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

Seaswimmer wrote: »

I am familiar with the cycle to work scheme so this is a specific question/issue.
Our company recently introduced the scheme and I applied for my cert up to a value of €1000. Today i got approval but the monthly cost is €93.62 for 12 months.
This comes to a total of €1123.44. When i queried it with Cyclescheme (who are running the scheme on the companys behalf) they said that the company had used the services of a financing company and this was the extra charge. It does not go to Cyclescheme.
I have raised it with the company and am awaiting an answer but i am trying to find out if this is normal or has anyone else on here had this experience.

Thanks in advance..

To be able to operate the scheme within company policy, which prevents loans being given to employees in any form, we have partnered with a Finance Company to facilitate the scheme for our employees. Doing this allows us to use the salary sacrifice deductions to meet the monthly bike payments in arrears.This does have a slight impact on the savings available to employees, however, this was felt to be a good compromise to allow us to go ahead with the scheme which still offers very good savings. As employees do not fund the full certificate costs due to Tax, PRSI and USC savings, the maximum monthly finance charge would be 10.29 euro per month (if an employee opted for a 1,000 Euro certificate).

eddiem74 wrote: »

Hmmm, we could be with the same company. I did spot the extra but nowhere was it called specifically out and I kind of assumed it would be straightened out when it came to the deductions. I managed to track down a HR contact and here was the response:

To be able to operate the scheme within company policy, which prevents loans being given to employees in any form, we have partnered with a Finance Company to facilitate the scheme for our employees. Doing this allows us to use the salary sacrifice deductions to meet the monthly bike payments in arrears.This does have a slight impact on the savings available to employees, however, this was felt to be a good compromise to allow us to go ahead with the scheme which still offers very good savings. As employees do not fund the full certificate costs due to Tax, PRSI and USC savings, the maximum monthly finance charge would be 10.29 euro per month (if an employee opted for a 1,000 Euro certificate).

Salary Sacrifice Agreement
IMPORTANT: You must read this carefully. This agreement details your rights and responsibilities and is legally binding upon you. You are strongly advised to obtain independent advice on any aspect of this agreement you are unsure of.
Terms & Conditions

1.0 Introduction
This agreement is in two parts: the front page setting out various items of key information including the payments you will have to make and these terms and conditions. It sets out the basis on which the Employer (as detailed on the front page) agrees to loan to you for your use, a bicycle and (if applicable) safety equipment under this agreement (the "Equipment") for the purpose mainly of commuting between your home and workplace, or between different workplaces in connection with your employment ("Commuting").
This agreement also varies your terms and conditions of employment. Specifically, it sets out the terms on which you agree to give up part of your entitlement to salary in return for the non-cash benefit of being provided with the Equipment ("Salary Sacrifice") - please see section 4 (Salary Sacrifice and Duration of the Scheme) below for more details.
The Employer has contracted with a company called Cyclescheme Ltd. to administer its cycle to work scheme and provide you with access to a broad range of bike shops (known as "Cyclescheme Partner Shops") from which to obtain the Equipment.
2.0 Eligibility for Tax Benefits
The intention is that by entering into this agreement you will be entitled to take advantage of an exemption from income tax and PRSI contributions in relation to the payments you make under this agreement.

To be eligible for these exemptions, the following conditions will need to be satisfied:-

• There is an enforceable variation to your terms and conditions of employment (exercising a choice of benefit instead of salary), evidenced in writing;
• the equipment covered by the exemption includes pedal bicycles, tricycles and pedelecs and specified safety equipment;;
• the retail price of the Equipment shall not exceed €1,000;
• you must be a Republic of Ireland taxpayer;
• the choice exercised (i.e benefit instead of cash) must be irrevocable for the relevant year for which it is made);
• you may only participate in the Cycle to Work scheme once in a five year period
• you must remain in employment for the duration of the scheme;
• your continued employment for the duration of the Scheme; and
• you must use the Equipment mainly for Commuting, although you are entitled to use it for other purposes as well;

