Who are CycleDream?
CycleDream are East St Cycles (Farnham and Walton's premier cycle shops) and Richmond Cycles (30 years young).
Download CycleDream Pamphlet
Is the Scheme open to everyone?
The Scheme is open to almost anyone over 18yrs who pays Tax through PAYE. As long as the salary sacrifice will not take you below the National Minimum Wage and your contract of employment extends beyond the period of the hire scheme, you are eligible.
If you're a one man band or simply a small cog in a giant machine, CycleDream is here to get you on your bike quickly, easily and Tax Free.
Is there a limit to what bike or how much I can get?
Unless your employer has a Consumer Credit License then the limit for the scheme is £1000.
However you can buy a more expensive bike and pay the balance above £1000 yourself and put the rest onto CycleDream.
If your employer has a Consumer Credit License then you can buy whatever they are happy with, as long as you meet the terms of the scheme (see above).
What bikes are available?
If we stock it and it meets the conditions above then it's available through CycleDream.
Can I use the bike for my own leisure usage?
Most definitely. You'll find you want to use it more and more.
What is the process and how long does it take?
It's very simple and very quick. In many cases you don't even need to sign up and if you have the company credit card you can be set up on the spot!!
Otherwise,
First, get you company to sign up and agree to run CycleDream,
Then select the bike, safety clothing and accessories that you need. We'll complete all the paperwork and email it to your employer.
Assuming your employer approves your application they will countersign the Hire Agreement and pay CycleDream.
Finally, we'll set up your bike with all your accessories, ready for you to pick up at your convenience.
Finally, Finally and most importantly, your ride off on your new Tax Free, interest-free Bike.
Who actually owns the bike?
The Employer owns the bike. At the end of the salary sacrifice period, they may simply loan it to you for your use or you can buy it off them at "fair market price". This is normally 5-10% of the original cost, so £50-100 inc VAT for a £1000 bike.
What does salary sacrifice mean?
Salary sacrifice happens when an employee agrees to give up part of their salary for a period (usually 12 months with CycleDream) in exchange for some kind of non-cash benefit, in this case the loan of a bicycle and safety equipment. The employee pays less income Tax and National Insurance, as salary sacrifice is taken from the gross salary (before Tax) rather than net pay.
What about saving the VAT?
VAT registered Employers can reclaim the VAT on the CycleDream Bike and accessories and usually pass this saving on to their employees.
What does it cost the Employer?
Employers also save on Secondary Class NICs (usually around 12.8%) as the amount they're paying in wages is also lower. See hmrc.gov.uk/specialist/salary_sacrifice.pdf for a more detailed explanation. This should more than cover any financing and admin cost from running CycleDream.
Insurance and Maintenance?
The employee is responsible for both of these, even though the employer owns the bike.
What happens at the end of the agreement?
You have two options
1: Simply continue to use the bike. The employer, just loans the bike, for which they have been fully reimbursed, to the employee.
OR
2: Employees may be allowed to buy the bike for fair market value. A figure of 5-10% of the original cost is the norm here. A VAT invoice is raised by the company and paid by the employee and transfer of ownership is now complete.
CycleDream DOES NOT attempt to acquire the bikes to re-sell them back to employees, as do other schemes.
What happens if the employee leaves or is made redundant before the end of the scheme?
If an employee leaves or is made redundant during the hire period they must pay the remaining balance in full from net pay i.e. without any tax exemptions.
Can I pay it off early?
Yes and no! If you want to make the savings then no, you can't. The scheme relies on you making the payments for you to save the Tax.
You can pay it off in a lump sum, say if you the circumstances change, but you would need to pay the full amount outstanding from your net salary or savings, so you won't enjoy any tax savings.