Cyclescheme bicycle condition assessment

[sunnyjim]

So from:

"Typical savings are between 40% and 50%"

We've gone to

" the salary sacrifice payments and the market value payment will never exceed the original retail price of the bike. "

Where 'original retail price' is significantly more than 'best deal price for the same bike on the high street'

I think we can say the scheme is well and truly dead.

 

[jig-sore]

my company has just opened their cycle to work scheme

and i quote from the scheme providers website...

http://Transfer of Ownership
The anticipated fair market value at the end of the hire term is £20-£25 plus Vat or 5-7% of the LoC value plus Vat, whichever is greater. This is subject to a separate agreement once the hire term has ended.

i take this to mean you pay VAT on the £20/£25 or the 5-7% NOT the full price of the bike/LoC ??

 

[rogersavery]

I think the word 'anticipated' should be in caps and bold, it is no guarantee of what the cost of buying the bike will be.

And it is actually contrary to the latest guidelines from HMRC

 

[Downward]

Well I won't be using Cyclescheme again

Intrest Free and a good deal on a bike seems a safer option

 

[puglord]

ok guys....i've read up to about page 8 or 9 of this thread and thought i'd share my experience with you.

Our company started the C2W scheme with cyclescheme last July and just under 1700 people signed up.
We too have had the forms sent out to get the cycle condition graded A-D.
What we have worked out is that Condition A = 20%, B = 15%, C = 10% & D = 5%........these figures are based on the voucher price not bike cost if you added to the £1000 limit.

So if you got a cycle worth £500 and its graded D you pay 5% of £500 + vat = £25 + vat
If you got a cycle worth £1000 and its graded D you pay 5% of £1000 + vat = £50 + vat
If you decided to pay extra yourself above the £1000 limit and got a cycle worth £1500 and its graded D you still pay 5% of £1000 + vat = £50 + vat

So you wont be paying more than the actual value of the bike when new, but also you wont be making the saving we all thought we would get like what has happened in previous year (ie 5% regardless of condition)

 

[2Loose]

So in essence, this still seems to be 12 monthly payments and at a grade D valuation, another months payment on top or there abouts.
Which is still not bad at all imo, with a good saving still to be made, especially as my employers always banded about the 5% figure as a final payment anyway.

 

[lindleyjoe]

Has anyone clarified whether it is self assessment or has to be done by the shop in which it was bought? Is there anything to stop you making the bike look really scruffy to influence the assessment. I accidently spilt some emulsion paint on my bike yesterday due to my overly cramped shed. I was going to clean it off but mybe I should leave it?

 

[2Loose]

Has anyone clarified whether it is self assessment or has to be done by the shop in which it was bought? Is there anything to stop you making the bike look really scruffy to influence the assessment. I accidently spilt some emulsion paint on my bike yesterday due to my overly cramped shed. I was going to clean it off but mybe I should leave it?

Self assessment is definitely acceptable. a b c d e.

 

[crumpetman]

Surely it is in the interest of the bike shop to assess the bikes at the lowest value? If they didn't would you use them again for your next c2w bike?

 

[Downward]

What happens if you buy a £700 bike and £300 accessories ?

Surely you don't pay the Market value of £1k for a £700 bike ?

 

[Bromptonaut]

Self assessment is definitely acceptable. a b c d e.

Do you have a link to the HMRC guidance on self assessment?

 

[2Loose]

Do you have a link to the HMRC guidance on self assessment?

It is Cycleschemes guidance on self assessment being discussed, rather than HMRC's.
I guess HMRC don't care as long as they get their tax cut on any benefit in kind.

The guidance passed on to us via my employee is cut and pasted below. It does not give an actual figure, but someone previously mentioned that Cyclescheme appears to have a generic formula to work out value based on the cost of the bike and the condition assessment, e.g Cat1=20% of cost, Cat2=15%, Cat3=10% etc. which I find very believable.


----- excerpt from our correspondence.

To assess any taxable benefit we need to establish your cycle’s fair market value. In order to do this would you please consider the following categories and let me know which category your cycle would fall into. You can, if you wish, indicate that it falls between two categories, e.g. between 3 & 4 or 4 & 5.

Category 1:
A cycle barely or never used since rolled out of the showroom.

Category 2:
A cycle that has been ridden regularly but infrequently to and from work throughout the hire period. Predominantly used on the road or cycle paths for short distances.

Category 3:
A typical commuter’s cycle that has been used regularly and frequently, excellently maintained and serviced, been cleaned and lubricated throughout the hire period. Some leisure use has occurred.

Category 4:
A cycle that has been regularly used for commuting all year round, maintained to a fair standard. It has been used regularly for leisure that may have included off-road riding.

Category 5:
A cycle that has been used frequently for commuting & leisure, maintained with the minimum necessary care. Large mileages would have accumulated on the cycle and a reasonable percentage of these may have occurred off-road.

When you give me have this information I will be able to let you know what the fair market value is and whether you may have to pay some extra tax. I will also let you know the arrangements for payment of the purchase price.

If you decide not to take up the offer to purchase the cycle please contact me to make arrangements for it to be returned to xxxxxxxxxxxxxxxxxxxxx.

I hope that the scheme has worked well for you, enabling you to cycle more, reduce your carbon footprint and feel healthier.

If you have any questions on anything above, please do contact me.

 

[crumpetman]

What happens if you buy a £700 bike and £300 accessories ?

Surely you don't pay the Market value of £1k for a £700 bike ?

As I understand it is done on the voucher value not the bike itself. Otherwise you could get a bike for £250 and then £750 of "accessories" (garmin, expensive lights, ipod even) but as most people have found out, the final payment is a nominal amount.

 

[bad boy]

Hi all,

I have read this with must interest and concern as I have a bike on the scheme.

I popped in to my lbs today and had a chat with them about it and predictably everything is going down as a D and this amounts to 5% (from them anyway). What they did say was the margin they take from the sale has not gone up.

Its a storm in a tea cup, in reality for most this will not affect the final value figure we pay but I do understand why the documentation has been firmed up etc. Cyclescheme.co.uk is not completely stupid they would go bust in a matter of months if the reality is we are paying near enough full market value for these bikes, and they know that.

I would urge people not to worry I do agree with Norm completely and don't use them if you can (set up your own) unfortunately I work in local government and they won the tender so I have no choice but as a tax free incentive its still a really good scheme in general.

I would say there are hundreds of new scheme commuters in my authority and speaking to the shop the amount of newbies coming in for the full works from other local authorities is huge so it does act as a massive incentive to get into cycling so long may it continue in my mind.

 

[BenScoobert]

My contract says, see the bold

11. Your obligations to return the Goods to Us
11.1.
At the end of the Hire Period, You must immediately return the Goods to Us at Your own expense to such address in the United Kingdom as We reasonably specify. This
may be to Our address, to the Suppliers address or if We decide (or where We are leasing them from someone else to supply them to You, the owner decides) to sell
them, (where appropriate) to the buyer. In each case, You must ensure that they are packed properly and securely and sent with all freight and insurance paid. The
Goods must be returned to Us in the condition required by clauses 6.1, 6.2, 6.5, 6.6, 6.8, 6.11 and. 7.1

At our work the final value fee is usually the same as one monthly payment, ie 5%

I asked people who used it in previous years and thats what happened