Perhaps the scheme providers haven't explained themselves properly - the deal always was that your payments were rental, not installments. That was made very clear in the legislation.
No, it wasn't. There is a difference between "legislation" and the scheme conditions. Legislation was created by the government to initiate the scheme. Terms & conditions laid down by the schemes are not government policy.
The scheme providers are deliberately muddying the waters on this. Hardly anybody I speak to understands the difference between the government legislation and the conditions added in by the schemes. The schemes themselves have even set up a lobbying group to pressure HMRC for more leverage in order to screw the last penny out of the ruling.
The salary sacrifice scheme was included to help employers recover the cost of their outlay to run the scheme. It wasn't intended as "rental", it was intended to help employers recoup costs and encourage them to participate. Under this situation the employee had the use of a bike for a reduced outlay, the employer provided a benefit for their staff, and the government made a magnanimous gesture in order to encourage healthier living and sustainable transport.
The scheme providers got involved to run the scheme for large organisations, and charged a fee to do so. Fair enough. The schemes were paid their fees, the companies recovered their costs, the employees had access to their bikes. When the inland revenue made their judgement on fair value it was intended to tidy up a loophole on transferring ownership (in keeping with the tight BIK laws we have in the UK), to ensure that assets weren't being transferred below market value.
In a company-run scheme this isn't much of a problem. The company owns the bike and has recouped all of their outlay, the employee continues to use the bike, everybody is happy. No further money changes hands.
Where the schemes are involved they are exploiting the fact that they own the bike on paper (despite being in receipt of full payment plus an administration fee) and issuing ultimatums like the one in the OP.
There is no option to keep the bike, despite it being paid for in full. Instead they will take it back and sell it, force the employee to pay £315 for it, or in a magnanimous gesture they will allow him to rent a bike he has already paid for, for £105 over 3 years. They have just discovered a great way to screw people out of more money whilst threatening them with Inland Revenue rulings.
