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

cython

So just thinking about BTW in light of the budget, while there were no direct changes to it, it stands to reason that the saving to be made on BTW purchases under the 2015 taxation will be less than in 2014 in many cases, due to the reduced PAYE rates. However, if you earn > €70k, I believe the savings available will be pretty much the same as now, as the effective tax rate in that region of earnings is basically unchanged. Do I have that correct (pure curiosity here, mind!), or does anyone better informed care to offer a more accurate interpretation?

dogsears

cython wrote: »

So just thinking about BTW in light of the budget, while there were no direct changes to it, it stands to reason that the saving to be made on BTW purchases under the 2015 taxation will be less than in 2014 in many cases, due to the reduced PAYE rates. However, if you earn > €70k, I believe the savings available will be pretty much the same as now, as the effective tax rate in that region of earnings is basically unchanged. Do I have that correct (pure curiosity here, mind!), or does anyone better informed care to offer a more accurate interpretation?

I think that's right. If you earn more than €70 K then before these Budget changes, your overall taxes on your top €1000 would have been Income tax at 41%, PRSI at 4% and USC at 7%, total 52%. After these changes your taxes will be IT at 40%, PRSI at 4% and USC at 8%, total 52%.

So the benefit of the tax relief under the BTW will be 52% in each case.

If you're a higher rate taxpayer earning less than €70k, your tax saving on spending the €1000 max under the scheme will be worth 1% less i.e €10 less.

Looks like the rich guys win again!;)

Helpneeded86

What would someone making 30k a year when all taxables are taken in to account save on a 1k purchase? Some of the calculators give me the full saving of 52% but the chat above does not make it sound like that.

CramCycle

Helpneeded86 wrote: »

What would someone making 30k a year when all taxables are taken in to account save on a 1k purchase? Some of the calculators give me the full saving of 52% but the chat above does not make it sound like that.

This year it would have been approximately 27% if you spent the full amount, next year I think it will be slightly less but cannot be certain at the minute.

encryptix

Im posting this on behalf of a friend, I have read through this thread and cannot find a definite answer.

I am thinking of doing the bike 2 work scheme and I want to make sure I will save 52% and not the lower rate of 31%.

I only started this job a few months ago so I am not yet earning enough to be paying the higher tax rate, but with my annual salary above the higher tax cutoff rate, I will be paying the higher rate eventually.

Does this mean I will save 52% on the bike to work scheme because I will eventually pay the higher tax rate or does the scheme only look at the rate of tax that I am currently paying?

To confuse me even more my company will take all the money I owe in one lump (At the end of this month, where i will be still paying the lower amount of tax) and not spread the repayments over 12 months as most company's doing the scheme appear to do.

Any help would be much appreciated!

Beasty

If you end up paying 52% before the end of this calendar year (ie the tax year) that will be your marginal rate of tax and you should save that amount

If however you don't start paying the higher rate until next year you will only save the lower rate

howardmarks

Beasty wrote: »

If you end up paying 52% before the end of this calendar year (ie the tax year) that will be your marginal rate of tax and you should save that amount

If however you don't start paying the higher rate until next year you will only save the lower rate

My advice would be to wait til the new year. It's only 2 months and it can take that long to find the right bike for some people. In the new year your salary over the 12 mths Will benefit from the full 52% deduction

booooonzo

howardmarks wrote: »

My advice would be to wait til the new year. It's only 2 months and it can take that long to find the right bike for some people. In the new year your salary over the 12 mths Will benefit from the full 52% deduction

So if I only worked 6 months this year and had to sign on (but still employed with no pay) for the rest of the year and my bike (ordered from germany) was due dec 23rd will I loose out on the full cycle to work rebate?

cheers

CramCycle

booooonzo wrote: »

So if I only worked 6 months this year and had to sign on (but still employed with no pay) for the rest of the year and my bike (ordered from germany) was due dec 23rd will I loose out on the full cycle to work rebate?

cheers

When will the deduction be made? In December or January?

booooonzo

CramCycle wrote: »

When will the deduction be made? In December or January?

Im not 100%
I have the bike pre-ordered and will have to pay for it 2 weeks before delivery
It's 4k so i don't know how the payment will work exactly.
Just started a new job so I'm not sure if they stagger payment or want me to pay via lump sum.

I've been waiting months for the bike on order and doubt i can delay it.

CramCycle

If its split over 12 months, whatever months are this year will save you money on your highest rate this year and whatever months remain will save on your tax bill next year.

swanvill

Hi,
Does anyone know if the cycle work scheme still available?

Thanks.

CramCycle

swanvill wrote: »

Hi,
Does anyone know if the cycle work scheme still available?

Thanks.

