Posted on our BUG board:
If this happens the reduced tax savings and increased operating costs will kill the scheme.The next purchase window, due April, is being postponed for a few weeks.
This is because Personnel are having to work on new proposals from HM Customs and Revenue.
For those currently in the cycle purchase, salary sacrifice scheme there are no changes, but for the future HMRC are proposing some marked changes which are disappointing, fiddlesome and most likely a strong disincentive to buying bikes under this system. HMRC are proposing changes to the final transfer of ownership bit. At the moment, it involves a one-off payment of £20 or 3% of the initial loan. For the future, HMRC want owners to make a statement as to the condition of their bike after the 18 months (this will either be 'good', 'fair', or 'poor'). The information would have to be collated by [employer] and sent back to [scheme operater] who would then ask Halfords or whoever to value the bike on that basis. So for example, a bike initially purchased for £1000 might end up being valued at £500. Clearly this is subjective, open to abuse, confrontation etc. Also, people would be entering a contract without knowing what the final purchase price might be, although it would be easy to imagine it being greater than £20 or 3%. It flies in the face of incentives to try to get more people cycling to work and clearly there's a huge number of very negative things about it all.