Downward
Guru
- Location
- West Midlands
Hi- We use Cyclescheme at the moment but I know we are looking at changing supplier - Would this be wise given the HMRC stance on the 5% valuation ??
Found this.
A number of the cycle scheme agreements we have seen suggest that at the end of the
hire agreement, the cycle can be sold to the employee for a notional amount. For
example, some documentation seems to imply that even £1,000 worth of cycles and
cycling equipment will have a negligible value after 18 months. This is misleading and
is certainly not a view shared by HMRC. So be warned: there are no special
arrangements or tax concessions covering this eventuality, and normal tax rules apply.
If the employee buys the cycle for less than its market value, the difference is liable to
tax and attracts employer’s Class 1A NICs. HMRC take the view that each cycle must
be valued at the time of sale.
Found this.
A number of the cycle scheme agreements we have seen suggest that at the end of the
hire agreement, the cycle can be sold to the employee for a notional amount. For
example, some documentation seems to imply that even £1,000 worth of cycles and
cycling equipment will have a negligible value after 18 months. This is misleading and
is certainly not a view shared by HMRC. So be warned: there are no special
arrangements or tax concessions covering this eventuality, and normal tax rules apply.
If the employee buys the cycle for less than its market value, the difference is liable to
tax and attracts employer’s Class 1A NICs. HMRC take the view that each cycle must
be valued at the time of sale.