It was not touched in the budget so if your company provides for it then you can still avail of it.

fergalom

Has anyone bought a Canyon bike recently through their employer on the bike 2 work scheme?

As the value is > €1,000 and retailer is outside the state, a zero VAT invoice is required from the retailer (company supplies our VAT number to retailer to allow this) and the Irish VAT of 23% is applied here by my employer.

Using the pre-payment option on Canyon website, you can get an invoice but only with 21% VAT applied.

Have spoken to the UK customer service and they are telling me they will not issue a zero VAT invoice even if we supply our VAT number.

This rules out buying a Canyon bike under the BTW scheme in Ireland.

Has anyone successfully bought a Canyon bike under the BTW scheme - if so how did you do it in line with the rules of the BTW scheme?

maesrichard1

fergalom wrote: »

Has anyone bought a Canyon bike recently through their employer on the bike 2 work scheme?

As the value is > €1,000 and retailer is outside the state, a zero VAT invoice is required from the retailer (company supplies our VAT number to retailer to allow this) and the Irish VAT of 23% is applied here by my employer.

Using the pre-payment option on Canyon website, you can get an invoice but only with 21% VAT applied.

Have spoken to the UK customer service and they are telling me they will not issue a zero VAT invoice even if we supply our VAT number.

This rules out buying a Canyon bike under the BTW scheme in Ireland.

Has anyone successfully bought a Canyon bike under the BTW scheme - if so how did you do it in line with the rules of the BTW scheme?

I rang canyon in the UK and explained the situation and they got it sorted for me.

fergalom

Thanks but I rang them this morning and they told me they will not do this.
Can I ask how they sorted it for you?

Smokeyskelton

I can't give you much guidance on how it works, but I can assure you I bought a Canyon bike through the BTW scheme about two months ago.

There was no problem. I just put an order through the website with the company as the purchaser. The invoice was for the full amount and my employer paid €1,000 by bank transfer and I paid the balance also via bank transfer.

I thought there might be a problem as Canyon would not split the invoice, but there was no issue.

I am now paying it off the €1,000 paid by my employer via my wages.

I can't help you on how it works, as I didn't need to know. All I know is that it did work. I think that there is something on the Canyon FAQ stating that they accept Irish BTW but not the UK scheme (if I remember correctly).

Beasty

I know I'm repeating myself for the umpteenth time her, but no retailer can "accept" the BTW scheme. They are simply selling a bike to your employer and so far as they are concerned that is (or certainly should be) the end of the matter

maesrichard1

Beasty wrote: »

I know I'm repeating myself for the umpteenth time her, but no retailer can "accept" the BTW scheme. They are simply selling a bike to your employer and so far as they are concerned that is (or certainly should be) the end of the matter

I only bought a new canyon last month with the BTW scheme. I got an invoice for the full amount an just did the BTW on the first 1000€ and my employer and ~I sorted out the balance. it can be confusing i admit. Ring canyon uk and explain to them your situation. I dont think you need to split the invoice but i do know that some employers will only buy up to 1000€.

maesrichard1

fergalom wrote: »

Has anyone bought a Canyon bike recently through their employer on the bike 2 work scheme?

As the value is > €1,000 and retailer is outside the state, a zero VAT invoice is required from the retailer (company supplies our VAT number to retailer to allow this) and the Irish VAT of 23% is applied here by my employer.

Using the pre-payment option on Canyon website, you can get an invoice but only with 21% VAT applied.

Have spoken to the UK customer service and they are telling me they will not issue a zero VAT invoice even if we supply our VAT number.

This rules out buying a Canyon bike under the BTW scheme in Ireland.

Has anyone successfully bought a Canyon bike under the BTW scheme - if so how did you do it in line with the rules of the BTW scheme?

Do you mind me asking, are you working in there public sector?

fergalom

ok, spoken to Canyon Germany as Canyon UK were less than helpful
For anyone ordering a bike from Canyon, here's how its done to get a Zero VAT invoice issued.

if you place your order online (billed to your company) and choose prepay/invoice, you will complete a form for company details and you can submit the company VAT number in the free text field and they can then issue the invoice without VAT.

Thanks for the help / advice folks

dave_o_brien

Quick question:

I've recently completed payments for my bike. Are my employers obliged to issue me with a cert clarifying that the agrees salary sacrifice arrangement has been completed?

Cheers,
Dave

fergalom

maesrichard1 wrote: »

Do you mind me asking, are you working in there public sector?

Not at all and answer is no.

Beasty

dave_o_brien wrote: »

Quick question:

I've recently completed payments for my bike. Are my employers obliged to issue me with a cert clarifying that the agrees salary sacrifice arrangement has been completed?

