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

CramCycle

gears wrote: »

Result I pay less tax as a result of buying the bike.

Or perhaps my knowledge of tax is all wrong.

Precisely, your employer also makes a small saving from PRSI contributions etc. Those claiming that it is a huge admin cost either have incompetent admin staff or are paying their staff to much.

The invoice is the proof to the employer that the cheque is being used to buy a bike and is therefore compliant with the scheme. That is about the only difficult thing for them to do.

dogsears

CramCycle wrote: »

Those claiming that it is a huge admin cost either have incompetent admin staff or are paying their staff to much.

Whatever the reason, overcoming pre-existing resistance to a BTW scheme can be difficult.

Sometimes companies have committees that interact with management on matters such as benefits, environment etc. Perhaps OP could apply pressure through something like that, if his new company has these. If so, the PRSI benefit should certainly be pointed out, as well as the fluffier things like a more contented workforce etc.

gears

dogsears wrote: »

Whatever the reason, overcoming pre-existing resistance to a BTW scheme can be difficult.

Sometimes companies have committees that interact with management on matters such as benefits, environment etc. Perhaps OP could apply pressure through something like that, if his new company has these. If so, the PRSI benefit should certainly be pointed out, as well as the fluffier things like a more contented workforce etc.

I hadn't thought of the PRSI. To be honest I've been self employed for years and only just getting back to work for someone else so just getting used to the penal new tax rates. From what I can see Employer PRSI is 10.75% of earnings above €500/wk if this is correct the employeer would save €107.50 of every €1000 spent by an employee on a bike???? Again my tax calculations may be wrong.

Mr.Fred

gears wrote: »

Employer PRSI is 10.75% of earnings above €500/wk if this is correct the employeer would save €107.50 of every €1000 spent by an employee on a bike????

As good as that sounds if the employer doesn't want the hassle you may aswell be banging your head against the wall.

The best thing to do is put it all together in a package and present it to him and if you've an accounts dept run it by them first and let him know that accounts said it wouldn't be an issue.

gears

Mr.Fred wrote: »

As good as that sounds if the employer doesn't want the hassle you may aswell be banging your head against the wall.

The best thing to do is put it all together in a package and present it to him and if you've an accounts dept run it by them first and let him know that accounts said it wouldn't be an issue.

You'd think that saving over €100/ employee would be enough of an incentive to operate the scheme. But I'll put it all together and see what happens. Thanks for the help.

Mr.Fred

gears wrote: »

You'd think that saving over €100/ employee would be enough of an incentive to operate the scheme. But I'll put it all together and see what happens. Thanks for the help.

you would think it alright but your employer is probably thinking about the hours you've spent planning this,sneaking online during work hours to drool over the latest piece of carbon, how long did accounts spend changing payroll.. etc etc.. before you know it that €100 saving has cost him €50

That's why I'd recommend laying it all out step by step and with as little fuss as possible. If they've said no once they may not even entertain you but no harm in trying I guess. My employer wouldn't have a bar of it but I plan on broaching the subject again once funds allow

kev-bt

How ye lads, I was reading through the forum there and I didn't come across the answer I was looking for.

I understand the system i.e. pick a bike and get the employer to pay it and I pay it back through my Gross Wages. Our secetary here isn't sure how to go about setting it up for paying back.

How does the company apply for the scheme i.e. how do they get to pay back €1000 tax free?

Does she have to contact revenue?

What I don't understand is that is just seems to be an agreement between employee and employer of how to pay it back, if that is so then what is stopping them offering a benefit worth €2000 rather than €1000 (I'm not suggesting this just trying to understand how to get it set up on payroll).

Does the bike shop have to state in the invoice that the bike is part of the cycle to work scheme?

Thanks in advance!

Beasty

There are no special arrangements with the Revenue or bike shop. Basically the employer pays for the bike then deducts the cost from gross salary (either in 1 go or spread over 12 months). If your marginal tax/levy rate is 52% and the bike costs 1,000 the employer deducts 1,000 from your gross salary but you only see a net (after tax) reduction of 480 in your take-home pay

Bottom line is you have paid 480 for a bike worth 1,000 and your employer has also saved a bit of PRSI

kev-bt

Beasty wrote: »

There are no special arrangements with the Revenue or bike shop. Basically the employer pays for the bike then deducts the cost from gross salary (either in 1 go or spread over 12 months). If your marginal tax/levy rate is 52% and the bike costs 1,000 the employer deducts 1,000 from your gross salary but you only see a net (after tax) reduction of 480 in your take-home pay

Bottom line is you have paid 480 for a bike worth 1,000 and your employer has also saved a bit of PRSI

Thanks for your reply. Just from an employers point of view is it just a standard thing they set up on their payroll to deduct the costs? They want to know every little detail before they agree to the scheme!

