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It raise the question of how / why are the lease "payments" effectively valuye of bike less tax savings and divided by 12?
because it was poorly setup.
In fact the whole c2w thing was poorly setup both in how it was sold, not that long ago that the major scheme providers, CS, Evans, Halfords etc were still touting the 40% saving tripe.. i mean 40% on what? no one would hire a bike for a year for the same as paying for one..
the initial twelve month thing came as a way of covering off the costs to employers and then t simply transfer the bike at the end to get it off the books... but the problem is that at the end of 12month the bikes sill have a decent residual value and that transfer becomes a BIK - but very few companies setup there scheme to do title transfer and them tax on residual value.
also lack of understanding about the scheme from employees and employers is also pretty poor.. that has got to be blamed on the scheme providers for the way they sold (sic) the scheme..
real shame as the intent was good...
The problem was, the rules dictated to qualify for the scheme you were not allowed to have an agreed right to buy the bike at the end.
It would have been perfectly legal for a company to charge you nothing to hire the bike for 12months then give it to you and you pay the tax on the BIK.
But this is not ideal from a companies point of view, unless its your own company 🙂
Update, I just had an email from Cyclescheme:
Thank you for your commit regarding the final payment if an employee leaves early, I have passed your message to management to advise this needs to be added.Having looked deeper into ************ Ltd account, I can confirm that we have contacted you in error and you have paid a market value when leaving employment.
Please accept my apologises for any inconvenience this has caused you.
I win.
🙂
Boom. Worked out nicely in the end. Nice to be clear, I bet. I'm scot free after either 3 or four years, can't remember which. Not planning on going anywhere in that time, but if I do, I know there's a possibility of being asked for some cash and probability of them forgetting about it.
Please accept my apologises for any inconvenience this has caused you.
or in other words:
"I'm sorry we tried to shaft you for a significant amount of cash on the basis that we hadn't looked at your details properly (oh, riiiight!) and will now beat a hasty retreat as you appear to have cuaght us out."
Funkers!