Cheers,
Dave

Nope - presumably full terms were clearly established/agreed at the outset and your gross salary reverts automatically

dave_o_brien

Beasty wrote: »

Nope - presumably full terms were clearly established/agreed at the outset and your gross salary reverts automatically

That's the case alright: salary sacrifice agreement signed and filed in advance. Thanks for clearing that up.

Unknown Soldier

fergalom wrote: »

Has anyone bought a Canyon bike recently through their employer on the bike 2 work scheme?

As the value is > €1,000 and retailer is outside the state, a zero VAT invoice is required from the retailer (company supplies our VAT number to retailer to allow this) and the Irish VAT of 23% is applied here by my employer.

Using the pre-payment option on Canyon website, you can get an invoice but only with 21% VAT applied.

Have spoken to the UK customer service and they are telling me they will not issue a zero VAT invoice even if we supply our VAT number.

This rules out buying a Canyon bike under the BTW scheme in Ireland.

Has anyone successfully bought a Canyon bike under the BTW scheme - if so how did you do it in line with the rules of the BTW scheme?

Got one last week. The invoice had 23% on it.

I take the rest of the pain in one go and pay the excess etc from my next monthly wage.

Then live on beans on toast for a few months.

Beasty

Unknown Soldier wrote: »

Got one last week. The invoice had 23% on it.

That implies they are registered for VAT in Ireland (as are a number of online retailers). If that is the case then they are correctly applying Irish VAT on sales to Irish employers

@fergalom - are you sure thatr 21% was applied in your case?

Kaisr Sose

If a seller passes a certain threshold for intra country sales, they are obliged to register for VAT in that country. Due to the volume of sales and the value/cost of bikes , it would be very unlikely that Canyon are not obliged to register and apply VAT at 23% on sales to Ireland. (Bike24 have to do so)

That said, VAT is a very complex tax and it gets even more complicated for sales/ purchases intra country. Unless people are very knowledgable of VAT, just to be safe, its probably best not to advise on intra country VAT applications. Revenue or the Civil Service have a good guide for purchases from overseas suppliers under this scheme.

If purchasers, employers and sellers conform to these guidelines, a purchase from any retailer outside Ireland is possible and compliant under the BTW scheme. However, an employer can refuse an application from a retailer outside the state.

CramCycle

Kaisr Sose wrote: »

However, an employer can refuse an application from a retailer outside the state.

Technically an employer can refuse any retailer without explanation as the scheme is voluntary for them. They might choose Irish only retailers, they might decide that the LBS beside them is the only one allowed. The only thing they must do is make the same options available for all employees.

Beasty

TBH it's not that difficult to get over the Irish VAT threshold for importers - think it's still €35k pa. About 4 Beasty bikes and you're there ...

Kaisr Sose

CramCycle wrote: »

Technically an employer can refuse any retailer without explanation as the scheme is voluntary for them. They might choose Irish only retailers, they might decide that the LBS beside them is the only one allowed. The only thing they must do is make the same options available for all employees.

Correct. Its totally up to the employer. Information given in relation to bike import under the scheme. These are additionally complex for employers.

niamh.foley

I was looking at a nice bike on PlanetX Ireland but i hear they dont take

Voucher based schemes only goverment or work Cheque could some one verify this

CramCycle

niamh.foley wrote: »

I was looking at a nice bike on PlanetX Ireland but i hear they dont take

Voucher based schemes only goverment or work Cheque could some one verify this

MOVED TO MEGATHREAD

Are you talking about Planet X Ireland or UK?

niamh.foley

CramCycle wrote: »

MOVED TO MEGATHREAD

Are you talking about Planet X Ireland or UK?

Ireland

seen as the Scheme is from the Irish Base unless the UK takes Irish ones ?

CramCycle

niamh.foley wrote: »

Ireland

seen as the Scheme is from the Irish Base unless the UK takes Irish ones ?

The scheme has nothing to do with the shop, it has to do with your employer. If your employer will pay by card or cheque, it means you can use any shop that will accept card or cheque (my co worker got a bike from Wiggle in the UK on the company card, I got mine through an online retailer as my LBS could not get it into stock).

If however your company has decided to hire an external company to run the scheme for them through a voucher scheme, then you are restricted to what ever shops will accept said vouchers. The company that runs the voucher scheme should have a list of shops that accept it. The unfortunate thing with these schemes is that the middle man company take a slice so you won't get great value in alot of cases.

niamh.foley

CramCycle wrote: »

The scheme has nothing to do with the shop, it has to do with your employer. If your employer will pay by card or cheque, it means you can use any shop that will accept card or cheque (my co worker got a bike from Wiggle in the UK on the company card, I got mine through an online retailer as my LBS could not get it into stock).

