Cycle2work new £2,000 limit

[deckertim]

We have just had details of our new cycle2work scheme for 2011 published. This is now has a £2,000 limit and payment is made over 3 years. Hopefully this will address some of the issues with residual values. The tricky bit could holding on to your job for 3 years!

 

[upsidedown]

That sounds like a good idea. 2 grand, now let me think.........

paul

 

[benb]

We have just had details of our new cycle2work scheme for 2011 published. This is now has a £2,000 limit and payment is made over 3 years. Hopefully this will address some of the issues with residual values. The tricky bit could holding on to your job for 3 years!

Right, I want a job where you work!

 

[Moodyman]

That's a real bummer.

I had to make quite a few sacrifices when I chose my bike earlier this year. With £2k, I could have built up my dream bike.

With 3 bikes already, I can't justify opting into 2011 scheme

 

[Norm]

Is your employer a financial company or does it have a group consumer credit licence for some other purpose?

If not, I'd suggest you don't spend more than the £1k, your employer will have issues with the legitimacy of the scheme and may have the OFT knocking on their doors if these rules are broadcast.

 

[DrSquirrel]

We have just had details of our new cycle2work scheme for 2011 published. This is now has a £2,000 limit and payment is made over 3 years. Hopefully this will address some of the issues with residual values. The tricky bit could holding on to your job for 3 years!

I assume you are specifically talking about your own work place rather than the C2W scheme itself... The limit has always been above £1000, The problem was the consumer credit licence required to "lend" more than £1000.

 

[adscrim]

We have just had details of our new cycle2work scheme for 2011 published. This is now has a £2,000 limit and payment is made over 3 years. Hopefully this will address some of the issues with residual values. The tricky bit could holding on to your job for 3 years!

The residual value conditions will remain the same. HMRC has said, via their valuation matrix, that £2k over three years will have a residual value of £240. The issue is whether your employer will charge that full value or tax you on that value.

Did the documentation mention the £2k as an icrease? Could it be a typo?

 

[Norm]

I assume you are specifically talking about your own work place rather than the C2W scheme itself... The limit has always been above £1000, The problem was the consumer credit licence required to "lend" more than £1000.

There has never been a limit in the C2W scheme guidance. The £1k is, and remains AFAIK, an issue because companies are not allowed to lend money without a licence, which is why this particular part of the scheme comes under the OFT rather than HMRC. The OFT considers the C2W agreement to be a consumer hire agreement so the companies which offer it must be licenced.

The OFT has created a Group Licence specifically for those companies which operate C2W schemes. That licence states:

Please note that the group licence covers the loan of bicycle(s) and/ or bicycle equipment up to the value of £1,000 (including VAT and not taking into account an income tax exemption). If you carry out regulated transactions other than that described in the group licence, you will need to apply for a standard consumer credit licence.

 

[DrSquirrel]

There has never been a limit in the C2W scheme guidance. The £1k is, and remains AFAIK, an issue because companies are not allowed to lend money without a licence, which is why this particular part of the scheme comes under the OFT rather than HMRC. The OFT considers the C2W agreement to be a consumer hire agreement so the companies which offer it must be licenced.

The OFT has created a Group Licence specifically for those companies which operate C2W schemes. That licence states:

Okay but still, I am pointing out that there isn't a £1000 limit - saying "the limit is more than £1000" is a mistake to a pedant only.

 

[deckertim]

It is not a typo, they have said "we listened to you and have increased the amount to £2k and the payment to 36 months" I just wondered whether the HMRC rules had changed. I work for a financial services company, so they probably have a consumer credit licence in place to cover this. The actual scheme is administerd by Halfords.

I wouldn't mind a new lighter titanium bike, so I am tempted, but I am still not sure whether it is worthwhile.

 

[Browser]

Ooooohhhh, noooooo, that are dangerous that are! Puttin' temptation in a body's way like that, shouldnae be allowed!!! That means, when my current scheme's time is up, I could, sensibly, look at buying a nice 'bent. NO, no, I must RESIST!!!!

 

[Norm]

Okay but still, I am pointing out that there isn't a £1000 limit - saying "the limit is more than £1000" is a mistake to a pedant only.

I didn't say that you had made a mistake. I was adding to your contribution, not correcting it.

Ooooohhhh, noooooo, that are dangerous that are! Puttin' temptation in a body's way like that, shouldnae be allowed!!! That means, when my current scheme's time is up, I could, sensibly, look at buying a nice 'bent. NO, no, I must RESIST!!!!

Do you work with Tim? Or in the same industry? Or for an employer that has a consumer credit licence?

If not, I strongly suggest you actually read the thread before we have any more misinformation spread.

 

[sayek1]

This residual value lark....

If you have bought a bike say for £1k, but remove VAT, tax etc you are paying only £500 which across 12 months is £42 per month how does the residual value work - surely you have paid the whole lot off )albeit with some hefty tax savings)?

Is the residual value only for those people who aren't paying the full £500?

 

[Tynan]

that is a lot of money for a bike to ride to work on

oh yeah

 

[Downward]

Intresting. Our org are looking to bin cyclescheme maybe by the time the new company come on board our limit will be £2k over 3 years too