Cyclescheme bicycle condition assessment

[Bromptonaut]

There is an easy solution, the employer can continue to loan the bike to the employee for free

That's exactly what I'm doing; letting it depreciate on their books. But even then I doubt a 3yo Brompton M6R will be valued at £20.

Suspect this scheme was set up by DfT with enthusiastic support of a then minister. Subsequent changes under prev administration lessened that support and no immediate sign that ConDem have revived it.

HMRC therefor free to move in & kill off something that was always seen as infringing their territory.

 

[Riding in Circles]

That's exactly what I'm doing; letting it depreciate on their books. But even then I doubt a 3yo Brompton M6R will be valued at £20.

Suspect this scheme was set up by DfT with enthusiastic support of a then minister. Subsequent changes under prev administration lessened that support and no immediate sign that ConDem have revived it.

HMRC therefor free to move in & kill off something that was always seen as infringing their territory.

HMRC did whinge about it from the start so I suspect you are correct.

 

[DrSquirrel]

The government set up this scheme and basically suggests that you can buy it.

But they're (companies) are not allowed to suggest this else it would be hire purchase.

Why couldn't the government just setup this scheme so it could be sold at the end regardless, isn't that the point of the scheme anyway. It just seems like we are using a loophole that is already there (yes I know this isn't entirely true).

I would just ask the shop to try and mark it a bit lower.

Or just avoid cyclescheme.co.uk all together.

Or keep it on the employer for as long as possible for free (as others have mentioned) so it depreciates. (which isn't always an option with cyclescheme apparently, or isn't default).


Moral of the story - cyclescheme(.co.uk) is pants.

 

[sheva]

My C2W finished two weeks ago (not cyclescheme) and my employer has simply stopped taking any payment but has not yet made any suggestions about what happens next.

 

[Downward]

Mine is up again in about a month via Cyclescheme so will be interesting to see what happens.

I won't be taking it to a LBS though to get it assessed as it's at my time and my expense.

 

[summerdays]

Mine is up again in about a month via Cyclescheme so will be interesting to see what happens.

I won't be taking it to a LBS though to get it assessed as it's at my time and my expense.

So you would rather that Cyclescheme assessed it's value - its in their interests to assess it's value as high as possible I would presume - whereas at least the bike shop don't have a vested interest in keeping the value high.

 

[Norm]

If what people are writing here is correct (and there's a big "if") I can't believe, or understand, how many companies have outsourced the whole thing to cyclescheme. And, even worst, they have sold the bikes to cyclescheme.

Prime way to turn an incentive into a disincentive, IMO.

 

[DrSquirrel]

If what people are writing here is correct (and there's a big "if") I can't believe, or understand, how many companies have outsourced the whole thing to cyclescheme. And, even worst, they have sold the bikes to cyclescheme.

Prime way to turn an incentive into a disincentive, IMO.

Makes the whole thing more complicated than just doing it your(company)self too.

 

[Downward]

After talking to Cyclescheme many times (we are tendering for new Cycle 2 work scheme) there is no way they are going to start charging full market value for the bikes at the end of the loan scheme because as they say they wouldn't last 18 months.

 

[Norm]

...(we are tendering for new Cycle 2 work scheme)....

Save your company time, effort and money - go DIY.

 

[Joseph]

After talking to Cyclescheme many times (we are tendering for new Cycle 2 work scheme) there is no way they are going to start charging full market value for the bikes at the end of the loan scheme because as they say they wouldn't last 18 months.

Well if they're not then there's tax to be paid on the difference between full market value and what the bike gets sold to you for and the under-value transaction will have to be reported as a benefit on the employees P11D.... (assuming ownership is transferred to the employee at the end of the lease period)

[see http://www.hmrc.gov.uk/manuals/eimanual/EIM21667.htm ]

As other folks have said, the simplest path seems to be to leave ownership in the company and continue to lend the bike to the employee tax free.

