Cycle Scheme Liquidation help

Needing a bit advice, company I work for has went into liquidation. I have 9 months left on the cycle scheme.  Anybody know where I stand on this? It’s early days and liquidator not offering much advice.

Wouldn’t they just take the 9months left from your final pay cheque? They will have already paid in full to the cycle scheme provider I believe ?

Sit tight and keep THEIR asset until they’ve paid you what your due?

It’s an interesting question – the bike is their asset until it’s paid off, as a member of staff you are a creditor who needs paying, but you are also a debtor for the balance under the scheme, if I understand it correctly.

I think quentyn probably has the pragmatic answer up there,, just  wondering if there is anything in the C2W contract or FAQs?

It’s early days and liquidator not offering much advice.

Why did you even bring it to their attention before they asked you? I’d have kept my mouth well shut about anything I may owe them!

I worked for a company that went bust once, all the decent test equipment mysterious disappeared. I know because I went to the liquidation auction to potentially buy some and only the crap stuff was left. I complained to the liquidators, but they didn’t care.

I worked for a company that went bust once, all the decent test equipment mysterious disappeared.

struggling to think of any liquidation I’ve been aware of where this didn’t happen to some extent tbh!! +1 to keeping shtum until it’s mentioned 🙂

in theory you’ll owe tax on it too. but agree keep stum. cant see Halfords or whoever doing alt.

I would leave that for the administrators to sort out. Or to put it another way, say nothing and ignore it until they approach you.

What bike?

I know of a friend worked a tech start up in the US. He went to the liquidation sale to buy some kit. However he backed out when a random tool box went for over $10,000 dollars. Apparently engineers had stuffed critical components into random boxs then come back to bid on them

The bike, no idea

I’d keep shtum, you’ve raised it leave them to come and ask.

When my last place imploded I told the administrators I had a laptop, they never came for it, it still gets used (a surface go)

I don’t think they could just take it all from the final pay check, especially if it would take you under the minimum wage.

Sorry to hear about the job OP, hope you get what you’re owed and are re employed again soon

+1 for keeping schtum.  BUT – If you want to understand what you *could* be liable for, my understanding is

– 9 months ‘rent’ (ie the remainder of the rental term)  which obvs you’ll not get to do on salary sacrifice, so will have to pay it out of whatever £££ you have (so no more tax saving).

– at the end of the 12 months… you still don’t own the bike.  The Co that has gone bust / the administrators do.  Strictly they could take it back and sell to someone else. Or scrap it.  Or to you if they want to see if you want to buy it  (remember the tax man thinks it’s still worth 25% of the original value- and in reality could be more).  That would then be a sale by rhe administrator just the same as then selling any asset.  Or they could stick it into an auction along with the desks, chairs, coffee machine, fridge,  cat, and anything else thst was an asset.

So I’d defo keep schtum and if they do come knocking, tell them it’s been lost – for which you’d have to pay the 25%  residual value at the end of the rental.

(Much of this is the same as if you left the Co yourself – you’d still be liable for the remaining rental).

But surely your agreement is with the company. So if that doesn’t exist, you can’t hire it from them. It’s completely different to leaving the employer who continue to administer it. I think you should be able to return it (if asked).

But the best way to find out is to call the provider (not the company) and ask them what happens in the interim. That avoids awkward questions with work/liquidators

First question who actually owns the bike and who do you owe?  Is it

• Employer
• Cycle scheme provider

Take a look here for more info.

https://help.workplaceextras.com/article/87-who-actually-owns-the-cycle-to-work-bik

https://help.cyclescheme.co.uk/article/45-who-actually-owns-the-cycle-to-work-package

The impact on you and your claim in the liquidation may be different depending on who owns the bike and who you owe legally money to.

Hiding things and making incorrect/incomplete declarations to the Redundancy Payments Service/liquidator is not a good idea.  There’s a good chance of it being picked up by the liquidator or RPS during the claims review.  These checks are a big regulatory focus area currently.