If any of these conditions are not or cease to be satisfied, or the law changes, you may find that you are no longer eligible as a result for the relevant exemptions and the Employer may be required to treat the provision of the Equipment as a taxable benefit.
3.0 Obtaining the Equipment
Once you have selected the Equipment from a Cyclescheme Partner Shop and obtained confirmation that your application to participate in the scheme has been accepted you will enter into this Agreement. You will be provided with a Cyclescheme certificate (a "Certificate") for the value of the Equipment, as set out on the front page of this agreement.
The Certificate cannot be returned or transferred to anyone one else or its value altered once it has been issued to you and you must collect the Equipment within [60 days] from the date the Certificate is issued to you.
If you obtain a quote from a Cyclescheme Partner Shop before applying for a Certificate you may only use the Certificate to obtain the Equipment you received a quote for, as detailed in this Agreement, unless the relevant Cyclescheme Partner Shop agrees to provide you with an alternative bicycle and/or item of bicycle safety equipment. If this happens, please note that:-
• these alternative items will then be treated as the "Equipment" under this agreement; • the value of an alternative bicycle can be topped-up if the value exceeds that of the Certificate; • if the value of the alternative Equipment is lower than the value stated on the Certificate, you will not be entitled to any refund in relation to the difference and will use the surplus for additional safety equipment;
To collect the Equipment, you must present the Certificate in person, along with an acceptable form of photographic identification (Employee ID card, Passport or Driving Licence), at the Cyclescheme Partner Shop where you chose the Equipment.
Before visiting the Cyclescheme Partner Shop to collect the Equipment though, please check that it is available for collection. The Equipment should be made available for collection within a reasonable time, but any specific collection dates given by the Cyclescheme Partner Shop at the time of giving you a quote are not guaranteed.
4.0 Salary Sacrifice and Duration of the Scheme
By entering into this agreement you agree to a Salary Sacrifice from your Employer for a period of 12 months from the date of the commencement of your salary sacrifice. You agree to make the payments detailed on the front of this agreement on a Salary Sacrifice basis.
To be eligible to make the Salary Sacrifice payments detailed on the front page of this Agreement, your salary, after the Salary Sacrifice, must remain above the National Minimum Wage.
If at any point during the Salary Sacrifice Period, your salary falls to a level that would mean if Salary Sacrifice payments were to be made, it would be below the National Minimum Wage, the Employer reserves the right (to the extent it is lawfully entitled to do so) to suspend those payments or deduct them from your net rather than your gross salary and you may lose your entitlement to potential tax benefits as a result.
The Salary Sacrifice may affect the level of any personal pension contributions you make or any sick pay or other pay or benefits that you may be entitled to. Please check with the Employer before signing this agreement if you have any queries in this respect.
At the end of the loan period, the equipment will be transferred to you at no cost and you shall no longer be bound by the terms and conditions of the Scheme.
5.0 Your responsibilities
During the Salary Sacrifice Period:
• you must retain possession of the Equipment and use it mainly for Commuting, although use for other secondary purposes is permitted; • once collected from the Cyclescheme Partner Shop, you will be responsible for any loss of or damage to the Equipment which subsequently occurs, except where this is caused by a defect in the Equipment - see sections 6 (Defective Equipment) and 7 (Lost, stolen or damaged Equipment) below; • you must ensure the Equipment is used safely and maintained properly in accordance with any instructions provided by the manufacturer(s) of the Equipment and/or by the relevant Cyclescheme Partner Shop; • you must use the bicycle in line with all rules and regulations as set out by the road safety authority and make proper use of the bicycle safety equipment at all times.
6.0 Defective Equipment
The Equipment should be covered by warranties given by the relevant manufacturers (or their importers), as well as by any additional warranties that apply under the general law and nothing in this agreement affects the rights that you have under the general law.
If any Equipment is damaged when you collect it from the Cyclescheme Partner Shop, or if any defects or other warranty issues subsequently come to light, please contact the relevant Cyclescheme Partner Shop in the first instance.
7.0 Lost, stolen or damaged Equipment
If at any time during the Salary Sacrifice Period, the Equipment (or part of it) is lost or stolen, or damaged to the point of no longer being usable for Commuting, you will still be responsible for making any remaining payments due under this agreement, but the tax exemptions referred to in section 2 (Eligibility for Tax Benefits) above may cease to apply. Where this happens, you will effectively be required to make the remaining payments out of your net salary.
You are very strongly advised to obtain specific insurance for the Equipment, or otherwise ensure it is covered by your home contents insurance policy. You must inform your insurer that the Employer has an interest in the Equipment.
