Cycle to Work - Maximum

[lejogger]

My employer currently only provides the simple £500 i year ?bike loan, do you still think it is worth us pushing for C2W? i Have read most of this thread but tax incentives are not my strong point so can you perhaps recommend/clarify what we would ideally want the scheme to be based on i.e. would you say we would need the bike to be gifted at the end of say the third year etc to really make a difference to normal rate taxpayers? I ask as i think my employer is looking into C2W

The key is making sure that your employers are happy to foot the cost of the bill for the bikes initially rather than sourcing this out. If they own the equipment then when it comes to selling them to you at the end of the hire agreement they're more likely to do so to ensure that they break even rather than make a profit.
For me, the ideal scheme allows your company to buy the bike.. you pay them back over 12 months in the form of rental payments, (minus tax savings) and then they gift you the bike after 12 months. They have recouped what they have paid out and you have only paid back the value of the bike but made significant income tax and NI savings.

You would then only be liable for a tax bill on the difference between the HMRC residual value and what you paid (i.e. nothing) on a £1000 bike, this works out as around £50 off your tax code.

 

[Norm]

If they own the equipment then when it comes to selling them to you at the end of the hire agreement they're more likely to do so to ensure that they break even rather than make a profit.

This would appear to be the best solution which has been offered to date but there is one thing that I can't figure out.

If a third party were to buy the bikes, the could, I believe, give the bike to the renter at the end of the rental period and no tax liability would be incurred, as long as there was no contract between the employee, employer and third party to say that the bike will be given away, then the gift from the third party would not arise from employment so... well, so I don't think it would incur a schedule E liability.

I'm not certain enough to try it, though.

 

[paulw1969]

^^^thanks folks, food for thought, i work for the Crown so hopefully (dependant on what they offer) might be worth look for some people.