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

Beasty

Firstly this thread is not about which bike should you get under the BTW scheme – there are too many variables to try and cover this in a single thread. It is to provide a summary of the scheme, some do’s and don’ts and act as a single thread for all technical aspects of the scheme.

Any new threads created covering the rules and application of the scheme will either be locked or transferred to this thread. Please ensure you review the whole thread before posting a new query

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heartofwhite

Howdy everyone - just say a bike is 1000 euro, can you pay part of that cost upfront in cash to the LBS and then do the remainder via the scheme????

magicbastarder

you only qualify on what contribution your employer makes to the scheme.
but the CTW scheme allows for up to €1000 offset against your salary - so in the above case, buy the €1000 bike on the CTW scheme and pay for the rest of the gear as normal.

bazermc

heartofwhite wrote: »

Howdy everyone - just say a bike is 1000 euro, can you pay part of that cost upfront in cash to the LBS and then do the remainder via the scheme????

You could but you won't maximise the tax relief. At the end of the day it is your money cash. However putting the transaction through the cycle to work scheme ensures you obtain the tax relief.

Beasty

Posts moved to correct thread - please read the Charter and FAQs before posting

Thanks

Beasty

Beasty

heartofwhite wrote: »

Howdy everyone - just say a bike is 1000 euro, can you pay part of that cost upfront in cash to the LBS and then do the remainder via the scheme????

Who is contracting with the LBS to purchase the bike? If you, then no you cannot use the scheme. Your employer must buy the bike (and then would usually sell it to you under salary sacrifice arrangements, although they can actually give you the bike if they are so inclined and the scheme rules permit)

fatherted1969

Complete newbie here so asking for advice. Living in Kildare town area and am looking for a bike. Began running about 6 months ago and would like to alternate cycling on the odd days as i don't think my knees would hold up to the hard roads.

Budget is under 1k just something that will get me 20 or 30km. Doubt I'll ever enter into any races. Has anyone any advice as to best place in Kildare town vicinity. Value and after sales service would be great

Cheers

CramCycle

Post above moved to megathread, anyone with good advice on the B2W scheme shops in Kildare?

[Deleted User]

fatherted1969 wrote: »

Complete newbie here so asking for advice. Living in Kildare town area and am looking for a bike. Began running about 6 months ago and would like to alternate cycling on the odd days as i don't think my knees would hold up to the hard roads.

Budget is under 1k just something that will get me 20 or 30km. Doubt I'll ever enter into any races. Has anyone any advice as to best place in Kildare town vicinity. Value and after sales service would be great

Cheers

Bought a bike from Cahills Cycles in Naas recently. Family run operation been around for years. I would recommend them.

Snowstark

Hey everyone! I'm planning on getting a bike on the weekend through the cycle to work scheme and just received the forms from my employer. Just wondering if anyone can tell me whether or not you can leave the shop with the bike on the day or would you have to wait until the company processes payment? The forms just say to invoice the company and, knowing my job, it could be weeks before they finally get round to paying for it!

Anyone have any experience with this?

Orion

It'll depend on the shop and whether they have a prior relationship with your company. They're under no obligation to give you the bike until it's paid for.

Snowstark

Thanks, Orion. Partly guessed this would be the case. Good to get the ball rolling anyway I suppose!

mjp

Thinking of availing of this scheme but was going to wait till early next year when weather picks up again. What are chances of scheme being cut in budget as colleague telling me it's best to get it ordered beforehand

Beasty

I am not in the Ministry of Finance and cannot predict the future so anything I say on this particular issue must be looked at in light of those facts.

There is no reason to cut the scheme. Every Budget we get someone thinking it may be cut. One year they may well be right.

One thing I did hear on the radio this morning - 4.5% or so of journeys (within Dublin I think) are now made by bike. In 2005 or so the figure was 2.2%. They are aiming for 10% by 2020. They are not going to get there unless they actively encourage people to use their bikes. Removing the scheme (which costs very little) has the opposite effect

Having said that why take any risk? If you can avail of the scheme now, why not do so? Yes we're heading into autumn, but that does not stop anyone cycling...

dogsears

I would have thought there was more chance of it being cut last year when it was 5 years old and people who used the scheme in year 1 would have become entitled to use it a second time.

