The Death of Cycle to Work?

[Norm]

no doubt HMRC will have a breakdown of the types and numbers of bikes bough on the scheme.
Carbon fibre race machines vs commuters

I don't think that they'd have a full analysis. Whilst the large intermediaries, such as CycleScheme, will probably keep and provide details, they will have no way of gathering information about some of the purchases made.

I think trying to stop people buying 2 grand weekend bikes is pointless

You shouldn't be able to but a £2k bike on the scheme as it is currently set up, unless your employer already has a credit licence. One of the reasons that I like the current £1k limit is that it allows a decent "commuter" bike for those who do cycle for some distance. If the limit was, say, £200, you'd struggle to get a scoot you'd want to ride daily on a 20 mile commute.

 

[GrasB]

You shouldn't be able to but a £2k bike on the scheme as it is currently set up, unless your employer already has a credit licence.

The scheme allows for a 2k budget, sure your employer may not allow you to go over 1k (mine does) but C2W allows for 2k. Lets face it even at 1k you can still get a decent road bike that'd be a useful tool in a race.

 

[Norm]

Do you want to point out where the scheme sets that budget limit?

I'll help you by posting (yet again) the wording from the DfT's guidance notes...

3. What value of equipment can be supplied?
There is no limit on the total value of the equipment including the cycle. It is possible to loan two cycles to one employee if, for example, that employee needed a cycle at either end of a train journey between their home and place of work. (However, please see Section 9.1 where the Office of Fair Trading (OFT) has advised that the group consumer credit licence will cover schemes up to a value of £1,000.)

And

9.1 Consumer Credit Licence
Any employer entering into the scheme will need the cover of a consumer credit licence. In order to facilitate the scheme the OFT has issued a group consumer credit licence designed to cover employers setting up Cycle to Work schemes so that employers need not apply individually for credit licences for this purpose. Employers will be covered by the group licence so long as they are undertaking activities within its terms. The group licence covers only consumer hire business, (not the making of hire-purchase agreements – see below) for the purpose of providing employees with bicycles and or bicycle equipment up to the value of £1000, including VAT and not taking into account any income tax exemption under an employee benefit scheme, that is, the market price the employer pays or seeks to recover from the employee by way of hire charges.
If employers also undertake regulated business other than that described in the group licence or wish to offer packages in excess of £1000, they will need to obtain a standard licence to cover that business. The Cycle to Work Group Credit Licence can be seen at http://www.oft.gov.uk/Business/licence/group.htm

 

[GrasB]

Sorry where did I say the upper limit was 2k? I just mentioned the C2W scheme allows for a 2k budget because that's what our personnel division limits you to, anything over 2k is a registered asset which produces a s**t load of internal paper work, I don't give 2 hoots if another company allows for 100k. The point is you can buy a 2 grand bike through C2W & there's very little point in trying to stop people buying weekend bikes. It'd be a much better idea to spec a minimum usage requirement than trying to weed out people who are buying a new best bike.

 

[Norm]

Sorry where did I say the upper limit was 2k?

That would be the first line of this post...

The scheme allows for a 2k budget, sure your employer may not allow you to go over 1k (mine does) but C2W allows for 2k.

As I said originally, you can only go over the £1k limit and keep within the rules if you have a consumer credit licence. There are very few companies (banks and other financial institutions) which will have one of those, thus, the £1k blanket limit applies to most and very few can buy a £2k bike on the scheme.

 

[GrasB]

I'm still not seeing where I said a 2k limit, I said allowed for a 2k budget. There's a difference between allowing for a 2k budget & a spending limit. For instance I could have £10k purchase budget for a years consumables but have spending limit of £50k. Anyway are you deliberately trying to ignore the issue by being pedantic (a task you're managing to fail at btw)?

The issue is if you have a reasonable spend limit for a good bike people are going to try & use it for their own gains. Now you can put in reasonable minimum requirements but in essence if the scheme is going to make people fundamentally less well off long term then it should be scraped.

 

[Browser]

The objective of the scheme was to encourage new cycle commuters, not finance the weekend cycling of regular cyclists. My observation of the people i kow who have bought on the scheme is that the vast majority fall into the latter category.

