I’m looking at the cycle to work scheme (using cyclescheme.co.uk) and I’m a little confused as to what happens at the end of the 12month period. The information I’ve got just says ‘at the end of the hire period cyclescheme will be in touch to let you know what your options are‘. What does this mean in practice, will I be expected to pay a final (crippling) fee to ‘own’ the bike or will I have to extend the hire period for a fee? Thanks.

They will be in touch – ignore the letter – you will get another one soon after saying the bike is yours and they have not charged you!

will I be expected to pay a final … fee to ‘own’ the bike

This most likely. Depends what they want to charge. My company charges something like 25% of the original value.

Isn’t worth it for me…seems cheaper to pick up last years bike in the sales.

Ignore the letter and get no charge is what has happen to me twice, my Wife once, and plenty of friends who took advantage of the scheme.. so speaking from experience here. in fact I dont personally know of anyone who has been charged the final fee if the first letter is ignored (advice from the Bike shop that organised it all).

I got charged for both of mine. First one was 5% which was fine, sold the bike for more than it cost me overall (it was actually a tad small), second time (and I can rant all day about this after they retrospectively applied the HMRC fair market value stuff to my agreement) got hit for a additional hire fee of around £60 for another 18 months (IIRC), or £250 to buy the bike. I gave in in the end and bought it then flogged it. I’d not bother again and use 0% from LBS instead.

This has just happened to me this week. I got an email with three options:
1. Extended hire period for 36 months for a refundable £70. After the 36 months the bike is yours and the £70 is refunded. This is the recommended option.
2. Pay a fee to own the bike. For me this was £250.
3. Return the bike.

It all happens from the email you’ll receive.

My only question is can you get a second bike on the scheme or is one your lot?

Two year gap between cycle to work “loans”?

Our current scheme is similar to the one above, but after 12 months you can transfer ownership of the bike from your employer to the scheme for a fee of £70ish, after another three years you can hand the bike back and get your £70 back or keep the bike and they keep the £70.
I’m still on our old scheme after 3 years I get to pay the tax on the Inland Revenue value for the bike ie the tax on £120.

My only question is can you get a second bike on the scheme or is one your lot?

You can get another bike but only once your old one has left the scheme though purchase/transfer or being handed back.

How do you prove a transfer? I’m guessing I can’t do it for at least 36 months since I’m on the extended lease.

I’m on the 36month extended lease now. Basically the bike is mine now, I paid about £40 to get it onto the extended lease.
If I sold it, no-one would know or indeed check up on it.

Interestingly enough, once I’d signed over to the extended lease, I got an email from Cyclescheme saying I could get another bike.

Company I work for could be bought out by another company soon, leading to redundancy, so it’ll be interesting to see if they bother trying to get the bike back at that point!

The more I hear about Cyclescheme the more I am stunned at how avaricious they are. If you are on an extended lease, the company still owns the bike – that is why it is a lease. You can’t buy another bike under the scheme until that lease is terminated, depending upon when it is terminated you will be assessed to tax on the amount by which the value of the bike (HMRC publish values that they won’t dispute – 25% of cost after one year) exceeds the amount you pay at the point of termination.

The above example where someone was charged 25% after one year is outrageous too – all that was needed was for them to pay the tax charge at their tax rate.

How do you prove transfer? All that is required is some correspondence confirming it.

Here’s the contents of their email:

As your hire period is nearly finished, we are contacting you to let you know what happens next.
You have been hiring the bicycle from blahblah Ltd for the past 12 and blahblah Ltd has agreed to transfer ownership of the bicycle to Cyclescheme once you have completed your hire period. We have also agreed with your employer to offer you our own convenient End of Hire process.
As you signed a hire agreement, with rental payments taken out of your gross salary, you have made a saving in tax and National Insurance (NI). In order to preserve these tax and NI savings and take ownership of the bicycle, a payment is required equivalent to the market value of the bicycle in line with HMRC’s valuation table. The valuation table can be found here.
We will shortly be in touch to offer you the following 3 options.
1. Cyclescheme’s Extended Use Agreement (EUA)
Pay a small, one-off, refundable deposit (3% or 7% of the equipment value) and continue to use the bicycle for an extended period of up to 36 months. There are no monthly rental payments during this period and you can participate in the scheme again if you wish.
At the end of this period, if you do not wish to keep the bicycle, we will refund the deposit in full. Cyclescheme may at its discretion, offer ownership of the bicycle to you at this point, and no further action or payment will be required if you wish to keep the bicycle.
This is Cyclescheme’s recommended option as this maximises the savings you have made and allows you to participate again. Please view our process video explaining this here.
2. Alternatively, you can take ownership of the bicycle for a much higher valuation.
3. Return the bicycle to us at your own cost.

I’m on my forth. Never been contacted after each years worth of payments. I just wait till the last of the payments go then apply for another. ie last years final payment went out in June, completed my forth application by the end of July…

Dezb – OK so they are being quite cute – the bike transfers to them so it is no longer owned by the employer, so you can enter into the scheme with the employer again. They obviously got some tax advice.

I work for HMRC, so our scheme you’d hope would be set up properly…

At the end of the period, cyclescheme wrote to me and offered me a couple of different fees to own the bike outright. I took the cheapest option.