I have come to the end of my 12 months on the bike to work scheme.
There are three options, what do you guys usually do with the bike at the end?
Continue riding it to work, that's why you got remember...
Pay the money and extend it for a further 3 years. It's the only sensible option.
depends on the 3 options, usually best option is a zero cost to you extended hire agreement that then transfers ownership to you after x amount of years.
who's it with?
Pay the tax on the residual value, order another one and sell the old one to create a reservoir of MTB spares funding. Simples. 😀
depends on the 3 options, usually best option is a zero cost to you extended hire agreement that then transfers ownership to you after x amount of years.who's it with?
Bike to Work Ltd in Ireland, according to invoice.
Options...
1. Purchase the goods and pay the HMRC Market Value to ensure there are no tax implications for BIK. (See Secondary Agreement and Invoice attached)
2. Pay a small refundable deposit to Bike to Work and extend the hire agreement for a further 36 months, recommended option (See Extended Use Agreement)
3. Return the bike (at your own cost) to Bike To Work and pay no more.
Extend the agreement
I think, since the company legally owns the bike, they can just give it to you as a benefit. This benefit is taxable, however, and will be like adding an extra £250 (assming £1000 max spend and HMRC resale value of 25% at 1 year old) to your salary. Of course, the longer you wait, the lower the resale value and thus the tax paid.
This is not to be confused with the old system where you owned the bike after the repayment period.
If you can get your company to do this it works out a hell of a lot cheaper, and the company no longer has to worry about the bike.
I must point out that I'm not saying this as fact. This is what my research suggests, and the route I'll attempt when my repayment period is up, but is in no means confirmed. Some of this information I got by talking to someone claiming to be an HMRC employee.
I got my mtb through CycleScheme (I think). I was more than a little disappointed to get the letter from them at the end of the 12 months and I got the three options of:
1) Pay for the bike to own it outright (can't remember how much this was exactly but not worthwhile)
2) Pay a refundable deposit of £70 to extend the hire agreement for another 36 months
3) Give them the bike back (at my cost)
So, I reluctantly had to give them an extra £70 (which I wasn't happy about). Their T&Cs do state that it must continue to be insured, though if it gets lost or stolen within the next 36 months and isn't insured, I would lose my deposit.
So if it turns out that it does get lost/stolen within the next 3 years just after my insurance expires, it would be a terrible shame.
I'd never get a cycle to work bike again, simply not worth the hassle in my opinion.