Cycle To Work Scheme and Bike Choice

[Norm]

Seems you do have ears like a bat haha.

And the stomach of a beer keg.

 

[DonnyDarko]

And eyes like an Owl?

What's your drink?

 

[Norm]

Alcohol.

 

[DonnyDarko]

+1

 

[dodgy]

Couldn't find a better thread, there's been lots of them!

HAve there been some subtle changes in the scheme, or maybe it is just the one I'm on?
This is an answer to the question "what happens at the end of the 12 months"

You may be able to start a new scheme with a more up to date bicycle, if your employer wishes to implement a new scheme. The bicycle and equipment can be returned or collected;

Your employer may agree to let you continue using the bicycle and equipment beyond the end of the scheme at no further cost to you;

Alternatively, you may have the opportunity to buy the equipment at any time after the end of the hire period at fair market value.

It's the bit in bold I'm on about.

 

[lejogger]

If I got a 3k bike and the mrs a 2. I think it still might be worth it given the fact I'd be able to claim the VAT back, and get the discount, and then get the bikes at a reasonable price at the end of the 'loan' term.

Just a quick warning... the VAT rules have now changed due to the case of AstraZeneca where the Court found that the provision of vouchers provided through a Salary Sacrifice arrangement was a supply of services for consideration, which was liable to VAT at the standard rate. Whilst this case was specific to vouchers, the principles considered and applied by the Court are of general application and will apply to other goods and services provided to employees through Salary Sacrifice arrangements.

This could obviously reduce the savings you can make fromt the scheme.

 

[DonnyDarko]

Hi Dodgy. Thanks for the reply buddy.

My account got back to me and basically said the OFT credit license thing is more for companies that are worried staff my leave and they risk losing money, but with a credit agreement in place they can chase the payment no matter what. Though in my position as I'm the owner and employee of the company I wouldn't really need to do that and that I should just buy the bikes I want, claim the VAT back, let the business own them for the time being and then loan them to myself long-term. Then one day down the line write them off but keep them.

So it seems I don't have to mess around as much as I first thought I just need to buy them.

Seems a good scheme for people not getting bikes over £1k though. And for large firms who perhaps have management type staff who would like a bike over £1k it might be worth them to get the credit agreement but even then the company can just buy the bikes if it was some bonus type thing they were dishing them out for.

But thanks to you all for your help in all my threads.

I'll perhaps get Xmas out of the way as I have had a cast off my leg yesterday and have a splint on for the time being so I can't be riding to much for now, then I'll check back here to see what bike options you'd think would suit me etc.

Thanks again.

 

[lejogger]

Couldn't find a better thread, there's been lots of them!

HAve there been some subtle changes in the scheme, or maybe it is just the one I'm on?
This is an answer to the question "what happens at the end of the 12 months"


It's the bit in bold I'm on about.

Essentially yes. The transfer of ownership part changed when HMRC defined the fair market value and made the scheme more expensive for some who were signed up. Instead of paying a potentially high transfer of ownership fee, your employers may choose to delay or prevent a transfer of ownership but merely let you continue using it until the value becomes negligable. (about 6 years)

There are other options however, which will usually involve paying tax on the value of the goods transferred; either the full residual value or the difference between the residual value and the final payment.