[Closed] Cylce Scheme - "A Fair Market Value payment is payable upon cessation"

The final payment has nothing to do with cyclescheme. The employer own the bike, not cyclescheme. The employee pays the employer for the bike.

5% of original price is usual, or I've seen one extra monthly payment used as well. It's a token amount to stop the scheme being a hire purchase scheme.

5% is the figure normally used Si. What are you buying now? We all know what at my business means 🙂

hehe Steve, its for my employees. Just getting my head round how it works... O, and maybe something for bashing familey cycleways with a trailer in tow 😉 Tissington trail here I come

I paid 5% a couple of months ago.

One additional monthly payment has often been used, so that's 8% or so. Makes the payroll figures easy as there's no additional calculations to do or figures to work out.

My employer insists that the final payment is at true market value, because if it was lower that (ie the difference between the nominal 5% say and the actual market value) would count as a taxable benefit which they would have to deal with. But they do say you can carry on using the thing for as long as you like even though it is still their property.

so market value on stw classifieds for a year-old bike ?

people tend to say 50%, less 10% for each year don't they ??

My work didn't charge me anything, and i don't work there anymore but still have the bike. I wouldn't worry about the taxable benefit aspect as i think there's a tacit understanding at HMRC that cyclescheme can have low final purchase values, obviously they can't change the rules for one thing, but they can chose not to scrutinise it.

I've only ever heard of one company (a council IIRC) ever threatening to ebay all the bikes, think a lot of them went 'missing' after that.

My work (NHS) is doing the 11mthly repayments with a 1mth+£5 charge in the 12th month as fair market value.

Considering the volume of employers who do not consider 'actual' market value at the end of the year, I would image they actually got tax office advice over what is reasonable to avoid the 'taxable benefit' issue.

I've paid £50 and £35 the twice I've used the sceme. Both for £1000 bikes.

3, Cyclescheme pay shop for bike

should be '3, Cyclescheme pay shop for bike taking a 10% commission right out of shop's margin' 🙂

And somewhere in there should be 'Cyclescheme sit on paperwork for weeks whilst employee has no bike' I'd suggest shopping around for other providers of Bike to Work schemes (do a google for Bike to Work - several big shops offer it direct), you may find others run a lot better schemes than Cyclescheme.

Took me about a week to get my voucher from inputting the details in cyclescheme's website, and its been a couple of weeks the time before that using Cyclescheme, so I don't think its all bad

Cyclescheme sit on paperwork for weeks whilst employee has no bike

All the vouchers at our place have come through really quickly, and all three bike shops I've heard of were amazed at how fast they came through. I'd suggest it's the employers' finance departments sitting on paying Cyclescheme's invoice, not cyclescheme sitting on the paperwork.

thanks for the info. There appear to be a lot of shops advertising the scheme, so they must be happy with the 10%. I want to buy from 18bikes (support local businesses as mine is also in Derbyshire) and they use that scheme.

fair market value: just make sure it's trashed then! 🙂

My employer gives you a 'discount' off the bike then works out the monthly payment after this discount. Come month 12, they make you pay the discount as your final payment so you don't pay more than the value of the initial voucher

Cycle to work scheme assumes you're using it every day to and from work throughout the year. If you hit a few pot holes and use the brakes a lot, it'll need new wheels. The gears will probably be worn out. if its got suspension front and/or rear that could need a full service etc etc. If you price this up at proper bike shop rates, its very easy to argue that 5% IS fair market value for a well used bike.

My current commuter i bought as an old MTB. i've had to replace both wheels, tyres, shifters, mechs, cassette chain ring and chains, handlebars (they were very old) grips and saddle.

Very true Horatio.

My CX bike on the CycleScheme is on its 3rd set of tyres, 2nd chain & cassette, 2nd saddle & 2nd lot of bar tape all provided by me. Oh and I've changed 1 set of brake pads and fitted a set of XTR rotors. And I only got it at the end of Febuary.

Mind you it did get a lot of use over the last 2 weeks on holiday in France! Is that against the C2W scheme?

"fair market value"

Well I am keeping all the original parts that are wearing out. If it comes to valuation, I'm going to put them all back on. I've got an old Judy fork that can go on ("the Fox one wore out - honest")

But it won't come to that. I think it will be £50. Flog it and then think about getting another bike on the scheme!

I just paid £23 after a year for a £1000 bike. They were going to charge £96 to take it off my hands if I didn't want to keep it!

As someone said earlier, the Tax Man doesn't consider the bike a taxable benefit, and accepts 5% as a fair market value.

what if (happening a lot at present) your employer goes bust half way through the term of your hire ?