Cyclescheme bicycle condition assessment

[mark barker]

I think the main reason for the changes is that the taxman has realised just how much public money it's costing to provide £1000 carbon fibre toys to people (my employer isn't running a scheme - can you tell)

I think that is a valid point, and I'm sure the limit was way too high to start with. The idea of the scheme as I understand it was to encourage people to start commuting on a bike. To do that a £250 bike will be fine for a first time rider. Sure, theres those that'd argue that £1000+ is a commuter bike, but the riders of those types of bikes aren't really what the scheme was aiming at.

As an aside, its worth remembering when working out how much the bike has cost that the payments are interest free. How much extra would you have had to pay if you'd put you purchase on a credit card or taken out a loan?

 

[BenM]

How much extra would you have had to pay if you'd put you purchase on a credit card or taken out a loan?

Nothing extra - I could have bought the bike outright cash in hand (well debit card in hand at least) but who am I to turn down free money from the government?

B.

 

[Jezston]

I think that is a valid point, and I'm sure the limit was way too high to start with. The idea of the scheme as I understand it was to encourage people to start commuting on a bike. To do that a £250 bike will be fine for a first time rider. Sure, theres those that'd argue that £1000+ is a commuter bike, but the riders of those types of bikes aren't really what the scheme was aiming at.

I dunno, Bromptons tend to start at £700 - add on the cost of lock, lights, helmet, clothing, pump, bags ... that could easily start coming close to a grand. Electric assist bikes start at similar prices. Both are essentially 'commuter' bikes.

 

[John the Monkey]

I dunno, Bromptons tend to start at £700 - add on the cost of lock, lights, helmet, clothing, pump, bags ... that could easily start coming close to a grand. Electric assist bikes start at similar prices. Both are essentially 'commuter' bikes.

..and the scheme isn't aimed at "new" cyclists per se at all, it's aimed at encouraging more cycling to work full stop. for the new cyclist that *could* mean a £250 bike, for a keen leisure cyclist that could mean a fairly expensive winter/commuting bike that they don't mind mudguarding and racking up for a year 'round commute.

for someone who uses train or bus + bike, Brompton is where it's at (to the extent that some companies' regulations are written to exclude other types of folder) and they're not cheap.

 

[addictfreak]

I have used C2W once, I bought an expensive MTB (paid the extra). Bike is used for work along with my road bikes and also for leisure.
At the end of the scheme I paid £20 to keep the bike. So all in all, I would say that I paid about £1250 for a £1500 bike.

Was it worth it, well yes because I have a cracking bike. Would I use it again? No, why. If I had shopped around on the internet I could have got the same bike for the same price (maybe a little cheaper) on interest free credit.

Incidently before anyone says I bent the rules, I first asked at the LBS if it was ok, then I asked my HR dept. Niether had any objections, whether they were ill informed or not I dont honestly know. But as far as im concerned, I checked and was told ok.

 

[MartinC]

And there's the root of the problem. The rules have not changed, these are the rules as they have always been written - no pre-agreed sale price and the sale must be at market value.

People have bent the rules in the past and HMRC are wanting to drag it back on track.

I think Norm summed it up here. But there are several things going on. HMRC have realised that people are getting a worthwhile benefit if they get a valuable bike for a nominal amount at the end of the agreement and they want their cut - you pay tax on the difference between the full market value and what you pay.

I guess Cyclescheme can see an opportunity here. If HMRC get stricter about the disposal of the bike then employers will be motivated to take up their offer to manage this (see Panter's post a long way back). Cyclescheme would be paid to acquire bikes at knockdown prices (rather than the employee) and make money selling them on - hopefully to the employee. They need to be careful - they could end up with a load of bikes to sell on ebay and no more take up when employees don't see Cyclescheme administrated schemes as worth bothering with.

To be honest the scheme was never going to do what it was intended too - get new people commuting by bike but was just a way for existing cyclists, retailers and employers to get some benefit at HMRC's expense. There was little benefit to anyone getting a cheap bike on the scheme. Encouraging newbies to get a BSO to try commuting seems unlikely to to have any long term benefit in my view, more likely to put them off for ever. I suppose you could argue that it was encouraging cycling in a wider sense and that was of benefit to the country in general. I have seen several several colleagues become cyclists and regular cycle commuters on the back of getting expensive bikes on the scheme (and a big discount 'cos of their higher rate income tax).

