Viewing 20 posts - 1 through 20 (of 20 total)
  • Employers dropping Cycle2Work scheme?
  • CaptJon
    Free Member

    My place of employment – a university – has decided the changes to the Cycle2Work scheme mean it isn’t worth participating in… for staff. To keep similar levels of value to the old scheme they are going to run an in-house version. That’s a pretty good move imho assuming it works.

    Is anyone else’s employers doing anything similar?

    13thfloormonk
    Full Member

    Would have thought they still fell foul of the new regs, which basically state the employer can’t hire you a bike for a year then ‘give’ you it for a vastly reduced price.

    My employers have just worked around it by letting us continue the scheme at £0 a month for another 31 months until the bike has depreciated sufficiently that they can give it to us without it being a taxable benefit.

    Only snag is that we have to wait for the end of that 31 month period before getting another bike, time for a credit card if I want that tourer I think!

    DezB
    Free Member

    My employer has just started it up and I don’t think they are getting any takers. From what they told the guy in my office –
    He selects a £800 bike
    He pays eg. £40 a month for a year
    He then still has to buy the bike for market value?

    He’s already paid £480, which would be around the market value!
    Obviously the maths may be different, but that was the gist, so you’re not actually saving anything…?

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    jamesy01
    Free Member

    Would your employer not be better to “take ownership” of the bike at the end of your hire period, retain ownership on paper for the 31months and then write the asset off (let you keep it)…at least that is my grand plan!
    Means you can still get another bike in the meantime 🙂

    ir_bandito
    Free Member

    its still an interest-free loan and paid pre-tax, so there’ll be some benefits, surely?

    miketually
    Free Member

    The changes will affect them whether they’re going through cyclescheme or running it themselves.

    You still save money, even after the changes.

    mountaincarrot
    Free Member

    I suspect our place will drop it now. I got them to start it up 4 years ago and it ran usefully for 3 years with many people using it. Pretty much a waste of time for all concerned nowadays.

    timmys
    Full Member

    I’m just coming to the end of my 12 month “hire” period on a cycle2work scheme run through Cyclescheme. I’ve recently been notified that their new process is;

    – At the end of 12 months you pay a “refundable deposit” of 3%/7% of bike value (depending on whether it is below or above £500 value) and sign an “extended use agreement”.
    – After 36 months you then either keep the bike and they keep the “refundable deposit” or you return the bike and they return the deposit.

    Of note;
    – It states you CAN start a new scheme (ie. obtain another bike) during the “extended use” period.
    – If your employment status changes during the “extended use” period then it is of no consequence as the agreement is between you and cyclescheme.

    Incidentally my employer is a university – they use Cyclescheme.

    EDIT; Linky; http://www.cyclescheme.co.uk/employer,intro.htm

    BoardinBob
    Full Member

    My company kept it going but they have changed the wording re. the end of the hire period. Previously there was no mention at all of what would happen after 12 months but now they have stated that if you want to keep the bike, you can purchase it at a price derived from the HMRC matrix and if you don’t want to keep it, there’s a final payment equivalent to your normal monthly payment which they will take as a “disposal fee”.

    pdw
    Free Member

    now they have stated that if you want to keep the bike, you can purchase it at a price derived from the HMRC matrix and if you don’t want to keep it, there’s a final payment equivalent to your normal monthly payment which they will take as a “disposal fee”.

    If that’s really what it says, then the scheme is invalid and the tax break is at risk. There can be no commitment to sell you the bike at the end of the period.

    Our company has only just implemented the scheme (admittedly because I want a new commuter and agreed to do all the paperwork). The rise of VAT to 20%, and the upcoming rises in both employers’ and employees’ NI mean that there’s more to be gained. If you employer is prepared to sell you the bike at less than the HMRC value and tax your on the difference, then you can still set the scheme up in a way that makes sense for both employers and employees, and that still offer very decent savings (in our case, just over 50% for higher rate, and nearly 44% for basic rate).

    Our scheme is administered internally, which means that staff can buy bikes from wherever they want and get the best possible deal, rather than just from a retailer who’s happy to pay Cyclescheme or Halfords their 10%. For us, going through Cyclescheme offers extremely little benefit.

    miketually
    Free Member

    My employers are doing the same as timmys’.

    I finished paying for my bike a while ago, but it’s technically still owned by my employer and I’m using it free of charge. In a couple of years, I’ll pay the token amount required to buy it.

    CaptJon
    Free Member

    13thfloormonk – Member
    Would have thought they still fell foul of the new regs, which basically state the employer can’t hire you a bike for a year then ‘give’ you it for a vastly reduced price.

    I don’t know the full details, but as i understand it the in-house scheme will be run without anything to do with the govt’s scheme. They are going to administer it alongside the subsidised corporate travel scheme which lets people buy travel passes (bus, train etc) at a reduced cost and pay through their salary.

    miketually
    Free Member

    I don’t know the full details, but as i understand it the in-house scheme will be run without anything to do with the govt’s scheme.

    The “government scheme” is the tax system. Running something without anything to do with that scheme is called tax evasion.

    pdw
    Free Member

    I don’t know the full details, but as i understand it the in-house scheme will be run without anything to do with the govt’s scheme. They are going to administer it alongside the subsidised corporate travel scheme which lets people buy travel passes (bus, train etc) at a reduced cost and pay through their salary.

    It sounds to me like they’re just cutting Cyclescheme (or whoever) out of the loop.

    Making a bike available to you in return for a salary sacrifice pretty much is the government “scheme”, and given that the tax break exists, you’d be mad to not make use of it.

    mdb
    Free Member

    Evans has a useful article about the changes on their blog

    FuzzyWuzzy
    Full Member

    It still works if you’re using it for what it’s intended, if you’re after a shiny new bike each year with the rest of us having to foot part of the bill then no it doesn’t work so well any more which is a good thing IMO.

    CaptJon
    Free Member

    miketually – Member
    The “government scheme” is the tax system. Running something without anything to do with that scheme is called tax evasion.

    That is quite a jump to make. The in-house version is going to provide the same benefits as the old scheme, I said nothing about the same mechanisms for savings.

    EDIT

    It sounds to me like they’re just cutting Cyclescheme (or whoever) out of the loop.

    Making a bike available to you in return for a salary sacrifice pretty much is the government “scheme”, and given that the tax break exists, you’d be mad to not make use of it.

    That might be what they are considering.

    miketually
    Free Member

    My point was, it’s still the government scheme and so subject to the same rules as when using the 3rd party. So, you’re employer are still using the “government scheme”.

    CaptJon
    Free Member

    furry muff

    sam_underhill
    Full Member

    Actually with these new rules and the company organising everything directly it could be a better situation. Remember one crucial fact – the last thing any company wants is a massive pile of used “hire” bikes back.

    So… at the end of the payment period (12 months) you agree to continue hiring the bike for £0 for a further 60 months. No cost, no admin (?) and at the end of that period the bike transfers ownership to you (legally) with no tax liable. Even if you leave employment with the company is there anything actually stopping them continuing the £0per month hire on a grotty old bike? if not then it’s probably still in their interest to let you keep with the hire (because they still don’t want it back).

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