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Cycle to Work dealer upping advertised price.

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  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    I am really tired and had written a detailed long explanation of VAT and then realised, while simple, it is patronising, so deleted.

    Long story short, I am going to presume behind the scenes you do understand how VAT works and your main income is simply a kickback/commission from the supplier for providing front of house services. In regards your adding VAT for B2W purchases, that isn't what's happening unless you don't understand VAT and are sort of not quite double charging. I'd be more honest and say there is a fee for the additional paperwork and the % cut that B2W cut. Saying it is additional taxation, regardless of what is going on behind the scenes is misleading as it either means you don't understand VAT or you are lying.



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    OK, I'm just trying to get my head around that. Using the Engwe bike as example, if I purchase today without BTW, I pay 1600 euro. The Chinese company will issue invoice to me. Has 23% VAT been paid on the bike? I assume it would have to have been paid to get into the EU and Ireland.

    If the VAT has been paid, then the cost without VAT is 1300 euro. If Pogo offer the BTW, all you need to do is issue a new invoice with the base price (1300) and add VAT to it. Your accounts are reconciked by what you paid to the manufacturer, who may have already paid VAT. This happens to the tune of billions per year by any business importing or drop shipping from outside the EU.

    Your commission from the manufacturer is completely separate to this. Your sales would be higher too. It's not complicated. It's just been made complicated by a misunderstanding of how and where VAT is applied, or VAT is not being paid on the bikes.

    Stay Free



  • Registered Users Posts: 3,945 ✭✭✭0ph0rce0


    I just purchased a bike form another retailer on the BTW scheme. Same type of website, same type of setup. You buy online, he buys from China or whatever or puts an order in as a reseller or and they ship it on.

    I was originally going to pull the trigger with pogocycles then saw the extra fees so decided not to and shop around.

    The other retailer gave me an invoice for the bike ex vat + vat and it was the same price as advertised on the site.

    Had I have bought the bike from pogo I was looking at another 200-300 and the tax savings would have been minimal with the extra changes. I'd have been better buying outright.

    I don't know how it works but seems weird the other store doesn't need to add on the VAT again and other charges.

    Either way I'm happy out.



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    Who did you buy from? I'm looking at getting an electric bike soon. I refuse to pay extra fees because of a poor setup with vat and invoicing. Would be great to see Pogo fix this mess for BTW customers.

    Stay Free



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    This is what I expected might be the case. Thanks for being transparent. It definitely complicates things, but I'm sure there is a way to regularise the vat situation and remain competitive while offering your customers the BTW scheme. I'll drop back later.

    Stay Free



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  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 49,397 CMod ✭✭✭✭magicbastarder


    this is a simple question with a yes or no answer - if i request a quote for a bike on the cycle to work scheme, is the price going to be higher than for a 'private' sale?



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    Yes. My BIL went through POGO. The btw was higher price. He just paid privately in the end.

    Stay Free



  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 49,397 CMod ✭✭✭✭magicbastarder


    but they claim that's due to 'taxes'. why are they the only bike retailer (i am aware of) which claim extra taxes are levied because of the bike to work scheme?



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    They are supposedly paying the chinese manufacturer the list price of the bike and receive a kick-back/commission for that. If going via BTW, then Pogo are taking the list price + VAT and are then adding VAT on top.

    What they should and could be doing is listing the base price of the bike...say €1300 in the example I gave and then charging Irish VAT of 23%. What makes it easy, is the Polish VAT rate (country the items arrive into Europe) is also 23%, so Pogo are just making it complicated when there is an easy way around.

    @pogosupport You should look into this. You're welcome.

    Post edited by ...Ghost... on

    Stay Free



  • Registered Users Posts: 3,986 ✭✭✭68 lost souls


    No what they have clearly said is the Chinese companies are avoiding tax on imports in a shady manner so if you are buying through a traceable method like btw then they have to charge vat because they can’t claim it back in what they have bought it for. The actual problem - ignoring the illegality of the hikes themselves since once it has a throttle it a mechanically propelled vehicle and not a pedal asssit - is that the Chinese are illegally not paying any tax.



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  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    Again, this doesn't actually make sense as you still have to pay VAT on goods from Poland, that is usually charged locally but if you were VAT registered you could import sans VAT and apply it here. The other option is to remove the VAT applied already and then apply Irish VAT. For the bike to work you just need to provide an invoice and then receipt. You should in theory be able to just generate an invoice, pass the money through and then give the same normal receipt you'd give from a normal sale.

