smokeysmoo
Legendary Member
- Location
- Bolton, not very far from Nob End
It might be worth re-visiting then. I'll have a proper look into it myself, but I don't hold out much hope when I pitch it to the
End of My First Cycle2Work Scheme
- Thread starter BSRU
- Start date
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I work in finance, and I implemented our scheme, so if you need any help or advice then just let me know... i.e. I had to write a paper to support which company I chose and to explain the finance commitments etc so I'm sure I could share an edited version or give you any pointers if required.
The reason this can't happen is that the company's agreement with Cyclescheme is that they hand ownership of the bike to Cyclescheme at the end of the initial agreement. Effectively you pay cost price for the bike and then have to pay an additional 7% to Cyclescheme, who have already had 10% of the price from the dealer.Or Option 4, have the outstanding value taken off your Tax Code, where you will pay 40% of the £250 owed
You need HM Revenue and Customs form P11D
If only companies would realise that if they wrote cheques directly to bike shops rather than to Cyclescheme, it would be more beneficial for both the company and the employees.
NotthatJasonKenny
Faster on HFLC
- Location
- Bolton
Ouch! That's quite a fair comparison! Maybe we should pitch it to HO? I get on fairly well with the main man who would make the decision! Should be good PR in a group decision!
Removing Cyclescam from the whole process would be beneficial for both the company and the employees. Setting up your own scheme is easy and administering it is even easier without the a third party taking profits from both the bike shop and the employee.
smokeysmoo
Legendary Member
- Location
- Bolton, not very far from Nob End
I'll leave that in your capable hands then Mr K, I smell n+1 on the horizon
MontyVeda
a short-tempered ill-controlled small-minded troll
- Location
- Lancaster... the little city.
Last years Cycle2Work scheme has ended and they have given me three options.
1) 7% of original value, £70 to hire it for three more years then take ownership of it.
2) 25% of original value, £250 to take ownership now
3) Return it at my expense.
For me it is a no brainer, option 1.
I'm completely confuddled now...
I thought the company put up the funding for the bike and the employee pays the amount back out of their wages each month. So a £1000 bike / 12 months = £83.33p each month ... but obviously I'm missing something. How come they still own the bike that you've spent all year paying for???
Your scheme might be like that but the precise details of the set up and management of the schemes is down to employers.
However, one confusion that you do have is that the payments are rental payments. That is critical to the scheme being accepted by HMRC, it must be set up as a rental scheme. If it is set up as a hire purchase scheme and ownership transfers automatically, then it does not comply with the cycle to work scheme regs.
NotthatJasonKenny
Faster on HFLC
- Location
- Bolton
I've looked into it a bit, it's to do with a consumer credit licence, if they are repayments or the original amount is anything over £1000 it becomes finance. You have to pay the final value out of your wages which I think is set by your employers. Wonder how that will effect us as we have a ccl.
The HMRC have produced a fair market value table which states how much your bike is worth depending on how old it is and what the original value was. Your employer can sell you the bike for whatever they want once the hire period has finished (even nothing). The key is that the difference between the fair market value and what you were charged becomes a taxable benefit. The solution is therefore to either extend the hire period so that by the time ownership is transferred the value is nominal, or get your employers to sell you the bike for as little as possible, thereby incurring only the small tax liability on top of the purchase fee.
If your company has a CCL, then it means that if it chooses to, your company can hire you a bike that has a value greater than £1k. It would still have to be run as a hire agreement though for you to benefit from the tax savings.
Just as a slight addtion to this, bear in mind that you should be prepared for HMRC to show a little more interest in you if this does happen as you'll be receiving significant tax savings if you hire a bike that has a value significantly greater than £1k... Their attitude may be to question whether anyone does really need to spend that sort of money on a simple commuter?
Obviously the answer to that is yes, but they're not as knowledgable as us on these matters!
