Another thread sorry

I have just finished paying for the my cycle2work purchase. Accounts have said they don`t want it and it is mine.
Do i need to get this in writing?
And can you only do this once, if not often can you use the C2W scheme.

TA

No, you need to pay a final valuation fee, as it still has a residual value.

Technically you’ve leased it for the last year, the company stills own it. If they ‘give’ it to you then you’re receiving a benefit without paying tax on it

It’s either 3% below £500 or 7% above it

So to clarify, if the company gifts it to you, you have received a benefit in kind (on your P11D) based on the “Fair market value” which is worked out as

18% of original price if under £500, or
25% of price if over £500

so for a £1k bike the benefit in kind is £250 so you pay income tax on that value at your tax rate and is usually built into your PAYE code.

(looking back I’m not sure that’s all that clear to get accross though!)

Once one contract is ended, you can start a new one (as long as work are okay with that)

Surely if he just ‘holds onto it for the company’ its value will drop to zero pretty quickly though? And thus he’ll be doing them a favour by disposing of waste in an environmentally friendly manner?

It sounds like a locally run scheme. The accoutants show know the best way to deal with it

Most big companies outsource the whole scheme to make it easier to adminster

the 3% and 7% I quoted are the market values when it’s worth the least – https://www.cyclescheme.co.uk/employers/employer-updates/hmrc-update

So you pay 3%/7% and agree to hand it back at the end of that period (3 years after the first 12 months is up). By which point the company has written it off and will just forget about it

In simple terms there are 3 options once the monthly payments have stopped:

1. Pay a one off payment to own the bike
2. Pay a smaller one off payment to continue to lease the bike for a further three years at which point for HMRC purposes it has been written down to zero
3. Return the bike to the company as it is still technically theirs, although I’ve never heard of anyone doing this.

You should have been given all of the info on the above by the scheme’s administrators.

If you continue to keep the bike without making any further payment you will be liable for tax on a benefit in kind.

Sound like your accounts department don’t fully understand the scheme. Go back to the scheme administrators or whoever gave you the voucher in the first place.