Hand them back a tip bike if they ask for it.

defo keep schtum and if they do come knocking, tell them it’s been lost – for which you’d have to pay the 25% residual value at the end of the rental.

I was with you right up untill this bit. What feat of mental gymnastics did you do to conclude that that solved the problem?  If he ” keeps” the lost bike till the end of the rental then he obviously had to continue paying the hire costs.

That’s why C2W providers quite clearly state that the bike needs to be insured by the employer.

PS, OP I’m firmly in the keep schtumm camp. Then if they do take the balance out of gross* pay then just pipe up and return the bike.

* By no means guaranteed. Someone I know very well had it subtracted from gross pay on severance.

Hiding things and making incorrect/incomplete declarations to the Redundancy Payments Service/liquidator is not a good idea.

I wasn’t suggesting lying about it if filling a form or being asked, but as I understand it’s the liquidators job to deal with assets and liabilities, so let them do the leg work!

Hand them back a tip bike if they ask for it.

Make sure to write “Specialized”* in Sharpie on the down tube.

*Or whichever brand is appropriate

That’s why C2W providers quite clearly state that the bike needs to be insured by the employer.

I thought the bike needs to be insured by the employee

I thought the bike needs to be insured by the employee

You’d be correct. My post was riddled with basic errors.  I am a tumschie.

If he ” keeps” the lost bike till the end of the rental then he obviously had to continue paying the hire costs.

That’s why C2W providers quite clearly state that the bike needs to be insured by the employee

PS, OP I’m firmly in the keep schtumm camp. Then if they do take the balance out of net* pay then just pipe up and return the bike.

* By no means guaranteed. Someone I know very well had it subtracted from gross pay on severance.

In both companies I’ve been at that had C2W, the bike is the company’s asset. Your salary deduction is used to pay down the amount you owe them.
If their accounts team are half decent there should be a loan account that the initial loan then repayments are recorded in. This will be no different to any director loan account, season ticket loan account etc.

If this has been done and the liquidators are half decent, they will be combing the balance sheet for any debts to be settled.

As others have said, you could try to hold off vs any owed pay, but it will be messy as there is a strict distribution order- eg if there are any secured loans, monies need to be recovered and then settler these first.

Ordinarily salary deductions can’t be taken if it means an employee goes under NMW (as mentioned above) but this is likely to be a different case- eg if  employees were only to get 10p on the £ for owed wages as part of the liquidation I don’t think they would be held up for breaking NMW.

Good luck in the job search- company I was at had a round of forced redundancies early last year, then shut one factory and a sales office. When they announced another round in July they were surprised how many of us volunteered as we’d had enough! We all got jobs before our notice periods ended so fingers crossed for you.

There won’t be any money left by the time the liquidators have rinsed the assets.

Update.  So found out today I need to pay the balance of cycle scheme and keep the bike. This will come off my redundancy payment. I have put it all down on claim form going in for redundancy payment. What isn’t very clear is  payment in Lou of notice that I can claim for up to max of 12 weeks which I’m entitled to. Question is do I get that payment if I go into other employment?

thanks for all the help and info so far

Question is do I get that payment if I go into other employment?

I would strongly think so.

Question is do I get that payment if I go into other employment?
I would strongly think so.

I did when I was last made redundant, but that was 1994!

What isn’t very clear is  payment in Lou of notice that I can claim for up to max of 12 weeks which I’m entitled to. Question is do I get that payment if I go into other employment?

IANAUnionRep but I would say yes you get paid it.

On your last day with the company you’re paid in lieu of any notice you didn’t revive, so if you should have had 12, were given 3 then that would be 9 (or 12 if you were given none, etc).  And a redundancy payment.

If they wanted to stop your working elsewhere, it would need to be gardening leave (i.e. keeping you employed for the 12 weeks).