Beasty

kev-bt wrote: »

Thanks for your reply. Just from an employers point of view is it just a standard thing they set up on their payroll to deduct the costs? They want to know every little detail before they agree to the scheme!

Should be easy enough to make an djustment to gross pay, but they need to be careful it doesn's affetc anything else that is calculated by reference to gross pay (such as pension contributions). It's down to whathever system they use

There is also a bit of admin as the employee needs to sign the salary sacrifice document and confirm they will use the bike mainly for commuting. They do get the PRSI saving (and a happier employee!) in return though

dogsears

kev-bt wrote: »

what is stopping them offering a benefit worth €2000 rather than €1000 (I'm not suggesting this just trying to understand how to get it set up on payroll).

They could do that but the additional €1,000 would be taxable.

hoogeebear

Hi,

Is it possible to find out off Revenue (or another source) when I am due to apply for bike to work scheme? I used BTW sometime in 2009 (bike stolen after 3 weeks!).

Be great if I could find out exactly when I can apply again....

Thanks!

Jack.

dogsears

hoogeebear wrote: »

Hi,

Is it possible to find out off Revenue (or another source) when I am due to apply for bike to work scheme? I used BTW sometime in 2009 (bike stolen after 3 weeks!).

Be great if I could find out exactly when I can apply again....

Thanks!

Jack.

If you're sure about first using the scheme in 2009, then you can use again anytime from 1 Jan 2014. You can only use the scheme once in a 5 year period but as the scheme operates in full calendar years the 5 year period basically means the year of first use plus the next 4, so 2009 plus 2010-2013. Your 5 year period ends 31-12-2013.

billyhead

hoogeebear wrote: »

Hi,

Is it possible to find out off Revenue (or another source) when I am due to apply for bike to work scheme? I used BTW sometime in 2009 (bike stolen after 3 weeks!).

Be great if I could find out exactly when I can apply again....

Thanks!

Jack.

You could find out of your HR/personnel section when exactly you availed of it initially. I am not sure about the 5 year period stsrating again on the 1st of Jan. No one really knows for certain because no one has availed of it a second time around.

dogsears

billyhead wrote: »

I am not sure about the 5 year period stsrating again on the 1st of Jan. No one really knows for certain because no one has availed of it a second time around.

With respect, I am sure. Its not necessary to wait until someone's used the scheme a second time. The rules have already been written down. Unless they're amended (no chance) or repealed (not likely but not out of the question) it'll be Jan 1.

Having said that, as most people are aware of a 5 year issue, but few people are aware of the specific words of the legislation, I think there could well be confusion in HR depts, tax offices etc in respect of the first flood of eligible people. It would be useful if Revenue clarified this on their FAQ on the topic. I'm going to write to them and will report back (if I get a response).

Cee-Jay-Cee

Any teachers or people working for dept of education able to clarify something for me in relation to BTW scheme: the dept circular states that all payments from salary must be completed by the last pay date in November of that calendar year so does that mean that the maximum period in which to pay is 11 months or can one apply on the 1st December and therefore have the full 12 months in which to spread the payment over?

RasTa

Could anyone who has purchased in this manner before tell me what to do.

MOD VOICE: Nope, as per site rules, tax fraud is a crime and discussion there of is not allowed

RainyDay

Could you be more specific about your question - do you mean 'Could anyone who has purchased in manner designed to defraud the Revenue Commissioners before tell me what to do?'

MOD VOICE: They could but I would not be impressed, I have a sore shoulder and lifting a hammer could be irritating :pac:

Lemlin

Just one question I've had asked by a friend recently. If one half of a couple is on the higher tax bracket, and the other on the lower tax bracket, if they both go for the bike to work will both benefit from the higher tax rate savings if their combined income is more than 64k? e.g. when you add their incomes and divide by two, it's more than the 32k which is tax band.