 

[GrasB]

After talking to Cyclescheme many times (we are tendering for new Cycle 2 work scheme) there is no way they are going to start charging full market value for the bikes at the end of the loan scheme because as they say they wouldn't last 18 months.

Well if they're not then there's tax to be paid on the difference between full market value and what the bike gets sold to you for and the under-value transaction will have to be reported as a benefit on the employees P11D.... (assuming ownership is transferred to the employee at the end of the lease period)

[see http://www.hmrc.gov.uk/manuals/eimanual/EIM21667.htm ]

As other folks have said, the simplest path seems to be to leave ownership in the company and continue to lend the bike to the employee tax free.

When I sold my rallying Cinq I had 2 options
1) sell it for about £1500-£2000 & get a buyer fairly quickly.
2) be patient & wait but get about £3500-£4000.
I had many offers around the the lower 'quick sale' mark because they wanted it as a road car but I held out for 7 months to sell it at my full asking price to a buyer who fully understood what I had done to the car. So which was the full market value? Both really, the first was the value someone in the modded car market would pay for a rally-esque car, the other was the value to someone who wanted a fully preped class legal rally car.

The same thing with cyclescheme, they've got to store & sell the bikes on, so sure they could get more money for them but how long will they have to store those bikes, advertise them etc.? Do they charge a lower value for a quick sale & realise an instant monetary value for the bike or maximise the value of that asset but sit on it for months before they sell it with all the costs that are involved? If they say that they'd go under in 18 months if they did offer the bike as 'full market value' then that value is basically a load of hype!

 

[Joseph]

The same thing with cyclescheme, they've got to store & sell the bikes on, so sure they could get more money for them but how long will they have to store those bikes, advertise them etc.? Do they charge a lower value for a quick sale & realise an instant monetary value for the bike or maximise the value of that asset but sit on it for months before they sell it with all the costs that are involved? If they say that they'd go under in 18 months if they did offer the bike as 'full market value' then that value is basically a load of hype!

I don't think anyone has suggested they should value them on the basis of the absolute maximal achievable sale price. A reasonable definition of 'market value' is the value that can be achieved by selling it in the short term. ebay or what second hand dealers are selling them for would provide some guidance.

It is going to depend on the type of bike of course, but I'd imagine most of the bikes going through the cycle schemes are mass produced models, hence it should be relatively simple to determine a "fair" market price. But "give it to me for a tenner as otherwise you'll have to pay someone else to dispose of it" is clearly not going to go down well with any HMRC inspector - equally from what I remember HMRC have indicated that selling all the bikes at a fixed 5% or 10% of original price is not acceptable.

(And any statement from cyclescheme that they're not going to charge market value is clearly going to grab some attention from HMRC!)

 

[Downward]

Well as Cyclescheme is just office based to take physical ownership of the bikes would mean them investing in secure storage and arranging collection of thousands of bikes from thousands of locations (esp as most users are councils, hospitals which trying to find a in person is very difficult).



Would anyone know how much it would be to hire a vehicle and driver to transport cycles ?

I know 4000 fully loaded pallets is about £20k


They offer 2 options, You buy it or you pay for it to be disposed off.

Why would they suddenly charge full market value when they have made their 10% at the point of sale ?
£100 per £1000 worth of sales ain't a bad profit for a bit of paperwork.

Even if they charge 10% for Market Value then they are creaming 20% per sale.

 

[Joseph]

Well as Cyclescheme is just office based to take physical ownership of the bikes would mean them investing in secure storage and arranging collection of thousands of bikes from thousands of locations (esp as most users are councils, hospitals which trying to find a in person is very difficult).

I'd imagine their are plenty of firms around who would offer to take care of all that for cycle scheme.

Why would they suddenly charge full market value when they have made their 10% at the point of sale ?

Yes, it's completely common for directors of companies to give away potential profit just out of the goodness of their hearts. Absolutely zero companies are run by money grabbing immoral almost-liars.

More to the point, if you don't pay a fair market value, HMRC can come and tax you on the difference between what you paid and a fair market value - iirc this would also result in a fine for the company if they failed to report it on the P11D.