Cycle to Work how much should I 'sell' the bikes for

[Twanger]

Remember...it's an ex rental bike...been rented out for 12 months. Ex rental is always cheaper than straight second hand..

I'll be paying 5% on my Brompton when the time comes. Otherwise, the second hand value would mean I'd have to buy it twice.

 

[goo_mason]

Been 5% on both the bikes I got through the scheme in the last three and a half years.

 

[Gibbyent]

Phone the local police and ask what they sell unclaimed stolen bikes for.
That should give you a fair idea of the market value to an organisation that wants to get rid of unwanted bikes in bulk.

 

[User482]

Ours is 5%. So given that the maximum on most schemes is £1k, that's only £50. Seems reasonable to me.

 

[WimbledonCyclist]

It's not only the bike itself you're selling, assuming people have bought accessories and clothing as well. Market value for these can be close to nil. The near-nil value of the accessories would justify applying a relatively low percentage to the original purchase price for bike plus accessories.

But perhaps I'm wrong and there is a market on which people are looking to make outrageously high bids for the three pairs of padded cycle shorts I've been wearing straight "on the skin" for the past 12 months ...

 

[the reluctant cyclist]

For all of you who have had to buy the bike at the end of the scheme - did you also pay monthly as a salary sacrifice?

I paid the exact amount that my company paid for my bike through my salary monthly and then when I wanted a new bike through a new scheme they charged me an extra £25 plus VAT ON TOP of the full amount that I had paid back - I see that as my company making a £25 profit out of me.

Is that normal or should I have only been charged for the bike at the end of the 18 months if I had not paid the full amount as salary sacrifice?

My company doesn't understand the rules and neither do I to be honest!!!

 

[Lizban]

For all of you who have had to buy the bike at the end of the scheme - did you also pay monthly as a salary sacrifice?

I paid the exact amount that my company paid for my bike through my salary monthly and then when I wanted a new bike through a new scheme they charged me an extra £25 plus VAT ON TOP of the full amount that I had paid back - I see that as my company making a £25 profit out of me.

Is that normal or should I have only been charged for the bike at the end of the 18 months if I had not paid the full amount as salary sacrifice?

My company doesn't understand the rules and neither do I to be honest!!!

You didn't buy the bike during the 12 months - you leased it off the Company (it happens to be for exactly the amount the Company paid!).

The bike belongs to the Company and is an asset, therefore they can not give it to you otherwise they would.
1. Be failing their shareholders (or tax payer if public sector etc)
2. You would be liable for benefit in kind tax

So have they made £25 out of you - yes
Do they have a choice - no
Did you save overall when you account for the £25 - yes


It is a little complex (one of my greatest gripes about the scheme) but they have done this correctly.

 

[garrilla]

So have they made £25 out of you - yes
QUOTE]

But you should still have got it at a greater discount that if you purchased it directly.

 

[Lizban]

So have they made £25 out of you - yes
QUOTE]

But you should still have got it at a greater discount that if you purchased it directly.

A little unfair not posting the following points I made - which agrees with what you have said!

 

[redjedi]

The company I work for don't charge any extra after we have finished the scheme.

They keep the bikes on their books for another year, before writing them off.

This is easy for them to do for most of the bikes, but our accountant wasn't too happy when one of the MDs got a £5000 MTB on the scheme

 

[garrilla]

A little unfair not posting the following points I made - which agrees with what you have said!

sorry

I missed read your 3rd point

 

[Bman]

I think I've heard 5% mentioned for a few of the schemes.

Legally speaking, you can't transfer the ownership for nothing - that would attract income tax at the value of the asset, so it has to be something you can defend to HMRC as a 'fair' value.

You can however let the cyclists continue to use the bikes at no charge, with the ownership staying with the company.

This is pretty much what my HR people have said.

 

[Gibbyent]

Legally speaking, you can't transfer the ownership for nothing - that would attract income tax at the value of the asset, so it has to be something you can defend to HMRC as a 'fair' value.


Not strictly speaking true if you can make an argument that to dispose of the bike would cost the company money, then the efective fair market value is negative in which case transfering it for free would be legal.

 

[joebe]

The company I work for don't charge any extra after we have finished the scheme.

They keep the bikes on their books for another year, before writing them off.

This is easy for them to do for most of the bikes, but our accountant wasn't too happy when one of the MDs got a £5000 MTB on the scheme

Similar to mine. Kept it on the books for another 12 months with me paying nothing to lease it then charged me £5 (cost new was £2600). Probably helped that the frame was written off and I have the pictures to prove it, no need to mention the new warranty frame though.

 

[BentMikey]

I remember that, I was gutted for you...