Bike to Work (cyclescheme) and second hand bikes

Under the Cycle scheme it seems you can’t get a recycled/refurbished bike for the C2W. Something to do with it not having a 12 month warranty.

I can’t see anything on the DfT site about requirement for Warranty, so I think it’s more a cycle scheme thing.

To me, this is a bit backward. We are trying to promote healthier living and environmental benefits of cycling, yet this practice prevents the use of recycled bikes and insists that we buy in to the high carbon footprint ‘new’ market.

Most recycle bike companies that are set up will offer 3-6 month warranties on their bikes, in reality, is that much of a usable difference from a 12 month warranty for a new bike?

Anyone successfully purchased a refurbished bike under C2W? I think that some of the Uni’s promote it, but other than getting my company to go solo on a scheme which would be difficult(whereas Cyclescheme’s approach is easy and the arrangements of loan extensions to adjust for the new guidance is most appealing for cost savings) is there any other option?

Oh and I’m not talking about £25 near the scrap heap refurbed bikes either, we’d be looking at the £200-500 range.

Assume it’s to do with fraud?

My mates could all get £1000 vouchers and ‘buy’ a second hand bike off me.

If you set up a shop to refurbish bikes yes, in that you would have to be a registered company. But I would guess that the bike recycling places will have trade accounts for consumables etc and therefore some form of legitimacy?

One of my work colleagues suggested it may be due to tax reasons, but as far as I know it’s got nothing to do with VAT has it?

More likely because Cyclescheme would not get their 10% fee on the purchase of a secondhand bike.
As long as you get a receipt for the purchase, I would imagine it should still meet HMRC guidelines.
Your company would probably need to set up their own scheme to do this. We set up and administer our own HMRC approved scheme – very simple to do and takes little time to run.

C2w is a tax saving.

Theres no tax on second hand bikes.

I don’t understand the point of the op?

I thought about this and I can’t see any reason why a shop couldn’t sell you a second hand bike through Cyclescheme. They could still get their 10% fee and the hire could still be paid for using salary sacrifice. You wouldn’t get the VAT savings, but a lot of public sector employees don’t get that anyway.
The warranty could be provided by the shop.

Jujuuk68 – Member
C2w is a tax saving.
Theres no tax on second hand bikes.
I don’t understand the point of the op?

I’m not sure you understand how the scheme works.

Edit – and I suspect Cyclescheme wouldn’t care as long as they are getting their slice of the action (10% of the sale price).

There is no tax on new bikes either! (other than VAT which is the same on second hand bikes).

The tax break (“Cycle to Work”) just talks about employers making bikes available to employees. Absolutely nothing requires them to be new bikes, and companies can buy whatever bikes they want from wherever they want.

Cyclescheme (a commercial company that some employers use to help administer a cycle to work scheme) may well impose other restrictions.

Whether you can save the VAT on the bike will depend on who you buy if from: bike retailers will be VAT registered and therefore will charge you VAT irrespective of whether the bike is new or not, which the employer can reclaim. If you buy it privately, the seller probably won’t be VAT registered, so no VAT can be reclaimed, reducing the savings you can make.

Even if not using Cyclescheme, you can imagine an employer being reluctant to rent you a bike that is not covered by a warranty for the full rental period. If something breaks, it’s really their obligation to fix it, and without a warranty, they would end up out of pocket.

Interesting. I guess that the employer is liable if something breaks outwith wear and tear, as they own it, rather than the employee being required to make sure the bike is maintained and insured if they wish.

hmmm, do you think employers know that? I know mine wouldn’t.

I guess if a recycle bike place were to offer 6 months warranty, it may help, but if as you say, employers don’t want to carry the risk of being responsible for bikes breaking maybe not enough.

I wonder how they deal with the risk of having unwanted bikes after the hire period? there’s no obligation on the employee to buy.

It seems difficult on the face of it, to do something that may well be of more benefit to the environment under this scheme don’t you think? doesn’t really make sense to me.

How many shops do you know that offer a good warranty on second hand bikes (in fact, how many bike shops sell second hand at all)? The preparation and sale of a second hand bike could entail a good few hours of labour and possibly quite a few parts. Now factor in the 10% of the sale price that the likes of CycleScheme take for their administration role. See any issues here?

yep, I’m kinda getting round to that a bit.

I guess there may be a market for slightly higher end stuff to come in under the cycle to work scheme by the cheap bike recycled from a skip organisations that are cropping up. Especially as not everyone is that savvy about selling on forums and ebay fees are getting a bit silly, maybe a webuyanybike.com type thing…..

It would mean that folk selling stuff on who want to shift it quick may have to be a bit more realistic as to the price they’ll get.

maybe..;-)

I wonder how they deal with the risk of having unwanted bikes after the hire period? there’s no obligation on the employee to buy.

Generally they recover the full cost of the bike during the hire period, or at least very close to it, so there’s not really any risk there.

Even if they don’t cover the full cost, the HMRC-specified fair market value at which you’d normally sell to the employee is pretty conservative. You can pretty easily sell a 1 year old bike for more than 25% of its original value.