Whilst I fully agree with you, I don't think there are any stipulations or limitations in the regs regarding what type of bike you buy, so if there were such a mentalist out there, they could have blown £750 on one of these . I would imagine that any representative of HMRC would merely say that the subject of this thread was all in the regulations from the start and wasn't applied properly.
I'd like to know why the 5% nominal fee came into being, as it seems awfully suspicious that so many companies seem to have done the same sort of thing independantly from each other. I'd like to hazard a guess that somewhere in the guidance issued to potential scheme members, there was a line about nominal fee or 5% or something, otherwise they knew that people wioth half a brain (that doesn't include me by the way, as Norm has discovered!) would realise that it was another scam purporting to help people and would run a country mile from it.

 

[Norm]

I'm still not seeing where I said a 2k limit, I said allowed for a 2k budget. There's a difference between allowing for a 2k budget & a spending limit.

Not to me there isn't. If someone set a £2k budget, I'd consider that to be the limit of what could be spent. Discussing your ambiguity is semantics, anyway, my point was that the scheme limits you to £2k unless your employer has the appropriate credit licence. I hope that your employer does have the credit licence, BTW, or Mr Taxman isn't going to be very happy.

Anyway, to reiterate, I suggest that, for the vast majority of people, that sets the effective limit at £1k.

Anyway are you deliberately trying to ignore the issue by being pedantic (a task you're managing to fail at btw)?

I agree that I did fail to ignore your point, as I addressed it in my first response. I wrote that "One of the reasons that I like the current £1k limit is that it allows a decent "commuter" bike for those who do cycle for some distance. If the limit was, say, £200, you'd struggle to get a scoot you'd want to ride daily on a 20 mile commute."

 

[currystomper]

Hi

I brought my folding bike on CtW - If it hadn't been for the scheme I would brought a cheaper folder!!

As to market value at the end of the hire period - is it the market value to the company (employer) that purchased the bike? - given the paper work and man power time to sell a second hand bike I would have thought that the bike was negative equity to the company.

What would the company have to do??
1) receive back the bike ( time)
2) store the bike (time and money)
3) service the bike (so they don't get sued for selling shoddy goods!)
4) advertise (time and money)
5) deliver to new owner.
....doesn't sound like much of a money spinner to me - if it was more cycle shops would sell 2nd hand bikes!!


CS

 

[Vikeonabike]

This is probably why Cambridgeshire Constabulary are not running the scheme this year.....mind you after a year of use with very little in the way of maintenace my Paddy wagon is only worth a fiver now....LOL

 

[Black knight]

Anybody had confirmation of how the final value will be determined?
Hoping to join the scheme for the first time this year.

Thanks

 

[RRCC]

Anybody had confirmation of how the final value will be determined?
Hoping to join the scheme for the first time this year.

Thanks

The latest news from my civil service employer is:

Apparently, the Treasury is working up a valuation matrix for the final payment, so they (the Treasury) seem to be going ahead with the changes to the cycle purchase scheme. I'm not sure at this stage whether or not [employer] will implement a simple loan scheme - I hope they do

 

[jimboalee]

Our ( Jaguar Land Rover ) C2W scheme never existed.

In about April, the company who market LR liveried bikes have a 'sell off'.

Most bikes are offered at half price.

There is no limit to the number of bikes each employee can purchase, and no minimum limit to the duration of 'first ownership'.

In effect, I could have bought half a dozen bikes and sold them on with a minimal 'administration fee' to CycleChat participants.

Mine is glorious.

The big 'fly in the ointment' is that they are MTBs and need to be 'slicked up' for commuting purposes. This adds £60 immediately.

 

[benb]

Mine has a limit of 1k, but you are allowed to buy two bikes if you want.
The wording on our intranet about it says that the final FMV payment is "generally" set at 2.5%

So who knows?

 

[Jezston]

My employers are getting concerned about this too - it is still very unclear as to WHO does the final valuation. Apparently any shop that is on the scheme (regardless of whether it is the shop you purchased it from) is not allowed to do the valuation, due to potential conflict of interest. They have asked if any member of staff can get some kind of qualification to allow them to do the valuation, but of course there is no qualification on bicycle maintainance.

If the scheme providers themselves do the valuation, there is of course a SERIOUS conflict of interest there! These companies are not non-profit government subsidarys, they are for-profit private companies. What's to stop them saying your £400 bike is now worth £1000 hand over the cash or the bike matey?