If however your company has decided to hire an external company to run the scheme for them through a voucher scheme, then you are restricted to what ever shops will accept said vouchers. The company that runs the voucher scheme should have a list of shops that accept it. The unfortunate thing with these schemes is that the middle man company take a slice so you won't get great value in alot of cases.

Ok went onto cyclescheme.ie/partners where it shows Planet X are offering the Cycle the work but yet they are not taken the vouchers sure dont cyclescheme.ie only offer the vouchers ?

CramCycle

niamh.foley wrote: »

Ok went onto cyclescheme.ie/partners where it shows Planet X are offering the Cycle the work but yet they are not taken the vouchers sure dont cyclescheme.ie only offer the vouchers ?

cyclescheme are a private company, so instead of your company doing the right thing and buying the bike directly from the shop, they are paying a middle man to do it for you and taking a slice of the top. I am not even sure if it is covered by the technicalities according to revenue but no one has given out to them yet.

Are your employers using cyclescheme or did you just happen across their site?

niamh.foley

CramCycle wrote: »

cyclescheme are a private company, so instead of your company doing the right thing and buying the bike directly from the shop, they are paying a middle man to do it for you and taking a slice of the top. I am not even sure if it is covered by the technicalities according to revenue but no one has given out to them yet.

Are your employers using cyclescheme or did you just happen across their site?

I used them over 3 years ago before, so i would image the new company i work for would be using a company like them as they did say something to us about getting onto the likes for that company

CramCycle

niamh.foley wrote: »

I used them over 3 years ago before, so i would image the new company i work for would be using a company like them as they did say something to us about getting onto the likes for that company

I would talk to your new company first and ask them how they operate the scheme, it will save you alot of time as they may have a list of approved shops (who are they), they may use a middle man (who is it) or they may administer the scheme themselves (it is quite easy to do).

niamh.foley

just after speaking to the Finance person, we use a company called Euro treck Rally any one hear of them ?

so its Vouchers that we get and Planet X dont do Vouchers joke!!

ted1

niamh.foley wrote: »

just after speaking to the Finance person, we use a company called Euro treck Rally any one hear of them ?

so its Vouchers that we get and Planet X dont do Vouchers joke!!

Thry do Felt bikes which have a pretty good reputation.

CramCycle

niamh.foley wrote: »

just after speaking to the Finance person, we use a company called Euro treck Rally any one hear of them ?

so its Vouchers that we get and Planet X dont do Vouchers joke!!

I think that should be "Euro Trek Raleigh", basically look at Eurocycles/eurobaby .

rubadub

Is there any talk of the €1000 limit being increased. And do you think it would only happen in the budget?

And do you think there would be any comeback at all for someone "stung" buying a bike 1 day too early.

It would be nice if you could double it if you doubled your time frame, i.e. €2000 and not allowed get it again for 10 years.

CramCycle

rubadub wrote: »

Is there any talk of the €1000 limit being increased. And do you think it would only happen in the budget?

None at all AFAIK. I don't see it happening as 1000 is more than enough for a commuter and necessary extras.

And do you think there would be any comeback at all for someone "stung" buying a bike 1 day too early.

None, but you will qualify the scheme again a year earlier if you can get it this year.

dogsears

rubadub wrote: »

Is there any talk of the €1000 limit being increased. And do you think it would only happen in the budget?

It could conceivably happen outside the context of a Budget, but its not going to happen. Its more likely to be abolished entirely, but that's still unlikely.

nutini

Hello, can anyone tell me if it makes a difference to the percentage you get off the bike if it's paid in one paycheck or over a course of months? Or will it all be balanced at the end of the year anyway, for example if you have periods where you make more money and are in the higher bracket of tax should you try to pay off the bike then or will you still get the full reduction once you earn at least 1k at the higher rate over the course of the tax year?

AlmightyCushion

nutini wrote: »

Hello, can anyone tell me if it makes a difference to the percentage you get off the bike if it's paid in one paycheck or over a course of months? Or will it all be balanced at the end of the year anyway, for example if you have periods where you make more money and are in the higher bracket of tax should you try to pay off the bike then or will you still get the full reduction once you earn at least 1k at the higher rate over the course of the tax year?

Income tax is based on your annual income so it won't make a difference.

CramCycle

In terms of the tax, it is all balanced out in the tax year you make the payments. Eg if you pay half this year and the other half next year the same amount will be deducted from both tax years. Basically if you are paying more this year than next, pay it off this year. If your wages won't change then it doesn't matter and so on.

Some one earlier in the thread mentioned a small saving in PRSI if paid at once but it seemed negligible.

Fender76

A mate wants to know...

Any experience?

Lumen

In principle, yes. In practice, it depends how flexible your employer is.

http://www.boards.ie/vbulletin/showthread.php?t=2056382170