Please note that if you purchase any replacement equipment following the theft or loss of the Equipment you originally obtained under this agreement, that replacement equipment will not be covered by the terms of this agreement and the tax exemptions referred to in section 2 (Eligibility for Tax Benefits) above will not apply.
7.5 Accident or Injury
In the unlikely event that you suffer accident or injury while using your bicycle, your employer cannot be held responsible. It is the responsibility of the employee to ensure the bike is carefully maintained and in the event of any road traffic accident employees are wholly responsible under the normal ROI legal framework.
8.0 Absence from work
If you are absent from work during the Salary Sacrifice Period the payments detailed on the front page of this agreement will continue to reduce any pay you receive against which Salary Sacrifice reductions are legally permitted to be made provided your salary after Salary Sacrifice remains above the National Minimum Wage ('Eligible Pay').
If you are temporarily not in receipt of Eligible Pay so as to allow for the Salary Sacrifice to continue, but you remain an employee of the Employer, then one of two options may apply - either your payments under this agreement will need to be made via an alternative arrangement and will be agreed with your employer at the time or (at your employer's discretion) your Employer may choose to suspend reductions until you begin to receive sufficient Eligible Pay again or you leave your employment (in which case the provisions of Section 9 (Leaving your employment) below will apply). However in all circumstances:-
• the Salary Sacrifice Period will not be extended for more than 6 months beyond the initial 12 month salary sacrifice period; • if after 18 months from the start of the Salary Sacrifice Period, any payments under this agreement have yet to be made, the full balance (i.e. the total of all payments yet to be made) will become payable to your Employer. Your Employer may seek to deduct this from any future net salary payments due to you or, if the Employer decides otherwise, you may be required to pay the outstanding balance to your Employer within 14 days of request. In any case, you will no longer be entitled to the tax exemptions referred to in section 2 (Eligibility for Tax Benefits).
9.0 Leaving your employment
If you leave your employment, you will no longer be entitled to benefit from the tax exemptions referred to in section 2 (Eligibility for Tax Benefits) above.
Consequently, if your employment with the Employer ceases for any reason during the Salary Sacrifice Period you will be liable for the full amount of the Salary Sacrifice commitment which was agreed at the outset of this Agreement. Salary Sacrifice deductions will still be taken from your salary during any notice period and any amount which remians outstanding at the date of termination will be deducted by the Employer from your final net payment
10.0 Data Protection
By entering into this agreement, you will be authorising the Employer to use, and pass to Cyclescheme Ltd and the relevant Cyclescheme Partner for them to use, personal information about you to the extent necessary to administer the arrangements described in this agreement. The Data Protection Acts 1988 and 2003 will apply to that information.
11.0 General
The Employer will not have any responsibility under this agreement if it is delayed in performing, or fails to perform, any of its obligations under this agreement as a result of any circumstances beyond its reasonable control.
The Employer intends to rely upon the written terms set out in this agreement. No variations will be effective unless expressly agreed in writing by an authorized representative of each of the parties.
This Agreement will be governed by and construed in accordance with Irish law and any dispute arising under this agreement will be subject to the exclusive jurisdiction of the courts of Ireland.

reilig wrote: »

However, in 3 months time, I will have €1000 saved myself. Is there any way that I can give the €1000 to my employer to buy the bike for me and then reclaim the money through tax savings over the 12 months?

milltown wrote: »

I've my bike ordered and the deal is being processed by cyclescheme.ie, as I mentioned earlier in this thread. I just got an e-mail from our HR dept going on about how great the uptake was and all the effort they put in to making the scheme available and yay us etc.
They also say that they want to be clear on how the scheme is run and it turns out that rather than the company buying the bikes (as I understood to be the case in most companies that could afford it) they are getting the money through a finance company and charging €10.29 per month on the gross salary deduction on a €1000 btw deal!

"The maximum gross monthly finance charge before any Income Tax, PRSI and USC savings are taken into account is €10.29, and this is based on an employee opting for the full €1,000 maximum certificate."

Has anyone had anything similar?

I'd understand if it was a small company, like in some of the other posts, but this is a company that makes >$2bn per quarter!

dcdeerhunter wrote: »

can i buy a bike from any bike shop or have i to buy it from the shop proposed by my employer

Roger Hassenforder wrote: »

http://www.boards.ie/vbulletin/showthread.php?t=2056306050

should cover most of it?
hands up who got their bikes in the BTW scheme?

me...