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

persie11

Hey folks,

Did the scheme at work a few months ago and 2 things came up,
1, my employer took the full €1000 from my wages, I was told that's how they do it.
2, I got back on the same pay cheque a lot less than the €300 I thought I would be owed, I was told because I had paid less than €300 tax in the past couple of months I wasnt entitled to get the full €300.

I just want to know if that's how it's done?

Thanks.

Seve OB

persie11 wrote: »

Hey folks,

Did the scheme at work a few months ago and 2 things came up,
1, my employer took the full €1000 from my wages, I was told that's how they do it.
2, I got back on the same pay cheque a lot less than the €300 I thought I would be owed, I was told because I had paid less than €300 tax in the past couple of months I wasnt entitled to get the full €300.

I just want to know if that's how it's done?

Thanks.

thats basically it. you pay the full amount out of your wages, but it comes off the gross. so if you earn 3k this month, you would normally pay tax on 3k, but take off the 1k for the bike to work, so this month you will only pay tax on 2k

brianomc

persie11 wrote: »

Hey folks,

Did the scheme at work a few months ago and 2 things came up,
1, my employer took the full €1000 from my wages, I was told that's how they do it.
2, I got back on the same pay cheque a lot less than the €300 I thought I would be owed, I was told because I had paid less than €300 tax in the past couple of months I wasnt entitled to get the full €300.

I just want to know if that's how it's done?

Thanks.

The €1000 can be deducted all at once or over an agreed time frame.

It's not an automatic refund of €300 and you can only get back as much as you have put in so to speak. If you were a low earner and pay no tax, you get no tax back and no benefit from using the scheme (unless you get to pay weekly for a bike you couldn't afford to pay for all at once).

Let's say you earn €600 per week and have worked 20 weeks so far this year then you have earned €12,000. The tax you should have paid so far is calculated on the €12,000. Then on week 21 you get paid €600 but your employer deducts €1,000 to cover the bike. You have earned €12,600 but your tax is calculated based on earnings of €11,600, so you have probably overpaid your tax-to-date once the bike to work is taken into account, and get a refund of the difference that week.

Because tax is calculated based on your earnings for the entire year each week/month, if you buy a bike at the end of the year you will probably get a bigger tax lumpsum back in a single payslip because you have earned more money/paid more tax than you would have had you bought at the start of the year but it all works out the same either way. It wont show up as a refund each week but your tax paid for the rest of the year will be lower each week than had you not used the scheme.

persie11

Sound guys, very helpful.

CramCycle

persie11 wrote: »

Sound guys, very helpful.

Either way you will have paid less tax by the end of the year. Your P21 will sort out any issues if your employer makes a mistake with the tax calculation.

JoeSexton

Does anybody have experience of getting a bike from Chain Reaction on the scheme?
How does it work?
I've emailed various email addresses at Chain Reaction and have got no reply apart from an automated acknowledgment.
I need to get an invoice from them to give to my employer (at least that is my understanding of it).

DirkVoodoo

A colleague of mine is using their bike to work to purchase from an online retailer.

Work have no problem with this and are happy to purchase on the company card. However, they will only pay up to €1000.

The balance of €800 would need to be paid by the colleague.

There is no way around this it seems (transfer money to work card, etc.) so my question is: Has anyone any experience with multiple payments to a German retailer (Rose, Canyon). It would be €1000 by CC and €800 by bank transfer...I presume they can send an invoice number to link the payments.

It shouldn't really be any extra hassle for the supplier as far as I can see, but I thought I'd ask the experts or people who have had to go through the same process.

iwillhtfu

DirkVoodoo wrote: »

A colleague of mine is using their bike to work to purchase from an online retailer.

Work have no problem with this and are happy to purchase on the company card. However, they will only pay up to €1000.

The balance of €800 would need to be paid by the colleague.

There is no way around this it seems (transfer money to work card, etc.) so my question is: Has anyone any experience with multiple payments to a German retailer (Rose, Canyon). It would be €1000 by CC and €800 by bank transfer...I presume they can send an invoice number to link the payments.

It shouldn't really be any extra hassle for the supplier as far as I can see, but I thought I'd ask the experts or people who have had to go through the same process.

I doubt it will be an issue basically your mate will be paying an €800 deposit and the balance when the bike is ready for shipping.

My employer paid the entire sum upfront through bank transfer and I had accounts deduct any balance over €1000 from the next pay packet.

Crocked

I bought off Canyon recently. I made a change to the order and then did a second transfer separately. It wasn't an issue for them to receive 2 payments against the same order.

