I bought a bike through Cyclescheme to commute on via my employers Cycle To Work scheme 18 months ago and so far have clocked up 7000 miles on it.
I’ve now resigned after 10 years and CycleScheme want the bike back, or pay them another £250 to keep it.
Seeing as I had to pay a 10% Cyclescheme fee initially the bike actually cost me £908 (Marin Gestalt 3), I then paid £83 a month as Salary Sacrifice for a year + £250 means this bike will of cost me more through Cyclesheme than if I had bought it for cash.
Question is, if I send it back what will Cyclescheme do with it? At 7000 miles its due a VERY expensive service as the Rival1 drivetrain needs replacing..do they give it to charity etc?

It cost you 83 quid before tax, so hasn’t cost you more at all. It was your choice to pay the 10%, some shops (such as on one) charge this, the vast majority suck the cost up themselves, and it’s your choice to resign from your current job, breaking the terms of your lease.

I’d call them and speak to one of their operators, any (minor) issues I’ve had with them have been resolved toot suite.

My question was if anyone knew what they do with the bikes that are sent back, do they give them to charity or sell on.. just interested to know where it would end up.

Everything else, as you say, is my choice, but thanks for the heads up 😉

They probably sell them on eBay under a random account that you would not associate with the scheme. 😉

Not sure what they do tbh- I’d just pay the money if you like the bike.

That would be interesting to see.. i.e Ebay..

I’m 50/50 whether to stump up and keep it, or put the cash towards a shiny new Tempest. If I knew they went to a good cause it may sway me.. or maybe not.. but who doesn’t want an excuse to buy a new bike?? 🙂

Edit: I’d like to point out that I don’t like the Gestalt, its a perfect commuter, solid and reliable, but utterly dull.

That’s frustrating! It really bugs me that a positive initiative of getting more people cycling can be implemented through such a complicated expensive system!

In my experience work just wow to me at the end of 3 years and said I could keep the bike as a gift or pay £125 (I think, to return it, in which case it had to be in good condition. Nonsense!!

The whole 3 year time frame is to ensure the bike has depreciated sufficiently to not be worth much after the lease period and therefore prevent any tax dodging advantage I guess. Given you’ve ridden 7000 miles quite legitimately, I would argue you’ve met the depreciation target. Given you’ve had it 18 month I assume the original voucher is paid in full so taking your bike just feels wrong… good luck!

Used cyclescheme a few years back. At the end of the initial 12 months I paid the 7% and never heard from them again. Left the job within a year of that, so under 24 months total.

What did you do at the end of the initial 12 months?

That’s frustrating! It really bugs me that a positive initiative of getting more people cycling can be implemented through such a complicated expensive system!

It’s neither complicated or expensive.

Used cyclescheme a few years back. At the end of the initial 12 months I paid the 7% and never heard from them again.

This ^

I’d argue charging £250 for a bike that is effectively paid for in full already over the initial 12 months is expensive. The savings were achieved via not paying tax and NI, but the £250 would goto the cyclescheme operator.

Also the fact the the scheme runs at a cost of 10% of the value of the bike to achieve managing the legal tax and NI offset and long term lease agreement is all a lot of admin to effectively enable bikes to be sold cheaper to those wanting to cycle to work. Maybe this it’s just me over simplifying things though 🙂

(I understand the 10% is normally covered by the shop unless you are buying a already discounted bike in which case you might be asked to stump up the 10% as the buyer depending on the shop)

Are you sure they are charging you £250, £250 sounds like the taxable value benefit in kind you would pay on a bike costing over £500, 25% of the purchase value (£1k voucher) which is then seen as a taxable benefit and if you were still in employment, you’d pay your tax rate on the £250

I’d argue charging £250 for a bike that is effectively paid for in full already over the initial 12 months is expensive.

Which is only because the OP is breaking the terms by leaving his job. Ordinarily, he’d only pay 4 or 7% depending on the value of the bike, to extend the hire agreement, and them bike would’ve been his after the 2 year extended period.

It’s not expensive or complex unless you do something like this.

By resigning and stopping the payments from your wages, you break the terms of the contract and that is what the “penalty” charge is supposedly for. I had no problems when I bought my last commuter through them, even with the final payment it saved me about 25% on what was a brand new £1k bike. Latest one I’ve bought myself as I have no intention of staying with my employer one second longer than I have to, and I don’t want the aggro of sorting the scheme out when I leave.

I’ve used cyclescheme twice. £1000 towards a bike, 12 payments of £83 (pre-tax) and at the end I paid a one off payment of £75. The bike officially is owned by Cyclescheme for another 3 years but you never hear from them again. I have no ties to my company after the 12 months and would pay nothing if I resigned.

