Shandy - reread you quote
which allows employers to loan cycles and cyclists’ safety equipment to employees as a tax-free benefit.
Bike Forum
Bike2work - cyclescheme woes
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Posted 5 months ago #
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TJ you said
it was a rental otherwise it would be a benefit in kind and taxable
The entire point of the legislation is that the use of the bike is a tax-free benefit. You can call it a loan or a rental or whatever makes you feel better but the scheme was specifically designed to exempt the use of bicycles from the BIK laws. That is still the case until the bike changes ownership.
The salary-sacrifice scheme was laid out purely to compensate the employer for their outlay. This is why the salary sacrifice payments are equal to the total outlay made by the employer. The schemes have taken advantage of this and turned it into an uncompetitive rental rate with a balloon payment on the end.
The people who are getting screwed out of this are employees of large organisations, particularly in the public sector. These employers won't commit big capital outlays to running their own schemes. They have to get the third-party providers involved, who then screw the employees.
In the meantime any employers who can commit the capital for a year are free to run the scheme, and allow their employees to continue to use the bike for as long as they like - no administration fee and no inflated payment on the end of the scheme.
Posted 5 months ago # -
I bought one when CS first came out, the exact T&Cs may have been in the fine print but the CS people came round in person and "explained" the system to us. All very vague on the final payment and the fact it was a loan was played down. Fortunatley done and dusted before the change of rules, just one more month usual payment. Wouldn't do it again.
Posted 5 months ago # -
The people who are getting screwed out of this are employees of large organisations,
...who enter into an undefined agreement of their own choosing, they are not being screwed
Posted 5 months ago # -
...who enter into an undefined agreement of their own choosing, they are not being screwed
missold then?Posted 5 months ago # -
...who enter into an undefined agreement of their own choosing, they are not being screwed
The ones who had their agreements changed halfway through by the Revenue ruling have been comprehensively screwed. Anybody who goes into a third-party scheme these days needs their head examined.
As I said, its unfortunate that employees of companies who run their own schemes are several hundred quid better off than employees who go through a third party.
Posted 5 months ago # -
Shandy - the agreement wasn't changed in any way shape or form. some companies had been undervalueig bikes at the end of the rental / loan period and the taxman issued new guidance to stop this.
Posted 5 months ago # -
Like i said, they were indefined and in essence open ended. Therefore change can happen.
Not arguing - just pointing out for balance.
We see hundreds of people a year who have no idea what the small print means or says for cyclescheme. The vast majority never enter the scheme once it has been explained clearly. The onus is on the individual to avail themselves of the information however vague it is. That vagueness should set off alarm bells for most.
Posted 5 months ago # -
Which allowed the schemes to try and squeeze an extra couple of hundred quid out of all of their users with threats of repossessing the bike.
Posted 5 months ago # -
It didn't 'allow' anything. It was always a gamble for the scheme user.
Plus, after all, it wasn't their bike to possess.
Posted 5 months ago # -
It raise the question of how / why are the lease "payments" effectively valuye of bike less tax savings and divided by 12?
because it was poorly setup.
In fact the whole c2w thing was poorly setup both in how it was sold, not that long ago that the major scheme providers, CS, Evans, Halfords etc were still touting the 40% saving tripe.. i mean 40% on what? no one would hire a bike for a year for the same as paying for one..
the initial twelve month thing came as a way of covering off the costs to employers and then t simply transfer the bike at the end to get it off the books... but the problem is that at the end of 12month the bikes sill have a decent residual value and that transfer becomes a BIK - but very few companies setup there scheme to do title transfer and them tax on residual value.
also lack of understanding about the scheme from employees and employers is also pretty poor.. that has got to be blamed on the scheme providers for the way they sold (sic) the scheme..
real shame as the intent was good...
Posted 5 months ago # -
The problem was, the rules dictated to qualify for the scheme you were not allowed to have an agreed right to buy the bike at the end.
It would have been perfectly legal for a company to charge you nothing to hire the bike for 12months then give it to you and you pay the tax on the BIK.
But this is not ideal from a companies point of view, unless its your own company
Posted 5 months ago # -
Update, I just had an email from Cyclescheme:
Thank you for your commit regarding the final payment if an employee leaves early, I have passed your message to management to advise this needs to be added.
Having looked deeper into ************ Ltd account, I can confirm that we have contacted you in error and you have paid a market value when leaving employment.
Please accept my apologises for any inconvenience this has caused you.
I win.
Posted 5 months ago # -
Boom. Worked out nicely in the end. Nice to be clear, I bet. I'm scot free after either 3 or four years, can't remember which. Not planning on going anywhere in that time, but if I do, I know there's a possibility of being asked for some cash and probability of them forgetting about it.
Posted 5 months ago # -
Please accept my apologises for any inconvenience this has caused you.
or in other words:
"I'm sorry we tried to shaft you for a significant amount of cash on the basis that we hadn't looked at your details properly (oh, riiiight!) and will now beat a hasty retreat as you appear to have cuaght us out."
Funkers!
Posted 5 months ago #
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