Cee-Jay-Cee

Does anyone know how to go about buying a bike from Wiggle using BTW scheme?

iwillhtfu

Cee-Jay-Cee wrote: »

Does anyone know how to go about buying a bike from Wiggle using BTW scheme?

You might need to contact them first to see if they do the Irish bike to work.

As far as I know they have to be registered for VAT in Ireland.

I don't think they are.

http://cycletowork.wiggle.co.uk/h/option/ordering_cyclescheme

cython

iwillhtfu wrote: »

You might need to contact them first to see if they do the Irish bike to work.

As far as I know they have to be registered for VAT in Ireland.

I don't think they are.

http://cycletowork.wiggle.co.uk/h/option/ordering_cyclescheme

I'm actually reasonably sure that they are registered (they are required to if selling above a threshold into Ireland), since as far as I recall they are one of the sites where we get a raw deal on helmets (UK being zero VAT, us being 23%). If this is the case, then all that's required is for the poster's employer to buy the bike from Wiggle, and sort out the salary sacrifice and/or payment of anything in excess of the €1000 by the poster. The retailer literally doesn't have to know nor give two ****'s that the bike is being bought through BTW unless it is a voucher scheme, or there is a corporate account involved.

Kaisr Sose

Cee-Jay-Cee wrote: »

Does anyone know how to go about buying a bike from Wiggle using BTW scheme?

Wiggle have an Irish VAT no. Just email their sales team and take it from there. They will invoice in € so it's no different than buying in Ireland.

Seve OB

cython wrote: »

I'm actually reasonably sure that they are registered (they are required to if selling above a threshold into Ireland), since as far as I recall they are one of the sites where we get a raw deal on helmets (UK being zero VAT, us being 23%). If this is the case, then all that's required is for the poster's employer to buy the bike from Wiggle, and sort out the salary sacrifice and/or payment of anything in excess of the €1000 by the poster. The retailer literally doesn't have to know nor give two ****'s that the bike is being bought through BTW unless it is a voucher scheme, or there is a corporate account involved.

did not know this.

would it be possible to just buy on their sterling website and ship using parcel wizard? might save the buyer a few quid

Beasty

iwillhtfu wrote: »

You might need to contact them first to see if they do the Irish bike to work.

No retailer "does" the BTW scheme in that way (other than for their own employees). It's the employer that "does" the scheme

An Irish VAT registration is not required (although as pointed out by Kaisr Sose Wiggle are registered for VAT in Ireland). The VAT position is covered in post #4

Hunterbiker

You can use wiggle as they have an Irish VAT number and issue the invoice with it on it.
Not sure about buying in GBP but you email them tell them you'd like to but a bike on the Irish Bike to Work scheme and they send an invoice with payment instructions.
In my case the total price was in excess of €1k so I paid the extra and the employer paid the €1k. Bike was then assembled and dispatched.
A painless process.

iwillhtfu

Beasty wrote: »

No retailer "does" the BTW scheme in that way (other than for their own employees). It's the employer that "does" the scheme

An Irish VAT registration is not required (although as pointed out by Kaisr Sose). The VAT position is covered in post #4

Apologies when I said check if they do I actually meant check if they're set up and Vat compliant.

I swear to christ this site is turning into a scene from grumpy old men. I'll get back in my box.

JakeArmitage

Just say I want to do the scheme, buy a bike for 1000 euro that my company pays for straight away ,ill be saving 520 in tax and only have to pay back 480 over 12 months. What If I decide a few days later, nah this cycling to work crack isn't for me bring the bike back to the shop and sell it back to them for 800-900?

nhunter100

Thought it was at whatever rate you pay tax at? ie 20% or 40% how did you arrive at 52%?

68 lost souls

Nothing. Very unlikely the shop would buy it back from you though for that money. They can buy a new unused one form the supplier for less

C3PO

JakeArmitage wrote: »

Just say I want to do the scheme, buy a bike for 1000 euro that my company pays for straight away ,ill be saving 520 in tax and only have to pay back 480 over 12 months. What If I decide a few days later, nah this cycling to work crack isn't for me bring the bike back to the shop and sell it back to them for 800-900?

Shop would give you €500-€600 at best!

cython

nhunter100 wrote: »

Thought it was at whatever rate you pay tax at? ie 20% or 40% how did you arrive at 52%?