Did you select the 12month option or the 4 year option?

It definitely looks over-complicated and expensive to me. On a £1000 bike the govt loses £558 tax and NI (£420 from me and £138 from my employer). Cyclescheme take a £170 cut. I’ve still used it because I’m saving £250 but its crazy that the govt gives my employer and Cyclescheme so much to encourage me to buy a bike.

Are you sure they are charging you £250, £250 sounds like the taxable value benefit in kind you would pay

Yes this is what happens. Cyclescheme could gift the OP the bike and he would be liable to pay tax on the £250 benefit. But they refuse to offer this option and unfortunately are legally correct since we have to agree that we are just ‘hiring’ the bike from then when we sign up.

It definitely looks over-complicated and expensive to me.

5 bikes bought through cyclescheme now, it’s never been complex or expensive.

I’ve still used it because I’m saving £250 but its crazy that the govt gives my employer and Cyclescheme so much to encourage me to buy a bike.

It’s crazy that people on a cycling forum think that a tax break for cyclists is crazy.

A tax break for those in well paid regular jobs…

It’s crazy that people on a cycling forum think that a tax break for cyclists is crazy.

A tax break for cyclists is a great idea. It’s the implementation of this one that is crazy. How is it fair that 40% rate tax payers save more than 20%? Why can’t people on short-term job contracts benefit?

You could argue they pay more tax? (I’m not a 40% taxpayer btw!)

A tax break for those in well paid regular jobs…

Its nice to get something back for a change instead of constantly paying in.

Why are they not offering you the “Own it Later” option?

https://help.cyclescheme.co.uk/article/42-what-is-an-ownership-fee

It’s not their rules BTW, it’s HMRC’s rules.

What would happen if you took up the option to return the bike? I would be very surprised if they actually collected it. Has anyone ever tested this?

If you are not that fussed about the bike I would suggest this and see what happens.

As an update and to maybe answer some questions raised..

I had made the 12 x £83 payments last year. At the end of that initial hire period I took up the own it later option (as mentioned by a few) which cost me £70 which ‘allows’ me to continue to use the bike (still owned by cyclescheme) for the next three years at which point they will gift me the bike (11 November 2021)

The demand for 25% of package value came, in error, from my employer.

I have spoken directly to Cyclescheme, after that initial 12 month period if I wanted to buy the bike it would of cost me 25% (HMRC devaluation), but because I took the own it later option that devaluation becomes 0% in November 2021.

The grey area is that if I told Cyclescheme that I wanted to keep the bike, but no longer intended to use it primarily to commute to work then I would be in breach of the own it later terms and conditions and a fee would be payable on a sliding scale (HMRC rules).
I think my employer didn’t realise that Cyclescheme and HMRC don’t care who my employer is once I’ve signed the own it later agreement (and paid £70), as long as I use it for commuting then they’re happy.

As an aside, I do believe this scheme should in some way be open to all regardless of employment status, if you want to buy a bike for commuting on that should be encouraged and probably should be via the tax system. Actually buying a bike for ANY use should be encouraged if I’m honest. Zero VAT maybe?

So, this whole thread is because you didn’t understand the contract you entered into, what you agreed to and how much you paid? 😂

Glad to hear that’s cleared up 🙂 It felt so wrong to be charging you £250 for a bike that’s effectively paid for in full and has 7000 miles on the clock. Especially given there’s a high chance you’ll continue riding it in a future job…

To be clear, I’ve used the scheme twice successfully and agree that as the purchaser, it’s ultimately a good deal and there are savings to be had. My comments about it being expensive and complicated relate to the admin costs of running the scheme, it’s big business to be the middle man as evidenced by the number of different companies that offer the scheme under government guidelines. My beef is the concept of charging you take ownership of a bike that is effectively already paid in full. Would cycle scheme really pass the tax back to the HMRC? I doubt it!

I agree, with comments above, if the goal is to get people cycling, make bikes tax exempt and do away with all the admin 🙂

So, this whole thread is because you didn’t understand the contract you entered into, what you agreed to and how much you paid? 😂

Er, no. I know exactly, it was my employer who didn’t and gaslighted me into thinking I had misunderstood the own later contract and the onus was on me to contact Cyclescheme and confirm their error. 🙂
Also the thread was to see if anyone knew what Cyclescheme did with returned bikes as they won’t tell me beyond “processed” 🙂 But that’s now moot as I’m keeping the POS 🙂