Idleater

Yes if they are jointly assessed, no otherwise.

Walnutsink

Does anyones employer use Travelhub for the bike to work? I picked out my bike 3 weeks ago, submitted all the info needed (it was a week later as I was out of the office) and still haven't heard anything back. Has anyone had a similar experience or is it my employer I need to chase?

Sad Professor

If my employer is registered with Bikes4work, does that mean I can just submit the quote myself using their website? My HR manager is lovely but totally incompetent and I can't see myself having any success going through them. The person who actually manages this stuff is above them anyway and I assume that's who Bikes4work will deal with. Has anyone submitted a quote online this way? How long did it take?

Lemlin

Sad Professor wrote: »

If my employer is registered with Bikes4work, does that mean I can just submit the quote myself using their website? My HR manager is lovely but totally incompetent and I can't see myself having any success going through them. The person who actually manages this stuff is above them anyway and I assume that's who Bikes4work will deal with. Has anyone submitted a quote online this way? How long did it take?

My company uses Bikes4work and our procedure is to submit the application online ourselves.

We have no contact with our HR department until the vouchers come in and we have to collect them and sign a salary sacrifice form so I presume they talk to Bikes4work in the background.

I put my application in on the 1st of October last year and got the voucher on the 2nd of November. Yes, it did take that long. I was hoping a couple of weeks but it was nearly 5.

The HR department in my company wouldn't exactly be great either so the delay may have been their fault and not Bikes4work.

Sad Professor

Do they not post the vouchers to you in some instances?

I already handed in the quotation to HR, but I'm going to submit the online application as well just in case.

Walnutsink

They probably do post them, as email would be far too convenient! A friend of mine submitted his quote in the morning and had a cheque that afternoon. So why these companies, whose job it is to do this, take so long when a finance department can turn it around in a day is beyond me :mad:

But then again, you are getting a half price bike so can't complain too much

hidinginthebush

Sad Professor wrote: »

Do they not post the vouchers to you in some instances?

I already handed in the quotation to HR, but I'm going to submit the online application as well just in case.

I had to input the info on the website back in june, voucher arrived today (they take ours out of our summer bonus). The only contact i had with my own hr dept was to confirm i was doing the scheme and to comit the cash for it. had my first spin this evening. So much more enjoyable than the other bike I was plodding around on!

Lemlin

Sad Professor wrote: »

Do they not post the vouchers to you in some instances?

I already handed in the quotation to HR, but I'm going to submit the online application as well just in case.

My voucher was posted to the HR department and I collected it.

My company may have stipulated that though as I had to sign a salary sacrifice form.

jamesd

Digging up this thread, Bought a bike for €1350, Work gave me a cheque for €1000 and I paid the €350 in cash to the shop.
Girl in work said I could pay it back over 12 months at €20 per month from my wages and this would cost me €10.38 monthly with tax.

I am totally lost with her calculations - Can anyone help and I am on the higher tax rate.

route66

jamesd wrote: »

Digging up this thread, Bought a bike for €1350, Work gave me a cheque for €1000 and I paid the €350 in cash to the shop.
Girl in work said I could pay it back over 12 months at €20 per month from my wages and this would cost me €10.38 monthly with tax.

I am totally lost with her calculations - Can anyone help and I am on the higher tax rate.

Your work colleague needs to go on a "Tax calculations for beginners" course

Basically, 1000/12= €83.33 will be taken off your GROSS salary. Assuming they do it right you will see approximately €40 taken off your NET salary.

You could say nothing and just pay 20*12= €240 GROSS, but it would be dishonest and if/when found out, you'd be obliged to pay the difference I'd guess.

dogsears

jamesd wrote: »

Digging up this thread, Bought a bike for €1350, Work gave me a cheque for €1000 and I paid the €350 in cash to the shop.
Girl in work said I could pay it back over 12 months at €20 per month from my wages and this would cost me €10.38 monthly with tax.

I am totally lost with her calculations - Can anyone help and I am on the higher tax rate.

€20 per month doesn't make sense - comes to only €240 over the year. €20 per week might be right (are you weekly paid?) as 20 @ 50 weeks comes to €1000? Or maybe its the monthly equivalent of €20 per week, if you know what I mean.