It seems of even less use now. If HMRC get picky and Cyclescheme get greedy then employers and employees just won't bother with it. Maybe that's the intention - let it wither away and then scrap it 'cos it's not used. It's a bit like cycling farcilities in general - just for show.

 

[MartinC]

..and the scheme isn't aimed at "new" cyclists per se at all, it's aimed at encouraging more cycling to work full stop. for the new cyclist that *could* mean a £250 bike, for a keen leisure cyclist that could mean a fairly expensive winter/commuting bike that they don't mind mudguarding and racking up for a year 'round commute.

for someone who uses train or bus + bike, Brompton is where it's at (to the extent that some companies' regulations are written to exclude other types of folder) and they're not cheap.

Good points. A few years back one of my colleagues, an Audax rider, got a folder on the scheme to change his mainly car/occasional bike commute to a folder/train commute 'cos he didn't want to do the full distance every day.

 

[summerdays]

I guess Cyclescheme can see an opportunity here. If HMRC get stricter about the disposal of the bike then employers will be motivated to take up their offer to manage this (see Panter's post a long way back). Cyclescheme would be paid to acquire bikes at knockdown prices (rather than the employee) and make money selling them on - hopefully to the employee. They need to be careful - they could end up with a load of bikes to sell on ebay and no more take up when employees don't see Cyclescheme administrated schemes as worth bothering with.

I too think Cyclescheme have seen a way to make more money - and promoting to employers that they will take the hassle out of their hands.

To be honest the scheme was never going to do what it was intended too - get new people commuting by bike but was just a way for existing cyclists, retailers and employers to get some benefit at HMRC's expense.

Still disagree - Mr Summerdays started cycling to work after acquiring a bike on the Bike to Work scheme. Not saying that's lots of commuters haven't benefited as well.

 

[MartinC]

Still disagree - Mr Summerdays started cycling to work after acquiring a bike on the Bike to Work scheme. Not saying that's lots of commuters haven't benefited as well.

I think you're right - I was being too negative.

 

[Stephen-D]

What if, i got £1000 voucher but my bike cost me £2500 which i paid for the rest myself, and when it comes to value the "Fair" market price is 5% of that bike, that means costing me more does it not?

 

[Norm]

I think more people are seeing why I wrote a few months back that everyone should encourage their employer to steer clear of Cyclescheme.

To be honest the scheme was never going to do what it was intended too - get new people commuting by bike...

The only reason I commuted by bike was that I was able to use the C2W scheme to buy the bike in the first place. There's no way I would have got the road bike without the C2W scheme.

What if, i got £1000 voucher but my bike cost me £2500 which i paid for the rest myself, and when it comes to value the "Fair" market price is 5% of that bike, that means costing me more does it not?

As I've said a couple of times, tough. The bike belongs to the employer, if you gave them £1,500 without realising the implications, then more fool you.

 

[Stephen-D]

Wow that does sound pretty crazy Norm, im really glad i didnt do that but its intereseting to know, i went for £1000 with my work! im only 4 months into it so i will see if any new changes will affect me.

 

[potsy]

My friend just got a Sirrus Elite on the bike to work scheme,he says the bike is far too nice to commute on so is using his old one

 

[Soltydog]

HMRC don't really care about the value used to transfer the asset. The care about the tax in relation the asset transfer - from the HMRC website

If a cycle is transferred to an employee at a nominal value (say 5 to 10% of the original retail price), then if the market value is higher, the employee will be taxable on the difference.

This says to me that the employer can transfer the asset at whatever value they choose providing the tax on the full market value is collect. This seems the contradict the implementation guidance provide on the DfT website.

If you have maintained the bike at your cost over the 12 or 18 month lease period, ie lubes, tyres, etc then surely these costs can be offset against any tax in the difference between valuation & final payment

 

[PrettyboyTim]

If you don't like the amount they're asking to transfer ownership, leave the bike in reception. They may find they wish to offset some of that amount for you to handle 'disposal' for them...