The Death of Cycle to Work?

RRCC

Veteran
Posted on our BUG board:

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.
If this happens the reduced tax savings and increased operating costs will kill the scheme.
 

Sailorchick

New Member
Location
Southampton
Glad I got my voucher just in time then. Voucher arrived 2 days ago, picking up new bike next Friday.
 

PK99

Legendary Member
Location
SW19
RRCC said:
Posted on our BUG board:
If this happens the reduced tax savings and increased operating costs will kill the scheme.

Looks like HMRC have cottoned on to the fact that large numbers of people have been buying extra bikes or bikes that never see a journey to work.

I know of people who openly talk about having had several and what a "good earner" it was, and others turning up on club runs on their £1000 carbon bike-scheme steed while using their old hack bike for commuting.

As so often with such things, abuse by people for whom the scheme was not intended destroys the benefit to those for whom it was.
 
Sadly I believe ours will close to. But not because of rule changes. It would seem that our H&S officer is concerned about the amount of cycling related injuries.
Its hard to check his claims as our workforce are spread across around 20 locations. But I have to say I have not heard of any unusual increase in accident or injury.
 

summerdays

Cycling in the sun
Location
Bristol
addictfreak said:
Sadly I believe ours will close to. But not because of rule changes. It would seem that our H&S officer is concerned about the amount of cycling related injuries.
Its hard to check his claims as our workforce are spread across around 20 locations. But I have to say I have not heard of any unusual increase in accident or injury.
Surely the injury rate will continue at approximately the same rate with or without the scheme.
 

Vidor06

Long term loafer
I work for a Government Department in NI and Cycle to Work has only been trialled in one other Dept so far. So I have been waiting patiently for the trial to be rolled out to the others but it looks like it will never happen now.
 

Norm

Guest
Would anyone care to venture what the changes are between this and the current legal requirements?
 
C

chillyuk

Guest
Strikes me that the scheme has pushed up prices as people have more spending power thanks to the scheme. The same has happened with vets. As more people have insurance so the vets are happy to increase their prices, assuming the insuance company will cough up. Back to the bikes, cycling is moving out of the reach of many people. Hundreds of pounds for very basic bike, over a grand for something half way decent. I know many will disagree, but I think it is just a rip off. As long as people with more money than sense go waving their wallets around so the prices will continue to rise. We need some consumer resistance, but that's not British is it?
 
I have spoken at length with our Dir of Finance about the companies C2W scheme and the impact the HMRC proposals are going to have. He and the MD are very pro C2W althrough neither have taken up the opportunity to convert from running to cycling. The company had showers installed and allow us to use space for secure bike storage.

The Dir of Finance has stated that he has seen a substantial change in HMRC's attitude towards businesses, charities, taxation and all other associated matters. I quote "They have become real money grabbing b@st@rds" HMRC where always money grabbing but they appear to be focused on closing every loophole they can find and HMRC view is the C2W scheme as just that, another tax avoidance scheme.

It matters not that the scheme promotes health, helps the enviroment, ensures that small business can survive HMRC are only concerned in recovering the revenue lost.

Our Dir of Finance has already suspended the scheme until further notice and given the HMRC's proposal I have to support his action.
 

GrumpyGregry

Here for rides.
RRCC said:
If this happens the reduced tax savings and increased operating costs will kill the scheme.
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 is illegal under the terms of the scheme to know what the final figure will be in advance. If you know what you are going to have to pay in settlement at the end then it isn't a hire agreement in law it is a contract to purchase and, as such, does not qualify for tax relief or remission of NI.
 
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