Cycle 2 work scheme

[ChrisM]

My company charged 10% of bike purchase value but I've heard of people paying a £1 for theirs!!

 

[addictfreak]

Hi. I had thought of raising a new thread on this, but as you happen to mention it, what percentage of original shop ticket price did you have to pay to gain ownership of the bike at the end of your C2W HP period?

Seems to vary from scheme to scheme or employer to employer. I paid £20 final payment.

 

[Common Rail]

Thanks for the replies.

I hope mine's £1, I wouldn't mind £20, but 10% sounds a bit OTT.

 

[Lizban]

I think it has to be a fair market value (or it becomes a taxable benefit)

 

[MrRidley]

On my £500 voucher, i was asked to pay £29 and the bike was mine.

 

[addictfreak]

What happens at the end of the hire period?

At the end of the hire period employees may be given the opportunity to buy the bike for a full market value, however this cannot be an automatic entitlement. The cost of full market value cannot be stated before or during the hire period as this could be considered a benefit in kind and therefore not be eligible for tax benefits. Many employers opt for Cyclescheme to take ownership of the bikes at the end of the hire term, in which case any offer sale to the employee will come directly from Cyclescheme.

http://www.cyclescheme.co.uk/employee,faqs.htm


Such an end payment would make this whole scheme a non starter.

Example: I buy a bike for the full voucher price (£1000). I pay the monthly payments for 12 months approx £640-£700.

I am then asked to pay full market value to keep the bike. I would guess that a 1 year old bike should be worth at least £600 in this instance.
That would mean a full price of £1240-£1300!

 

[Norm]

There is very little written about this, because you cannot define "fair market value", but most schemes charge 5% to 10% of the purchase cost of the bike. Note that any accessories bought with the bike will be pretty much worthless after a year.

HTH

 

[mangaman]

Nice scheme if you can get it....that's where the similarities end.


It would be interesting to see the adoption of this scheme within the Civil Service; and whether we now have legions of cycle commuting city councillors and staff. How many politicians have opted for the humble Brommie, as part of the initiative (Mandleson doesn't count he already had his.)
.

Chap, as an NHS employee I posted a thread about this a while ago.

The take up has been poor (in fact virtually non-existant) according to my anonymous sources on the board of the scheme.

The glossy brochure was pretty good and purely by chance it was sent out again this very day to everyone in our trust. As people have said the literature says it should be used as a commuter for >50% of usage but no checks will be made.

It also allows a wide range of bikes to be bought.

My problem with it, was it didn't take anything else into account.

As you say I could have got a bargain on a blingy bike that I never went near work with, but that seems wrong.

There are still no extra cycle parking / no covered cycle parking at all / no showers or changing facilities available at work.

I cycle or walk to work, but I only live about 2 miles away and can cycle sedately in a suit without needing a shower, and tend to walk as bike parking is so scarce.

To seriously change cycle commuting as a cultural thing (especially outside London where it seems to be more normal after the CC) you need to look at the whole process.

ie storage of bike / security / showers.

The leaflet makes it clear if your bike is nicked before the 12 months is up it's your responsibility, For example. So you ride to work in a hospital where a million people come and go all day. There is no proper secure bike parking. No CCTV. If someone nicks your bike it's your fault. You have to pay the full replacement cost.

I think they should have tackled the real issues for cycle commuters before they offered cheap bikes - they're just going to be bought by people like us

 

[cyclenic]

well i'm confused, when originally posted about the cycle to work scheme, the comments i received where supportive, and that there wouldn't be a problem with me not cycling to work on it, as it won't get checked or monitored.
As i'm an honest person, i contacted my work, questing whether i actually had to cycle to work on it, and was told, no, it was no longer a criteria.
"There is no requirement to use the bike for work anymore, so using it for improving your fitness and relieving some stress is OK, great in fact "

I'm happy with the reply i received from my work, and have kept the email.
If it was likely to be an issue, wouldn't the applications be scrutinised more?

 

[Norm]

It is very unlikely to be an issue - I don't think that anyone on here has any direct personal experience of having been checked, although the first approach should be through the employers.

What your employers told you was wrong, plain and simple. That is one of the few things that I will ever put as a fact on here. Read the stuff I posted in reply #4, read the links etc. That is the legislation.

The DfT's guidance says:

Employees are not expected to keep mileage logs but employers should make clear to them that if they do not use the cycle mainly for qualifying journeys, they may lose the benefit of the tax exemption. In that event the employer would have to report the benefit in kind on form P11D, and account for Class 1A NICs, in the normal way. The employee would be liable for the tax due on the benefit in kind.

What you have is a rock-solid case against your employers if you are the first person that Mr Taxman does come back to check. With the written advice which you have been given by your employers, it would be very difficult for them to fight a claim in the very unlikely situation that it ever did come to that.

What your employers have is potential for fines, claims and embarrassment. If a competitor ever got hold of the email which you were sent, or if a disgruntled employee sent it to HMRC, I reckon the very least they'd get would be a fine-tooth-comb tax inspection. Whoever sent you that email, I suggest you put them right on what they should be putting in written correspondence as soon as possible.

IMO, what your employers should be doing is putting the regulations / legislation in writing to the scheme's participants, then maybe verbally advising people that HMRC are very unlikely to ever check up and would have little to no way to gather evidence anyway, as the people using the bikes are not required to keep mileage logs.

Use the bike a couple of times to go to work, get it seen at the office or use it to get to the train station and you should have no issues at all. HMRC would find it very difficult, if not impossible, to build a case against an individual without spending a lot of resources to do so.