cyclescheme options

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srj10

Guru
Location
greenock
just finished my hire period and now have 3 options to choose from :return bike,pay lump sum and keep bike or pay £45 and hire bike for further 36months.third option seems best but not sure what happens after 36months,cyclescheme state i may be offered ownership of the bike at this time at their discretion,which sounds a bit vague.any advice please
 

MrGrumpy

Huge Member
Location
Fly Fifer
I think the idea is that the third option will mean come the end of the 36 months the bike is worth nothing in tax purposes and you keep it for free! My scheme is different in that after 18 months I pay a quid and the bike is mine and the 21% fair market value is taxable to me.
 
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User33236

Guest
Option 3 of paying £45 and extending for 36 months is their way of getting round the high payments required by the HMRC based of residual market value of the bike at you are paying an amount based on a four year old bike (which it will be by the time you get ownership).

Whilst Cyclescheme state

"In order to preserve the tax benefits of the scheme, there can be no guarantee or obligation to transfer ownership to the employee immediately after the hire period has ended. However, employers generally choose to offer this option, either directly or via Cyclescheme."

I know of no-one who has not been given ownership of the bike at the end of the period therefore this statement is likely just to keep the HMRC happy.
 

mk6golf

Well-Known Member
Location
Ipswich, Suffolk
I got so confused with all of this and in the end just bought a bike on a 0% credit card for 18 months. Good scheme I'm sure in principal but seems god dam complicated :sad:
 

MrGrumpy

Huge Member
Location
Fly Fifer
There can be too many variations, which you may not be aware off and then get hit with the options above, however this seems more common with Cyclescheme ?
 
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User33236

Guest
Cyclescheme have three options:-

1. Return the bike after 12 months
2. Pay 25% (assuming the bike was over £500) of the initial cost of the bike and take ownership of it
3. Pay 7% (again assuming the bike was over £500) of the initial cost of the bike to extend into a three year free hire period after which they will offer ownership of the bike, at their discretion, for no extra cost.
 
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OP
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srj10

Guru
Location
greenock
thanks for the replies,was too hasty in joining the scheme and didnt do my research.It's the statement "at their discretion " which concerns me.Will take option 1 and hope for the best.Won't use cyclescheme again unless my circumstances change.
 
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