I can’t see any contractual way they could claw it back if you have another job.  By saying it’s in lieu of notice they’re saying the contract is terminated and the payment is them discharging their obligations under it.

Hope. They. Don’t notice while dealing with all the bigger stuff. You’ll be way down their list

Question is do I get that payment if I go into other employment?

See 4.5 of the link below including making sure you claim any benefits.

https://www.gov.uk/government/publications/redundancy-payments-from-the-insolvency-service/explaining-your-redundancy-payment

thegeneralist

Free Member

defo keep schtum and if they do come knocking, tell them it’s been lost – for which you’d have to pay the 25% residual value at the end of the rental.

I was with you right up untill this bit. What feat of mental gymnastics did you do to conclude that that solved the problem? If he ” keeps” the lost bike till the end of the rental then he obviously had to continue paying the hire costs.

My logic is that at the end of the 12 month hire period (it’s a hire) you still don’t own the bike.  So they *could* make you pay the remaining 9 months hire (which you’d be paying without the tax saving) AND then take the bike (their bike) back off you – as they don’t have to offer it back to you for further hire or sale, they can just take it back That means you have paid over the odds for a 12 month hire and have nothing at the end of it.

The 25% figure is the deemed value of the bike at 12 months old by the HMRC.   You’ve lost it, the bike owner (which isn’t you at this point) can ask you to cough up for the value of the lost bike.  So at least you have a bike for the £££ you’ve shelled out for over the 12 months, rather than potentially having nothing.

The company has went into liquidation forced by HMRC I will claim redundancy then after the 12 week notice period I can claim a payment for Lou of notice but seems and benefits received and any money earned from

new job gets taken into consideration and deducted from the notice amount.

Check out how the liquidator has calculated your right of offset.   Its in the Insolvency rules and they should show how their working fit with those rules.  You’d want to be arguing your debt is offset against whichever of the PILON or Redundancy you’d otherwise have to wait longest to receive.

The Insolvency (England and Wales) Rules 2016

@toomba contact ACAS for free advice https://www.acas.org.uk/advice

if they do come knocking, tell them it’s been lost

Lying to receivers, administrators etc sounds a lot riskier than just declining to volunteer information. Maybe I’m just a giant coward.

I came clean and filled in the details on my redundancy claim form. Think they will deduct what’s left to pay from my final payment

My logic is that at the end of the 12 month hire period (it’s a hire) you still don’t own the bike.  So they *could* make you pay the remaining 9 months hire (which you’d be paying without the tax saving) AND then take the bike (their bike) back off you –

Technically perhaps it could be done that way, but has it ever actually happened to anyone?

as they don’t have to offer it back to you for further hire or sale, they can just take it back That means you have paid over the odds for a 12 month hire and have nothing at the end of it.

That would depend on the scheme.

Halfords explicitly state from the beginning that the hire is extended for 4 years for free then ownership transfers. So on that scheme you’ve paid for ~5 years hire and if they took the bike off you then you’d be a creditor looking for 5 years of bike hire and it would be a lot of hassle to resolve when they have a bike there you can just have.

Cyclescheme have more “may choose to” clauses and charge a transfer fee.  But also state that if you leave early then the maximum you should have to pay is the voucher value (i.e. the 25% residual value and transfer fee is waived if you’ve not made many hire payments and therefore paying the bulk of it from gross salary).  The implication being that the company signing cyclostomes template contracts has no interest in keeping the bike at that point, the final payment is in lieu of a transfer fee.

I doubt the liquidators are going to be paying solicitors to pour over C2W contracts.

I believe the terms of mine say if I’m fired or I quit, then the remaining due for the bike will be taken from my pay packet.

This is regardless of an NMW – this is only a consideration over the expected duration of the scheme.

So I would say nothing but fully expect them to deduct the outstanding from my last pay cheque.

Fingers crossed there is enough in the pot to actually get you a final pay cheque at all.