I have done the cycle to work scheme at my work for the last 4 years and every time its been through cyclescheme.co.uk.
Its only me who does the scheme at work and I administer it myself. As the savings are getting less and less I’m looking into alternative methods or running the scheme in-house if possible to avoid the final payment / extended hire period.
An old friend used to do a administer the scheme at his works and there was no final payment but I cant find his contact details to ask him.
My main annoyance is that the bike shops understandably wont give any/much discount due to the fee they have to pay which often means that it would probably work out better if you could afford to buy outright (not an option).

Any advice would be gratefully received as Google hasn’t provided any answers.

Andy

There is no scheme. The company buys the bike, you deduct gross the value of the bike from pay monthly over a period of time. You just do a letter to the employee stating you have altered the gross pay. Thats it.

There is no scheme. The company buys the bike, you deduct gross the value of the bike from pay monthly over a period of time. You just do a letter to the employee stating you have altered the gross pay. Thats it.

As above, the company can just buy the bike. The only thing is the company is then responsible for the bike being in a safe condition. I appointed myself “bike safety officer” 🙂

The final payment thing was tightened up on last year though wasn’t it. It was always supposed to be ‘fair market value’ but previously wasn’t defined so was usually a nominal sum but now is defined (around 20% of purchase price I think after 1 year). The only way to get around it is to extend the lease for a further 3 years whereby the final purchase cost is 3 or 7% (depending on your tax band). I don’t see how a self-admined scheme could bypass that (without being fraudulent).

I did wonder if it was a simple as my company paying the bike shop direct and deducting the money from my wages.
Wonder how that works from the company’s point of view when the accountant asks why £1000 was paid to a bike shop.

The company can spend its money on what it wants. If it chooses to take advantage of a tax free bike for its employees then any right minded accountant would support that.

But TBH, most auditors / accountants wont give a damm, its probably im-material

From a company’s perspective, they are buying an asset (the bike) and renting to an employee. As long as the company recovers all monies from the rental and final payment (and associated employers NI payments) and is cost neutral for the business then they should be OK. From an audit front, it has nothing to do with them – its the businesses asset to do with as they see fit.

With regards the final payment, again, the business can charge you what they like, nothing to do with HMRC. What HMRC are now doing though is stipulating what they perceive the value to be. So, if you make a final payment of £50 when HMRC are saying fair value is £250 you will have received a benefit in kind of £200 and have to pay the tax/ni on this.

As Fuzzy says, a way to reduce this is to delay the transfer of ownership for a couple of years so the fair value reduces.

There are still decent savings to be had if you self administrate – you just need to run some sums to work out the savings. I got a 2012 bike reduced from £1050 to £800 on our scheme. I reckon I’ll end up paying just shy of £500 for mine so worth doing IMO.

A couple of threads about this here

http://singletrackworld.com/forum/topic/talk-to-me-about-cycle-to-work-scheme

http://singletrackworld.com/forum/topic/cycle-to-work-scheme-12