Salary Sacrifice for buying bikes

[amasidlover]

Not sure if this is the correct forum, but anyway... I have a small company and we provide bikes to employees free of charge - we don't take anything from their salary in return; this is exempt from being taxed as a benefit in kind (this document last page) and doesn't have any of the loan/hire nature (or upper spend limit) that cycle to work does.

Anyway, there is a consultation going on at the moment here, that suggests there will be changes to salary sacrifice schemes but that "cycles and cyclist’s safety equipment provided under the cycle to work scheme" will remain exempt. Later on it lists cycles and cyclists' safety equipment in a separate paragraph from cycle to work scheme.

What I can't completely figure out from the combination of documents is whether a) cycles provided FOC, i.e., not hired under cycle scheme will also be exempt or b) whether what we're doing is even salary sacrifice. My reading of the two documents is that our scheme is not a salary sacrifice scheme _and_ also that the first para of the consultation document is badly worded and cycles provided under cycle scheme or directly by the employer are both exempt from the proposed changes.

Does anyone have any more knowledge of these changes?

 

[biggs682]

cant help with giving you any answers @amasidlover

but it sounds a great idea , do all the staff use the bikes to commute on ?

 

[Dave7]

I cant comment on your case (insufficient knowledge) but having run a small company (5 employees) I can say with certainty.....if the barstewards can dind a way to tax/penalise you or the employees they will.
I would guess your kind hearted scheme will be judged 'payment in kind' or similar.

 

[Slick]

Talk to a good accountant. He's the guy or gal who has to justify it should any inspection come your way.

 

[Supersuperleeds]

What you are doing is not part of salary sacrifice so you don't need to worry.

 

[Flying Dodo]

What you are doing is not part of salary sacrifice so you don't need to worry.

Yup. It's not a cycle to work scheme either.

And as confirmed in the HMRC document referred to, provision of the bikes, as they're available to all, and assuming they're mainly used for commuting, is not a P11D benefit, so no tax is due.

 

[Specialeyes]

It will depend on who owns the bike, I think. Certainly that's what our accountant advised a couple of years ago when we introduced a similar scheme. If the bike belongs to the company and is lent to the employee, then it should be non-taxable as a benefit-in-kind. What would happen to a bike used by a particular employee if they left the company inside 3 years?

 

[amasidlover]

Thanks for all the response; the original scheme was checked and has no tax implication for employees (because the bikes are still owned by the company and used predominantly for work purposes) - it was whether the proposed changes in the consultation are going to impact it; and I think the answer is no.

And yes, both of the employees who've taken up the scheme commute by bike and the third who works in this office walks to work...

 

[ufkacbln]

Slightly OT

There is another aspect for older employees

A friend of ours went to town and bought a bike, phone and season ticket on Salary Sacrifice

Then because it is taken before taxation, it affected her taxable income and hence her pension

 

[ufkacbln]

In most cases it will affect your pension positively. We have a salary sacrifice pension scheme. As my employer is saving money by me using SS, they can afford to put a larger employers contribution in.

She was obviously unlucky then!