I like to cycle to work as often as I can, for a variety of reasons. It’s good for my general fitness, it saves the hassle of finding a place to park (not really a great hassle, we have our own car park, but it’s a bit over-subscribed, and the entrance often gets blocked by the delivery truck for our local Kwik-E-Mart). It also saves a bit of cash in fuel, although not a vast amount, I only live about a mile from the office. It’s also the quickest way to get from the office to the fire station (I’m a retained firefighter).
18 months ago I heard from a friend about the government’s Cycle To Work scheme, which sounded like it gave you a chance to buy a bike without paying income tax on the spending, saving about 20% of the cost, with the cost coming out of my salary every month over 18 months. My old bike was getting a bit tired, so it sounded worth a punt. I filled out the forms on the Cycle Scheme web site, then visited my friendly local bike store, James’ Cycles, picked a nice bike and various other bits of gear, and rode home a happy boy.
Skip forward a few weeks to when SteamDesk received an invoice for the full amount from CycleScheme. Hmm, methinks, I thought we were paying in installments? It looks like I haven’t really saved myself anything here after all (I own the company). Oh well, at least I can claim the VAT back, and fortunately I hadn’t picked something expensive, so it wasn’t a nasty surprise in the cashflow.
Skip forward 18 months, and I get a letter from CycleScheme saying that now the 18 months are up I have three options. I can buy the bike that they have been lending me for £58, rent it for another 3 years for a “deposit” of £10.98 (at which point they might sell it to me for market value), or return it to them at my cost. What a scam! If I want to keep it now, I’ll have essentially saved nothing. If I pay the deposit then they still might not offer it to me for sale at a fair price (there’s no promise to do so, which is apparently some kind of way to avoid a “payment in kind” tax liability). If I return it, I’ve simply had a pretty expensive rental for 18 months.
So all in all – it’s a crummy scheme, especially for company owners! I bet I could have got a better deal if I’d walked into the bike shop offering the same cash amount that I had to pay to CycleScheme just a few weeks later, saved myself all the time and paperwork hassles. The moral here is – always read the small print.
Addendum: I probably still won’t ever read the small print, I don’t believe in it!