    For example when I buy a bike from Germany, I still pay VAT in the price. It might be Irish or German VAT depending on the size of the company.

    Are you saying they don't provide a receipt?

    This is sounding even more dubious.



  • Registered Users Posts: 14,336 ✭✭✭✭jimmycrackcorm


    This still doesn't make sense.

    How is it that I as a private buyer don't have to pay the extra charges?

    Surely I'd get a receipt that shows the VAT as part of the website price?

    Seems to me that, the best day to logically do it is modify the quote to reflect the website price and ask my employers accounts dept to buy the bike online using the company card.

    As its the employee who is actually buying the bike, there is no additional VAT issue for the company. And apparently nothing illegal as the employee could simply pay the website price anyway.



  • Registered Users Posts: 23,497 ✭✭✭✭ted1


    If you are selling over 75k of goods into Ireland. You legally have to register gor VAT here.


    https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/vat-thresholds.aspx



    in summary just buy from proper bike shops as opposed to drop shippers



  • Registered Users Posts: 23,497 ✭✭✭✭ted1


    I’d love to see you use that excuse to revenue and the courts


    by your own admittance you are openly encouraging, enabling and participating in Tax evasion.



  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    It allmmakes sense now. Thanks for clarification.

    If your advantage is by not paying VAT on non BTW purchases, then the advantage is unfair and illegal. You can't wash your hands of it by claiming you don't sell the bikes, because that's not how it would be seen by revenue or the courts. You are benefitting from tax evasion. You need to regularise this situation as soon as possible.

    At the very least, any goods you are indirectly selling need to have Irish, Polish or any other EU VAT applied. You would have better negotiating leverage with the suppliers if you purchase the bikes as a reseller, rather than as a portal agent. You can still be very competitive without breaking the law.

    Stay Free



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    Irish Law aside, intra EU selling requires an invoice must be provided when selling across borders to individuals. I hope your boss is taking you aside to have a word with you about what you should and should not post online. I would be raging if an employee was implicating me in facilitating tax fraud.



  • Registered Users Posts: 7,219 ✭✭✭Tow


    So the Polish lads buy parts from China.

    They (should) pay Polish VAT on the parts to the Polish Tax Collector.

    There may also be Duty issues, but don't want to over complicate things.

    They build a bike from the Parts, this is called Adding Value. It is no different from the old Ford plant in Cork and many other long gone 'Irish' Car Manufacturers.

    They sell the bike into Ireland, charging Polish VAT. They pay the difference between the Parts and finished Bike VAT to the Polish Tax Collector.


    When POGO sells the Bike for B2W they charge VAT again on top of the Polish price (including Polish VAT) again, not just on the Value they are Adding for handling the sale?

    When is the money (including lost growth) Michael Noonan took in the Pension Levy going to be paid back?



  • Registered Users Posts: 4,629 ✭✭✭standardg60


    My reading of it is when buying privately you deal directly with the supplier, but with BTW Pogo buys it first and then sells it to you (hence why they issue the invoice). I assume you can only get BTW bikes from Irish registered companies?

    The dodgy bit is from the calculation on page 1 Pogo seems to be claiming that they're paying the same price as you, and that they then have to add vat to this amount and pay that full amount of vat to revenue.

    As posters have said earlier, go to a bike shop.



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    No requirement to buy from an Irish bike shop, it is dependent on the company and many make it easier on their accountants by putting in specific shops etc. but the bike can be bought from any bike shop worldwide



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    Apparently but they are a VAT registered company (apparently, I can't find their VAT number but I didn't look hard). This means they should be returning their VAT accounts on a regular basis and it would be clear that they should be claiming back the polish VAT and administering Irish VAT on their total price. Even as a forward shipper, the companies they get the gear forwarded from should be providing an invoice as required by EU law for intra EU shipments.

    It is entirely possible that they do not realise what they are doing is wrong and also that their accountant is missing a trick, but still, it is quite shocking in this day and age that they have gotten away with this error for so long.



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  • Registered Users Posts: 23,497 ✭✭✭✭ted1


    Yes you are , you are knowingly facilitating the sake of bikes , by your own admission which were imported ass parts to avoid taxation.



