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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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McGilla

Hi all,

So I'm looking at getting a bike on the B2W scheme!
I've been tempted by direct sales companies such as YT and Canyon as tehy offer serious spec for amazing value.

I've heard mixed opinions on weather yo can or cannot use the B2W for these companies.

I'm looking for experience in this: has any done this, or tried and failed to do this?
(If so how did you do it)

*Not looking for more speculation - thanks!*

Thanks in advance!

Beasty

Threads merged

Beasty

McGilla wrote: »

I've been tempted by direct sales companies such as YT and Canyon as tehy offer serious spec for amazing value.

I've heard mixed opinions on weather yo can or cannot use the B2W for these companies.

Your employer can use any supplier they choose, be it an online retailer or bricks and mortar shop

This thread sets out the rules and covers this issue many times

iwillhtfu

Ask your employer. They'll tell you how they operate the scheme. If it's a large multinational they'll be using a middle man scheme so you'll be tied to a certain list of stores.

In order to buy of Canyon your company needs to allow a bank transfer or use of a company credit card.

At the end of the day it will come down to how your company operates the scheme. Loads of info on buying off canyon back a few pages.

McGilla

iwillhtfu wrote: »

Ask your employer. They'll tell you how they operate the scheme. If it's a large multinational they'll be using a middle man scheme so you'll be tied to a certain list of stores.

In order to buy of Canyon your company needs to allow a bank transfer or use of a company credit card.

At the end of the day it will come down to how your company operates the scheme. Loads of info on buying off canyon back a few pages.

We're a small business, and we haven't run a B2W scheme before.
I'll be the first to avail of it.

Kaisr Sose

McGilla wrote: »

We're a small business, and we haven't run a B2W scheme before.
I'll be the first to avail of it.

Buying from an overseas supplier is permitted but there are certain VAT issues that arrise if the seller is not Irish VAT registered. (Getting a VAT free invoice and then self accounting for Irish VAT.). It all rests with your employer as to whether they will facilitate. AFAIK Canyon will not supply a bike without charging VAT.

Viper_JB

Hey folks, not sure if this is the thread for it but looking at doing the BTW scheme to pick up a road bike (big into the mountain biking at the moment but looking for something to help keep fit when I can't make the trails) so I want to use the full 1k or there abouts but mainly looking for the best bang for my buck. Something that I could do some sportive events in and stuff, best components within my budget, been looking at some giant bikes but heard that they're not the best within this budget?

nilhg

Viper_JB wrote: »

Hey folks, not sure if this is the thread for it but looking at doing the BTW scheme to pick up a road bike (big into the mountain biking at the moment but looking for something to help keep fit when I can't make the trails) so I want to use the full 1k or there abouts but mainly looking for the best bang for my buck. Something that I could do some sportive events in and stuff, best components within my budget, been looking at some giant bikes but heard that they're not the best within this budget?

http://www.boards.ie/vbulletin/showthread.php?p=94922740

tippgod

Hi All
i am finding it very difficult to get this question answer by the bike to work scheme.
My weekly pay is bassed on €29k a year. i do a good bit of overtime at different times during the year and my last p60 was €36k.
on the cycle to work scheme, do i get a 31% or 51% reduction on the cost of a bike. Work has told us we have to pay it back over 6 weeks but neither them or the bike to work agency can tell me what rate i will be paying
thanks

Mr. Incognito

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax_credits_and_reliefs/cycle_to_work_scheme.html

Daithi101

tippgod wrote: »

Hi All
i am finding it very difficult to get this question answer by the bike to work scheme.
My weekly pay is bassed on €29k a year. i do a good bit of overtime at different times during the year and my last p60 was €36k.
on the cycle to work scheme, do i get a 31% or 51% reduction on the cost of a bike. Work has told us we have to pay it back over 6 weeks but neither them or the bike to work agency can tell me what rate i will be paying
thanks

try: bikes4work.ie, that will give you a break down what you will pay and save.

tippgod

Daithi101 wrote: »

try: bikes4work.ie, that will give you a break down what you will pay and save.

Thanks. I have alreaedy done that and i told them my wages and all i got back from them was "The cost of the bike or ticket comes from your gross pre-tax salary, so you save whatever PAYE, PRSI and USC you are paying. The rates vary depending on the individual's circumstances - you can save up to 31% or 51%. "

it was my "individual circumstance i was asking them about

Chips Lovell

I'd read it as it being taken out of whatever your gross pay was in the six week repayment period. How much you save is really dependent on how much you earn during that period.

brianomc

If you end up earning enough during the year that you are on the higher rate of tax at the end of year then you will save at the 51% rate.
If you don't, you will save at the 31% rate.

It might look initially like you only save at the lower if all your overtime comes towards the end of the year, but because your wages each week/month are calculated by looking at your earnings/tax paid for the whole year to date and not just each week you will get the benefit later in the year too.

This doesn't apply to people on emergency tax or week 1 basis where you tax is calculated based only on what you earn that week.

Beasty

Currently on mobile and cannot merge this onto the relevant mega thread. You will save whatever your top rate of tax in during this tax year. If you only pay 31% that's how much you save. If you end up paying the top rate you will save that.

jon1981

Beasty wrote: »

You will save whatever your top rate of tax in during this tax year. If you only pay 31% that's how much you save. If you end up paying the top rate you will save that.

This!

more info here:

https://www.cyclescheme.ie/employers/employer-faqs#/employers/employer-faqs/How are the savings made?