That didn't happen so I feel it will be left alone this year. Its popular, cheap, contributes to better health and relieves congestion etc so its hard to see a political upside to chopping it this year.

Having said that there is no crystal ball and no guarantees of anything so as Beasty says if you've seen a bike you like - why not go for it!

CramCycle

Also if you get it now, it will be a year earlier that you qualify for it again.

AlmightyCushion

I can't see it being cut. If everyone who gets it buys a €1000 bike and is on the higher rate then it costs €520 per person. If 1000 avail of it then it is only costing 500k a year. If 10000 avail of it then that's 5 million. The real cost would actually be lower once you take into account the vat frompeople who wouldn't normally have bought a bike.

CramCycle

AlmightyCushion wrote: »

I can't see it being cut. If everyone who gets it buys a €1000 bike and is on the higher rate then it costs €520 per person. If 1000 avail of it then it is only costing 500k a year. If 10000 avail of it then that's 5 million. The real cost would actually be lower once you take into account the vat frompeople who wouldn't normally have bought a bike.

The government still get the VAT from the bike, so that 520 per person goes down to 310 per person (provided they buy it here and I imagine its only a small number who buy abroad, many of whom will but from sites that are registered for Irish VAT).

Not only that but the number of bike shops that have seen a resurgence (initial sales, repeat business etc.), hiring more people, the middle men setting up companies, etc. That 310 per person is reduced again (no idea how much by). Followed on by the reduction in traffic due to less people in cars, overall improvement in public health over time (not that any irish government gives a sh1t about the long term). If the average commuters health improves only slightly the cost to the HSE in the future is reduced greatly, far more I imagine than a measly 310euro over time.

ROK ON

In fact the Revenue may do better than suggested in above post.

Take for example a person with a budget of 1000 - using BTW that person can buy a bike ip to 1520 if on the higher tax band.
The Govt collects VAT on the higher amount not the 1000 in the absence of the btw.
In addition the vat from additional purchases of consumables need for cycling and the tax taken from bike retailers who are no busier and more plentiful.

It may actually be a net contributor to state coffers.

I am collecting my 2nd btw bike today. In both cases I have spent significantly more than the net €480. I know many folks in this situation.

dogsears

ROK ON wrote: »

In fact the Revenue may do better than suggested in above post.

Take for example a person with a budget of 1000 - using BTW that person can buy a bike ip to 1520 if on the higher tax band.
The Govt collects VAT on the higher amount not the 1000 in the absence of the btw.
In addition the vat from additional purchases of consumables need for cycling and the tax taken from bike retailers who are no busier and more plentiful.

It may actually be a net contributor to state coffers.

I am collecting my 2nd btw bike today. In both cases I have spent significantly more than the net €480. I know many folks in this situation.

How do you get to €1520? Its not a figure that appears anywhere in the legislation or guidance - where the only relevant figure is that the employer cost cannot exceed €1000.

Beasty

I presume POK ON is starting from his statement of a "budget of 1,000" - ie net cost to employee. Then the tax benefit of the BTW scheme on the €1,000 qualifying for exemption is added to get to €1,520

Turning it around - buying a bike with retail cost of €1,520 on the BTW scheme has a net cost to the employee of €1,000

dogsears

OK so the same point could be made with a different figure - e.g bike with retail cost €3,520 on the BTW scheme has a net cost to employee of €3,000.

I'd read some other significance into the fact that the net budget of €1,000 was the same as the limit on the employer cost being €1,000.

CramCycle

dogsears wrote: »

I'd read some other significance into the fact that the net budget of €1,000 was the same as the limit on the employer cost being €1,000.