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    Apologies, this is different to what you said before, someone along the line should be applying VAT and customs. If your a market place, inside the EU, the company sending the bike still has to supply an invoice to the customer. If they are as you say, not doing this, how do people deal with warranty claims, etc. I think there is something lost in translation here because in my mind, it doesn't make sense.



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    You are mixing things up here, paying VAT on your commissions doesn't mean tax evasion isn't occurring. If they were doing it without you knowing it, that would be a different, but you know this is your USP, you have as much as said this on several occasions. Now I doubt that is actually happening as it is too big a trick for revenue not to catch on to so then you are effectively double taxing the customer.

    Because, the way you are describing things, you get no paperwork when you order the bike, no order confirmation, no nothing. How do you manage your own accounts if they are not sending you invoices for the bikes that you buy from them for the bike to work scheme?



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    At this point it is hard to tell as your story changes each time by a bit, someone is committing fraud if as you say bikes are being imported into the state without VAT being paid at any point. So you are either not accounting for VAT properly (costing you and your customers money, but may not be illegal, just silly), or you are facilitating the sale of goods without the payment of Tax and are complicit in the circumvention of tax payment to the state. Judging by this comment though, it would appear you know that your supplier is not following the law and are helping accommodate this for your own benefit. Either way, revenue will not be impressed.



  • Registered Users Posts: 4,629 ✭✭✭standardg60


    If Pogo receive the invoice from the supplier, then generate a new vat inc. invoice for the customer, then they have purchased the bike themselves first. I don't see how this can not be the case, even though they say they don't purchase bikes.

    They can't generate the new invoice in the name of the supplier, as it wouldn't be the original, and why would they anyway if the supplier isn't vat registered.

    It would seem to me that buying through BTW with Pogo then they are the supplier and your contract is with them.



  • Moderators, Sports Moderators Posts: 24,772 Mod ✭✭✭✭CramCycle


    For bike to work, that is exactly what they do. For non bike to work they claim to act as a forward shipper, which depending on how they do it, might mean you are buying from a random other company. You are right though, in the first example for bike to work, they buy from Poland and either pay Polish VAT or are sold it ex VAT and they add it on, either way the difference in price for doing this should really only be a couple of euro as they either claim the Polish VAT back or get it sent ex VAT so it is cheaper.

    They seem to charge 23% more doing the former, which means they are either

    a) adding a cost on for being the shop, nothing wrong with that and is absolutely fine but calling it VAT isn't

    b) they are buying it ex VAT, again fine, and adding it on, this is also fine but it means that if the price you pay as a direct customer is ex VAT. That implies the company they are acting as a forward shipper for are evading tax and they are by proxy facilitating it (as they seem to know this is happening). No one on line is getting stung for customs so it all seems a bit weird but not impossible, still not above board.

    c) they have a really awful accountant, the forward shipping company are in fact paying VAT and they are not reclaiming it.

    They do not have their VAT number on their website which is both unusual (but not illegal AFAIK) so it is hard to check are they VAT registered but their rep has said they pay a lot to revenue, way over the VAT registration limit so presumably they are.

    Either way, it appears that you get a good deal unless you have an issue with your bike, in which case you will wish you went through a local bike shop based on the FB reviews.



  • Registered Users Posts: 25 jackoc


    I received2quotations from pogo for same bicycle

    1. 990 plus 229 vat =€1228
    2. 1149 ex vat 264= €1413
    3. same bicycle is slightly cheaper on website , the magic occurs when I take bike to work route, their rep said the €1413 option is correct , I cannot see where they get this figure the Maths do not stock up


  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    I had the same trouble when getting quotes for my Brother in Law. He eventually just bought without the BTW scheme.

    I'll be buying an e-bike in about a month. But because I'll be using the BTW scheme, I won't be using POGO, even though they have the bike I want. Their system is confusing, sloppy and doesn't inspire confidence by the use of shady import methods.

    Stay Free



  • Moderators, Sports Moderators Posts: 20,327 Mod ✭✭✭✭Weepsie


    I wouldn't be using pogo because the bikes look like pieces of ****. Buying from drop shippers you'd want to be be mechanically minded to be able to maintain the bikes



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  • Registered Users Posts: 3,567 ✭✭✭...Ghost...


    I'm an Engineer, so I would be OK there. The bike my BIL got is good. It had a broken bracket on arrival and needed a replacement part sent out.

    My reasons for going elsewhere are solely to do with how they treat BTW purchases.

    Post edited by ...Ghost... on

    Stay Free



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