[Closed] Cycle to Work scheme

More likely they're considering whether or not the scheme is actually doing what it is supposed to - encourage new/existing cyclists to use a bike for commuting thereby reducing congestion, CO2 emmissions and getting the nation fitter - as opposed to encouraging existing cyclists to buy mid-high end kit for trail centres and the like.

There has been so much abuse of the scheme, I'd not be surprised to see the upper limit reduced or for it to be abandoned altogether.

Thanks druidh, shame as I was looking forward to abusing the scheme, oh and commuting in/getting healthier etc. Strange that the decision comes on the advice of the financial auditors - thought there was negligible cost to the employer?

thought there was negligible cost to the employer?

The employer pays reduced NI contributions, so they save a little money

Plus, empoyees who cycle in to work are, on average, off sick less and are more productive.

The ones who (ab)use the scheme to buy MTBs are less productive because they're on here all day and are off work with injuries 🙂

just ordered a new bike today, our limit has gone up from 750 to 1000 quid, result.

Ours was cancelled for the same reasons, inland revenue shut it down.

it has just been restarted with new IR guidance, so you might be in luck if yo uget them to try again now, IR only gave us the plan two weeks ago..

The problem is with the 'nominal fee' you pay at the end of the period. most companies are actually breaking the rules as you are supposed to get three written independent quotes of value of the bike and take the arithmetic average and this is what you pay your company for the bike...

that was then..

now the rules are that you pay the tax on the nominal fee which is set as 15-22% of the original value (ie voucher value).
so for a 1000 you pay the tax on £220 as a benefit in kind, well you may find your company decides the bike is worht 15-22% ( the IR value) and charges you that.

companies charging £10 as the end of contract fee are actaully breakign IR rules.....

So ramble over.... go try again..... We use a company called faircare to do the admin, you could maybe ring them and discuss options...

Cheers

Hmm I didn't pay anything at the end for mine.

Starting to think that these schemes arnt as great as people first made out. A lad at work got a bike4work voucher the other day. Saw a bike he liked at halfrauds and went to cash it in. Only they "dont take that type" of voucher, something about halfrauds having its own scheme?, same result at Evens, they dont take the national cyclescheme vouchers either aparently?. I didnt realise there was more than one scheme. Looks like its only the tiny shops with little stock that take the grassroots vouchers, although I belive Merlin support this one.

However, all the shops hes been to wont allow him to add to the value of the voucher, and neither will they honour any special offers or reductions.

So you end up paying top whack for a pretty modest bike, which kinda wipes away much of any tax savings you had by using the scheme, and if you follow the letter of the law, you get the pleasure of paying for it again to own it. Pffff...balls to that.

Weather your using it stricktly for work or more pleasure, id hardly call it an abuse of the scheme either. Which ever way you use the bike, its getting you fit and healthy, meaning less time off work, less strain on welfare and less money on healthcare, unless you come off a lot.

Looks like its only the tiny shops with little stock that take the grassroots vouchers

You mean proper independent bike shops?

15-22% ?
The Cyclescheme website still states 5%.
I'm interested in any changes as I'm looking to take on the organisation of the scheme at my work.

I have just taken one through Cyclesheme and same info as Barney

You mean proper independent bike shops?

Cyclesheme don't make the rules though guys, its very clear if you go onto the Inland Revenues web site that the second hand value means the true value of a one year old bike.
Also if you company is audited by the Revenue you could be picked up on this a few years down the line and be forced to pay the money back.

Our accountant said when the scheme first came out that she'd wait and see how long it was before the IR took a look...

Better that the company just buys the bike and 'lends' it to employees - legal and no need for salary sacrifice - probably helps if you are a Director for this one.

But if you're Public Sector you'll be fine 😉

Is there any need to buy the bike at the end of the term? Can the bike not just remain on loan for a very long time, you know, a permenant loan. cough.

At least you aren't in a government department who can't figure out how they can run it. Can't even get a government initiative when you work for them.

its very clear if you go onto the Inland Revenues web site

Can you post a link please? I can't find it.

Ah, here we go:

[url= http://www.dft.gov.uk/pgr/sustainable/cycling/cycletoworkguidance/pdf/518054/ ]DFT Guidelines[/url]

So they've effectively scrapped the scheme then, yes?

it will now cost more to buy a bike on the scheme than if you just went in to a shop and got a 10% discount and bought it yourself,having to pay fair market value at the end for a bike you have allready paid for is crazy

Guys, you appear to have forgotten one thing. The scheme is not designed to help you "buy" a bike. It is a loan or hire scheme.

having to pay fair market value at the end for a bike you have allready paid for is crazy

It says above that you pay the tax on the fair market value, not the fair market value itself.

If you take the 15% of purchase price as a fair market value, the tax on that would be around 5% of the purchase price (depending upon tax band). That fits quite well with basically making a 13th payment of the same value as you've already paid, which is what I was expecting to do anyway.

It says above that you pay the tax on the fair market value, not the fair market value itself.

It says:

to prevent a taxable benefit in kind.... the emplyoee must pay the employer the full market value of the equipment.

Seems pretty clear to me.

RichPenny - Member

It says:

to prevent a taxable benefit in kind.... the emplyoee must pay the employer the full market value of the equipment.

Seems pretty clear to me.

So - if you don't pay the FMV, there's a taxable benefit in kind. i.e. [i]you pay tax on the BIK[/i]. See miketuallys post

Ah, cheers mate, don't have a lot of experience with this tax malarky. It didn't make a lot of sense.