I am not sure what you are saying here. There is no limit to the cost of the bike except for what the employer is willing to pay (often 1000euro to save any minor hassle). Anything after the initial 1000euro in cost, can be taken as BIK with a reduction in wages over any time period the employer sees fit.

Not sure if there are other ways such as the employer charging you the remainder out of your net, like the way some companies charge your staff card for food in the canteen etc. Cannot think why this would be an issue, probably alot more simpler for them.

dogsears

I agree with you 100%.

I just wondered whether ROK ON was indicating a particular significance in relation to an amount of €1520 gross of tax relief, €1000 net.

BoardsMember

Quick question on this.

Company has agreed to buy a bike for me on this scheme. I believe they can do this up to 1k without BIK. So, to be clear, it is not that I will buy the bike over 12 months, they are willing to buy the bike outright up to the value permitted, 1k.

The invoice for the bike is 1800 euro. It has no VAT on it, it was bought from a company in Germany and the company supplied the VAT number.

So, the question is...how does this work re salary & VAT. Here's what I think, but I am not sure:

- Company "sells" bike to me for 1k, this includes 23% VAT
- That's €813 of the bike cost, plus VAT @ 23% (€187)
- Company owes revenue €187 in next VAT return
- Company takes €987 off my next NET salary amount (ouch!!), i.e. the different between 813 & cost price of bike

Is the above correct?

I presume the company selling the bike to me, the VAT of 187 etc is all fine to record via a memo, rather than me being added as a customer in the accounts system etc

Any informed advice welcome

AlmightyCushion

BoardsMember wrote: »

Quick question on this.

Company has agreed to buy a bike for me on this scheme. I believe they can do this up to 1k without BIK. So, to be clear, it is not that I will buy the bike over 12 months, they are willing to buy the bike outright up to the value permitted, 1k.

The invoice for the bike is 1800 euro. It has no VAT on it, it was bought from a company in Germany and the company supplied the VAT number.

So, the question is...how does this work re salary & VAT. Here's what I think, but I am not sure:

- Company "sells" bike to me for 1k, this includes 23% VAT
- That's €813 of the bike cost, plus VAT @ 23% (€187)
- Company owes revenue €187 in next VAT return
- Company takes €987 off my next NET salary amount (ouch!!), i.e. the different between 813 & cost price of bike

Is the above correct?

I presume the company selling the bike to me, the VAT of 187 etc is all fine to record via a memo, rather than me being added as a customer in the accounts system etc

Any informed advice welcome

I think the company would have to pay 23% on the entire 1800, making the price 2214. You would then have to pay 1214/to the company seeing as they are covering the first 1000.

BoardsMember

AlmightyCushion wrote: »

I think the company would have to pay 23% on the entire 1800, making the price 2214. You would then have to pay 1214/to the company seeing as they are covering the first 1000.

I don't understand your suggestion...who would the company have to pay 2214 to? The company has already bought the bike for 1800, and now owns the bike. But you might be right, I just don't know.

Beasty

Or if theya er really generous and buy you the bike outright they would declare the taxable benefit at €1,214....:)

AlmightyCushion

BoardsMember wrote: »

I don't understand your suggestion...who would the company have to pay 2214 to? The company has already bought the bike for 1800, and now owns the bike. But you might be right, I just don't know.

Because the company bought the bike vat free and are now selling it on to you.

CramCycle

BoardsMember wrote: »

I don't understand your suggestion...who would the company have to pay 2214 to? The company has already bought the bike for 1800, and now owns the bike. But you might be right, I just don't know.

The government will expect the VAT on that purchase (all of it) at some point, your company would add this onto the sale price to you. Therefore the bike costs you 1800 + VAT, your company would then send the VAT to Revenue at a later date. Your 1000euro BTW is not VAT free.

AlmightyCushion

AlmightyCushion wrote: »

Because the company bought the bike vat free and are now selling it on to you.

Edit: the 2214 is 1800 for the German company seeking the bike and 414 euro in vat owed to revenue.

Edit: meant to edit my previous post not reply to it.