VAT at 23%, the employer must self assess for the difference. However, there seems to be some doubt/difference as to whether the employer can then reclaim the full amount of VAT. That is why many employers won't facilitate purchases from overseas. (Correct me if wrong there)

My employer will operate the scheme with an overseas supplier, if they have an Irish VAT numbern(eg wiggle, who have an Irish VAT number). However, they might consider a purchase from an overseas supplier with no Irish VAT no. once they invoice in euro and apply VAT at 23%, provided the VAT issue can be treated the same as if buying from an Irish VAT reg supplier. (Hence the VAT/invoice question about Rose)

For the employer, that (VAT) is what is important. Its certainly not about the retailer and for the employer it certainly does not end with the retailer. If the VAT operation is wrong, there will be no sale/purchase from a non Irish supplier. ( for my employer anyway)

Many non Irish retailers, such as bike24.de charge VAT at 23% because they exceed the threshold for sales to Ireland. Same as buying from amazon, when you enter the delivery address as Ireland, the price changes to reflect the local VAT rate. Revenue (Ireland) get this VAT.

My question was as to whether Rose were the same. I assume they are as 50k of sales is the threshold for having to charge VAT at Irish rates on sales to Ireland.

I must paraphrase that I am not an accountant, but I know a little about self assessing for VAT. I don't think you fully understood my post, as the response gave information I was not looking for.

Can anyone advise on my question about Rose?

Kaisr Sose

BoardsMember wrote: »

Rose should submit an invoice to the employer. Ideally the employer should have supplied thier VAT number, so the only invoice should have no VAT. When the employer sells the bike to you under the bike to work scheme they must charge you VAT at 23%. Its the VAT inclusive amount that constitutes the 1k BIK b2w scheme threshold.

Are you sure the VAT is excluded from the retailer invoice? Companies, whether VAT registered or not, must pay VAT at the applicable rate for all purchases.

Even if the applicable rate is 0%, the invoice for goods must include the VAT rate and amount. The company (employer) can then reclaim the VAT on purchases against VAT on sales.

If the supplier is non EU, or does not include VAT (eg. not VAT reg) , the company must self assess for VAT. This applies to all goods and I reckon that VAT law makes no exception for purchases of Bikes over other goods.

dreamerb

Dylanmc111 wrote: »

How can you get a family member to purchase it for you under this scheme?

You can't. Not legally. It's a condition of the scheme that the bicycle is for the employee and is intended to be used (partly or mainly) to cycle to work.

GeneralC

Two bike stores told me today I can get a family member to purchase it, then I can give them the money...

Kinet1c

GeneralC wrote: »

Two bike stores told me today I can get a family member to purchase it, then I can give them the money...

My friend Bob told me that he got a bike a few years ago by doing this, keeping his own alive for a further purchase down the road.

dreamerb

GeneralC wrote: »

Two bike stores told me today I can get a family member to purchase it, then I can give them the money...

Yeesh. It's illegal. Is it done? Yes. But it's illegal and the person in the frame if it's discovered is the family member, not the person who gets the bike.

If you don't qualify for the cycle to work scheme yourself, there are better deals available secondhand than ever. Lots of people sell on the barely used legitimately bought bikes after wussing out.

GeneralC

dreamerb wrote: »

Yeesh. It's illegal. Is it done? Yes. But it's illegal and the person in the frame if it's discovered is the family member, not the person who gets the bike.

If you don't qualify for the cycle to work scheme yourself, there are better deals available secondhand than ever. Lots of people sell on the barely used legitimately bought bikes after wussing out.

I've been looking on the likes of adverts/donedeal for a decent road bike, but haven't seen much

CramCycle

GeneralC wrote: »

Two bike stores told me today I can get a family member to purchase it, then I can give them the money...

MOD VOICE: Two bike stores have advised you that they will help facilitate fraud. The next person to suggest it or advise anyone to do it will be carded.