Basically you save at the "marginal rate", and USC and PRSI are also saved, by virtue of you sacrificing up to €1000 off your gross, so therefore all that you would have paid to the Revenue on that is saved. Previously 52% was a lot of people's marginal rate, though with the change in the last budget most of those people would probably save 51% now, with people earning over 70k now coming in for the saving of 52% due to the extra 1% levied on them.

And agreed with most people here, the OP is incredibly ambitious to think they could recoup 800-900 from either the shop or from a private seller. Bear in mind that if they buy it back it is then second hand, and they can't technically sell it to another BTW customer, and at that price point then with the BTW saving available to so many on new bikes they would do well to sell it for 600-700 cash, IMHO.

Undercover Elephant

nhunter100 wrote: »

Thought it was at whatever rate you pay tax at? ie 20% or 40% how did you arrive at 52%?

Plus PRSI plus USC. 52% is the top marginal rate, so if you pay enough tax you can effectively get 52% off.

Edit: never mind

Beasty

Threads merged

Beasty

JakeArmitage wrote: »

Just say I want to do the scheme, buy a bike for 1000 euro that my company pays for straight away ,ill be saving 520 in tax and only have to pay back 480 over 12 months. What If I decide a few days later, nah this cycling to work crack isn't for me bring the bike back to the shop and sell it back to them for 800-900?

When using the scheme you must "intend" using the bike "mainly" for commuting

If, on purchase, you "intend" to sell the bike then the purchase is outside the scheme and the normal Benefit in Kind rules apply.

Admitedly policing it is not easy, but you would be breaking the law if you benefited from the scheme having never intended to use the bike mainly for commuting.

If you intend to use the bike mainly for commuting when purchased but at a later date change your mind that still falls within the scheme

magicbastarder

just hypothesising, not suggesting here - in my place of work, the scheme is run by getting a quote from the shop, bringing it to the administrator of the scheme in our office, who calls the shop (has to be a bricks and mortar shop) and pays via company credit card.
so hypothetically, if i was friendly with the shop owner, he or she could just pass the €1000 on to me, at a cost to me of half that.

obviously, it would be exposing the shop to the risk of being caught as the transaction - the intial one, certainly - would be electronically recorded and auditable.

traprunner

magicbastarder wrote: »

just hypothesising, not suggesting here - in my place of work, the scheme is run by getting a quote from the shop, bringing it to the administrator of the scheme in our office, who calls the shop (has to be a bricks and mortar shop) and pays via company credit card.
so hypothetically, if i was friendly with the shop owner, he or she could just pass the €1000 on to me, at a cost to me of half that.

obviously, it would be exposing the shop to the risk of being caught as the transaction - the intial one, certainly - would be electronically recorded and auditable.

When I used my bike to work the bike shop said that they have to have everything documented to perfection on their side. Revenue was getting a lot stricter with them.

Beasty

The more "hypothesising" taking place on internet forums/social media sites over ways to abuse the scheme, the more other people (including many who perhaps don't want to benefit from the scheme) can get worked up about those abuses.

The more anecdotes over abuse the more attention the scheme attracts, including from the Revenue and/or politicians, increasing the risk the benefits could be withdrawn for everyone

CramCycle

JakeArmitage wrote: »

Just say I want to do the scheme, buy a bike for 1000 euro that my company pays for straight away ,ill be saving 520 in tax and only have to pay back 480 over 12 months. What If I decide a few days later, nah this cycling to work crack isn't for me bring the bike back to the shop and sell it back to them for 800-900?

If it is premeditated, you are committing fraud.

magicbastarder wrote: »

just hypothesising, not suggesting here - in my place of work, the scheme is run by getting a quote from the shop, bringing it to the administrator of the scheme in our office, who calls the shop (has to be a bricks and mortar shop) and pays via company credit card.
so hypothetically, if i was friendly with the shop owner, he or she could just pass the €1000 on to me, at a cost to me of half that..

While normally the shop is just the seller and in Ireland does not actually have much to do with the scheme in that you should be no different than any customer who walks in looking to buy. This scenario is different, they would knowingly be facilitating fraud. They would have to be great friends or complete idiots, as if word gets around, revenue would crucify them and everyone in Ireland knows, someone always lets it slip.

bazermc

JakeArmitage wrote: »

Just say I want to do the scheme, buy a bike for 1000 euro that my company pays for straight away ,ill be saving 520 in tax and only have to pay back 480 over 12 months. What If I decide a few days later, nah this cycling to work crack isn't for me bring the bike back to the shop and sell it back to them for 800-900?

Sounds like Section 811 would cover that

http://www.revenue.ie/en/business/tax-avoidance/general-anti-avoidance-rule.html