Viewing 33 posts - 1 through 33 (of 33 total)
  • Cycle2Work – Concerns over fair market value
  • MattPhotos
    Free Member

    OK,
    So I like the next person want to get a nice bike cheaply. But I am worried as with the scheme you are only renting the bike from your company and have to buy it at the end of the year for 'fair market value'.
    Now they claim that this will be almost scrap value due to the nature of a second hand bike, and I would agree with this if you buy a £400 bike. But if you buy a £1000 worth of bike and look after it, surely the market value at the end of the year will still be prohibitively expensive making the whole scheme actually save you very little money.
    Any experiences?

    BoardinBob
    Full Member

    HMRC guidelines state 5% of original value IIRC

    MattPhotos
    Free Member

    To establish the fair market price, employers should obtain quotes from local bike shops as the value of the bike will partly depend on the level of use

    Is what it reckons on the website for cycle2work.
    If it always just 5% then that is good news!

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    nbt
    Full Member

    Mine was 5%. I have heard of someon calling his bosses's bluff and refusing to buy the bike at the end, then getting a freebie: remember the bike might effectiovely be worth nothing to the company, what are they going to do with it if they don't sell it to you?

    fadda
    Full Member

    Can't claim personal experience, but I know 3 people who have used the scheme (2 different employers), and in all cases the final "buying the bike for fair market value" is deemed too costly to administer, so they never actually paid anything…

    thisisnotaspoon
    Free Member

    The above is correct, and if you employer did try to pull a fast one, send them an intemised bill for all the hours of labour it's taken to keep it in that condition. After all if it was truly being hired then the maintenance would be their responsibility surely?

    buzz-lightyear
    Free Member

    Got a £1000 voucher. Company sold it to me for £50.

    spacecadett
    Free Member

    I also had a voucher for £1000.00 and paid £50 + VAT

    MattPhotos
    Free Member

    thisisnotaspoon; that actually seems like a fair point. Inevitably you will need to have paid for things so I suppose that would be fair.

    It sounds like its pretty much 5% then. Not bad at all really. Seems like somewhere in the order of £350 off a boardman pro, not to mention the 0% finance for a year. You can't complain can you!

    jojoA1
    Free Member

    £35 here, on a £1000 voucher.

    clubber
    Free Member

    5% here too.

    dan1980
    Free Member

    thisisnotaspoon – Member

    The above is correct, and if you employer did try to pull a fast one, send them an intemised bill for all the hours of labour it's taken to keep it in that condition. After all if it was truly being hired then the maintenance would be their responsibility surely?

    I'm pretty sure the t&cs with mine state that I'm responsible for all maintenance and subsequent costs.

    Coleman
    Free Member

    When we set up our scheme HMRC vetted the documentation and requested we remove any reference to the approximate value of the bike at the end of the hire period and that 5% would not automatically be accepted. So theoretically this is a risky area. However, 5% has been accepted in many cases as a fair transfer value. If this is a problem your employer can continue to let you use the cycle without transferring ownership.

    flatback
    Free Member

    had a £1800 bike on scheme paid £25+vat for it after 12 months

    Coleman
    Free Member

    flatback – That' a great deal. Works out at 1.39%. Lets hope the IR don't do an audit! 😯

    grumm
    Free Member

    I didn't pay a penny for mine.

    andyfb78
    Free Member

    we have just had ours cancelled due to the IR telling us we had to get three independent quotes and take the average. This is how is should be done apparently. The powers that be are negotiating a change to the IR rules as most companies are in breach of the rules.

    Evans website is particularly vague on the subject deliberately i woukld guess.

    IR are due back in mid october, so hopefully we will find out then, but to be strictly within the rules you must get three independent bike shop quotes and take the average.
    I can see the shops charge for that quote, if they will do it at all….

    humpf… just had my bike nicked then they closed the scheme….

    Interestingly, my GF works for the home office, they haven't yet got the GOVERNMENT scheme…..

    TheFunkyMonkey
    Free Member

    So how much does it cost on the scheme?
    Eg a £1000 bike, what is the approx monthly cost? Is it over a year or 2 years?

    HoratioHufnagel
    Free Member

    what does it cost?
    1000 pound voucher costs 851 quid after tax which is 47.28 per month over 18 months out of your salary before tax.

    woffle
    Free Member

    £1 here on a £1000 voucher..

    s1m0n
    Free Member

    5% here on £750 voucher.

    Drac
    Full Member

    After all if it was truly being hired then the maintenance would be their responsibility surely?

    Of course not unless it's in the contract.

    flatback
    Free Member

    the rule used to expect it to be about 5% but that was not a rule, which is why some people like myself paid a very small amount to get the bike in the end, new rules state a quote from 3 bike shops, so as a rough guess £1000 bike on a scheme you are runing yourself, company knocks of vat and then your tax saving,you pay about £600 for a basic tax payer, use it for a year,local bike shop says its worth £400, 600 + 400 =1000and you havent saved anything, with the new rules??

    geoffj
    Full Member

    Beginning of the end.
    Gonna be a pisser for the frame only purchasers and how many lbs' would know the fair market value of sh bikes? None in Perth sell them.

    chakaping
    Free Member

    Stop worrying and do it.

    Never heard of anyone getting stitched up.

    Sponging-Machine
    Free Member

    10% on mine as Bikes For The NHS are shit.

    Rockhopper
    Free Member

    You may need to start worrying if the revenue come into your place of work to do an audit then find that you have received a benefit in kind (ie a bike being transfered to you for way less than its second hand value), you could end up with an unexpected tax demand.

    firestarter
    Free Member

    just finished mine they just took a 13th payment seems fair

    downgrade
    Free Member

    5% at my work.

    Nobeerinthefridge
    Free Member

    Can you 'top up' over and above the £1000? Fancy a Roscoe at 2500, using the cyclescheme, but unsure if I can.

    dave_rudabar
    Free Member

    Technically no, and certainly not if your workplace use Halfords.
    You'd probably have to be chummy with the shop you were buying from, and they'd be breaking the rules (and law?) if they let you do it.
    And anyway, as the bike is owned by the company until they choose to let you purchase it from them, who'd own the excess amount in the meantime?!?

    kinda666
    Free Member

    Stoopid Q, but what if you had a £1000 voucher but spent half of it on lights and accessories etc and £500 on a bike, would they only charge you 5% or fair market value of the bike @ £500??

Viewing 33 posts - 1 through 33 (of 33 total)

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