cycle 2 work

[bazzadigz C+]

Has anybody here completed their Ride to work scheme?

if so, how much was your "nominal fee"?

I have been part of the scheme here for about a year now and others who have recieved their end of ownership statements have been told that they have to go and get their bikes valued and then pay this amount!?

surely this isnt correct?

i'll upload the companies official line when I get home later. Many thanks

 

[fossyant]

Think you are getting stuffed on that one - it is effectively correct - but what is the maket value? Most just charge a nominal fee. If they are sticking to it like the letter of the law, then it's going to be hardly worthwhile.

 

[doyler78]

Yep as fossyant says. Technically the employer is supposed to get 3 quotes to determine a fair market value and then that value must be applied plus VAT of course.

If your company uses cyclescheme then cyclescheme actually advise employers that 5% is appropriate in their contract with the employer however at the end of the day the responsibility for the correct conduct of the scheme always remains with the employer.

As a matter of interest how much did your bike cost and what are they saying is the fair market value of the bike?

 

[goo_mason]

My LOC value 2 years ago was £250, and I paid 5% of that at the end of the term to take ownership of the bike.

Same amount still applies. Only change is that we get a free 15% of the voucher value asked for to spend on cycling accessories at the outset, and it used to only be 10%.

 

[fossyant]

Do you need a specific bike shop to get it values - take it to the participating dealer and I bet they will just say the 5% value.....

 

[ajc]

I've got my latest bike through cyclescheme, they recently sent me a letter stating I could buy the bike off them for 5% of its value which they say is £50 + £8.75 vat. My employer handed responsibilty to cyclescheme to either dispose of the bike or allow me to buy it. I've not heard of getting the bike valued before, at least not by cyclescheme.

 

[historyman]

Here are some other threads on this:
http://forum.ctc.org.uk/viewtopic.php?t=11427&postdays=0&postorder=asc&start=15

http://www.tritalk.co.uk/forums/viewtopic.php?t=40497&highlight=cycle+work+scheme
My employer is promising they won't charge any employee more than 5% of the bike's value (see users' Facebook site at http://www.facebook.com/topic.php?uid=6096024978&topic=4527)
But as far as I understand they can't make this commitment formally.

 

[ajc]

My understanding from Cyclescheme is that they can't make it a formal commitment because it then becomes a benefit in kind which gets the taxman coming after you for his slice.

 

[doyler78]

Do you need a specific bike shop to get it values - take it to the participating dealer and I bet they will just say the 5% value.....

The only stipulation is that the person valuing the bike must be competent to do so, in other words a LBS.

 

[historyman]

LBS?

 

[Baggy]

LBS?

Local Bike Shop.

 

[doyler78]

Local Bike Shop

OK Baggy beat me to that one.

 

[col]

MMM why did that not surprise me?

 

[bazzadigz C+]

I paid £600 for the ike but it hasnt been valued yet, its a Dahon Cadenza 2007.

so if the fair market value is £400, then i'll pay 5%+VAT is that correct (£23.50), if so then i think im seriously being done as my employer i think are trying to say i have to pay for the value of the bike again+VAT.

If so then i'll sell all my bikes and rent a bike from them every year, run it into the ground & abuse it, then i'll get a new one a year later

 

[doyler78]

No if the fair market value is £400 then you will pay £400 + 17.5% VAT ie £470. Clearly a figure like that would kill your company's scheme as no one would use it.

The 5% that I talked about is what cyclescheme use to determine a fair market value and is based on the original cost of the bike. So if your company were to use this formula you would then pay 5% of 600 then add 17.5% VAT which is £35.25. Now that makes scheme participation worthwhile.

If you were to get £23.50 as a final sum if I were you I would be jumping up and own with joy. Depending on what your actual cost over the scheme period was you will have saved at least 33% which is £156.50 saving if my quick calculation is right. If your company can claim VAT back and passes this on (not all do) then your saving would be even greater. Again if you are a high rate tax payer above the National Insurance threashold change then those saving will be greater again.

Sorry if that all sound complicated but that's the tax system we have. All you need to understand is that you will make significant savings on the cost of the bike so long as the sale value of the bike at disposal isn't set too high and 5% or 10% for that matter isn't too high.