The benefit is exempt from income tax and the benefit-in-kind arising from the provision of a bicycle/bicycle safety equipment by an employer to an employee or director, where the bicycle/associated safety equipment is used by the employee or director mainly for qualifying journeys. Under the scheme you don’t pay income tax, PRSI or Universal Social Charge on the price of the bicycle and/or safety equipment so you can save between 31% and 51% on the retail price (depending on your marginal tax rate).

jimmycrackcorm

The way it works is that the cost of the scheme is spread by your employer over say the year and the monthly equivalent is deducted from your gross income before tax is calculated. Then it is added back in again to your net pay.

Hence how much you save is determined by how much your pretax income is offset by the amount being deducted.

CramCycle

Beasty wrote: »

Currently on mobile and cannot merge this onto the relevant mega thread.

MOD VOICE: Merged

bbolger

I'm leaving my current employer in April and starting a new job in May.

Purchased a bike on the scheme in Dec 2014 with payments being deducted monthly.

My understanding is that I can pay the final balance in April to avail of the full tax benefit.

Has anyone had a similar experience?

Thanks.

CramCycle

bbolger wrote: »

I'm leaving my current employer in April and starting a new job in May.

Purchased a bike on the scheme in Dec 2014 with payments being deducted monthly.

My understanding is that I can pay the final balance in April to avail of the full tax benefit.

Has anyone had a similar experience?

Thanks.

There should be lower tax as you will have a far lower pay packet than normal in April.

You will notice the full reward at the end of the year if your monthly wages are not high enough to give you the full benefit, when you request a P21.

If your really well paid though you will notice it all in April.

brianomc

jimmycrackcorm wrote: »

The way it works is that the cost of the scheme is spread by your employer over say the year and the monthly equivalent is deducted from your gross income before tax is calculated. Then it is added back in again to your net pay.

Hence how much you save is determined by how much your pretax income is offset by the amount being deducted.

Not really added back in.
Lets say your employer paid 1000 for the bike, they pay you 3000 per month and you have agreed to pay 100 back each month for 10 months.
They now pay you 2900 per month and keep 100 themselves. Your new tax is calculated on the 2900, not the 3000.
If they added the 100euro back onto your net pay then they will be down the cost of a bike by the end of the year.

cython

Beasty wrote: »

Currently on mobile and cannot merge this onto the relevant mega thread. You will save whatever your top rate of tax in during this tax year. If you only pay 31% that's how much you save. If you end up paying the top rate you will save that.

With the caveat that (AFAIK) you would need to be into the higher rate by the full amount you avail of (up to €1k) to get the full 51% relief. If you are €500 in, and avail of the full €1k, then I think you will get relief on €500 at 51%, and €500 at 31%, resulting in a blended rate around 41%. This is something of an edge case, but can arise because of the value being deducted from the gross, and is hence a factor in the wording of between 31% and 51% that is often stated, i.e. it is not exactly boolean in this scenario.

Beasty

cython wrote: »

With the caveat that (AFAIK) you would need to be into the higher rate by the full amount you avail of (up to €1k) to get the full 51% relief. If you are €500 in, and avail of the full €1k, then I think you will get relief on €500 at 51%, and €500 at 31%, resulting in a blended rate around 41%. This is something of an edge case, but can arise because of the value being deducted from the gross, and is hence a factor in the wording of between 31% and 51% that is often stated, i.e. it is not exactly boolean in this scenario.

I agree entirely, but there will be relatively few people availing of the scheme who will be hovering around the limit of the basic rate band. I was trying not to complicate it by going into that level of detail, as to do so could then result in me going onto the further complication that the salary sacrifice arrangements straddling of tax years (which will happen in most cases) may cause .....

ar_Vis

Correct me if I am wrong, but if u are getting
9.5e an hour, that works out
370.5e a week so that leaves u with
336e after tax prsi etc
and if u buy a bike agree to deduct
20e of ur wages every week, that would leave u with
350.5e before tax etc and
336e after
So it would work out as free bike or I do not get this scheme at all
Thanks
To add its single person payed by week

darconio

Is there any way to find out when was the last time I've applied for the scheme? E.G if it was 2010 will I be eligible at the end of 2015?

CramCycle

darconio wrote: »

Is there any way to find out when was the last time I've applied for the scheme? E.G if it was 2010 will I be eligible at the end of 2015?

Your employers should have records

Kaisr Sose

CramCycle wrote: »

Your employers should have records

But if you have changed employer, only you would know the date you availed..there is no central register for this scheme.

cython

darconio wrote: »

Is there any way to find out when was the last time I've applied for the scheme? E.G if it was 2010 will I be eligible at the end of 2015?

Just to add to the posts already made, If you availed at any point in 2010, you are already eligible for 2015. The scheme is only concerned with tax years, not calendar months, so one could apply in December 2010, and have done so again in January 2015

CramCycle

Kaisr Sose wrote: »

But if you have changed employer, only you would know the date you availed..there is no central register for this scheme.

And, in my opinion, a different employer is a different employment, so it would be available again to you, regardless of years. Quite possibly not in the spirit of the scheme but that is my reading of the wording.

Kaisr Sose

CramCycle wrote: »

And, in my opinion, a different employer is a different employment, so it would be available again to you, regardless of years. Quite possibly not in the spirit of the scheme but that is my reading of the wording.

I felt somebody might post that.

According to Revenue an employee can only avail of the scheme once every 5yrs. (It does not mention separate employments in a 5yr period but one would assume the 5yr rule covers multiple employments.

To do otherwise possibly involves a tax offence