Cyclescheme – I feel robbed

Just finished my lease term on Cyclescheme bike. I understand the scheme really well, this being the second time I have used it.

My work are not offering the extending hire option that Cyclescheme have introduced to sidestep the new tax man fair valuation. (This change came in after I entered the scheme). As a result, I now need to pay 25% of the original value to buy my bike, plus Vat which has now also gone up.

I therefore am paying about £940 pounds for the £1000 bike. Not quite how the scheme was meant to work eh?

It also winds me up as I am one of the few genuine uses that does actually CYCLE TO WORK every day on the bike that I got from the scheme!

I should have got the bike in the sale, would have been cheaper.

What was wrong with your previous bike that you got through cyclescheme? Not sure that bikes just last a year then instantly fall to bits. The scheme is not as good as it used to be because too many people ripped the arse out of it….

i don’t see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.
you still had interest free credit over a year and saved £60

What was wrong with your previous bike that you got through cyclescheme

You assumed it was a year old. My previous bike was 3 years old when I got my new one.

I wish I ended up with £60 in my pocket when I got robbed…

i don’t see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.

I’m fairly sure that as Self Employed you can off set your bike purchase against your tax if you use it for getting to and from work.

As a scheme it increases bike sales – good for the economy
Gets people out on bikes – good for their health

The change in the scheme aligns it with the tax system really so more a clarification than a change. It’s a pity that your employer does not go for the extension.

And what was wrong with the three year old bike that it couldnt get you to your work?

i don’t see why full time salaried people should get a tax break on buying a bike when self employed people or those looking for work cannot.

I can help you with understanding that. The scheme is aimed at getting more people to ride to work, improving fitness and reducing car dependency. The unemployed aren’t going to work or paying tax so they’re out. I’d agree that it seems a bit unfair that the self employed can’t use the scheme. However, I’d say you have plenty of tax breaks already, no?

only skim read this at best

but a bit baffled as to how getting a discount of any percentage can leave someone feeling robbed

As an addendum, I’d say that the scheme has been a success in my workplace. I’d say about 50% more cyclists, which is great IMO.

And what was wrong with the three year old bike that it couldnt get you to your work

Sometimes you really are boring. The scheme doesn’t require you to prove that you don’t have another available bike. I replaced it for the same reason that people replace their cars, bikes or whatever. Because I could and I wanted to.

I assume the £255 fair market valuation stays with my employer (public sector), if so that would probably explain why they want the money rather than offer teh extended lease

Out of interest has there ever been any acountability i.e do you actually have to prove youre using the bike to get to work?

I feel robbed as I was never entitled for it 👿

robbed is maybe the wrong choice of wording.

When entering this scheme, all calculations suggest savings of around 35%. There was no suggestion at the time that there would be any change to fair market valuation. I think this changed should alony impact people who entered the scheme after the change was made, and therefore understood the impact.

Out of interest has there ever been any acountability i.e do you actually have to prove youre using the bike to get to work?

Not in my experience.

but a bit baffled as to how getting a discount of any percentage can leave someone feeling robbed

To use the analogy above, He’d probably have had about £200 in his pocket before the robbery. Cyclescheme charges mean that bikeshops are mostly unwilling to discount, so he lost out on that. Agree that he’s had free credit. Seems a bit off that the clarification was applied retrospectively IMO. FWIW, our scheme is run independently and our final payment is just the unpaid tax, so it’s very similar.

I’d urge anyone using cyclescheme, halfords etc. to look at running things through accounts, as it’s cheaper and pretty easy to do. Seems a shame that people are losing out so third parties can cream off a bigger profit.

Frank, we had this at work recently. Friends came to me just because they see me as all things bike! Anyway, with the help of the staff travel coordinator, we managed to get things changed so we were offered extended lease, p11d or fair market value. That was LA as well.

I’d suggest that fair market valuation of a bike that is a year or so old would be more thatn 25% so think yourself lucky they dont ask you for what it’s actually worth.

I can help you with understanding that. The scheme is aimed at getting more people to ride to work, improving fitness and reducing car dependency. The unemployed aren’t going to work or paying tax so they’re out. I’d agree that it seems a bit unfair that the self employed can’t use the scheme. However, I’d say you have plenty of tax breaks already, no?

whatever the aim of the scheme it was exclusive rather than inclusive,the people it was aimed at could probably afford a bike already, from a tax spending point of view the money would be better off spent elsewhere.

i was about to say something about the unemployed wanting to work but lacked the conviction to say something on the behalf of the idle 🙂

any tax breaks i have are between me and my accountant.

I’d troll at any given opportunity

FTFY 😉

from a tax spending point of view the money would be better off spent elsewhere.

That’s easy to claim for most things though. I’d say it’s better spent on cycling than laptops and twin cab utes for example 😉

the people it was aimed at could probably afford a bike already

Not IME, most of the people at our place who bought a bike were on way less than the national average.

Why don’t you ask your employer to simply extend your hire agreement for a bit longer, or alternatively process the ownership payment as a P11d benefit in kind which means you pay tax on the fair market value instead of the full value.

A few numbers for the fact fans:

1. 73% of people who do the scheme are basic rate tax payers.
2. 87% of people who have done the scheme have noticed improved health.
3. 61% of people who have done the scheme did not cycle to work before.

I know the scheme is not policed but I know of a lot of people who have used it to purchase bikes who would not have otherwise done so. That results in more people cycling, better health, reduced car use blah blah blah.

The scheme is/was a great way to get people cycling.

My beef here is the change to the rules half way though. Doesn’t seem fair when you have entered an agreement with a clear understanding of what you should expect to pay.

Final complaint is that £255 is coming straight off next months pay slip, little warning and a fair chunk of money to be deducted at short notice.

Does contract law not apply to the scheme?

I’m very surprised that if your doing it through Cyclescheme that your employers have a say in how Cyclescheme administer the extended hire period. I thought during the extended period ownership of the bike was transferred from your employer to Cyclescheme themselves. I’d certainly think it’s worth ringing Cyclescheme to see if they can clarify or perhaps talk to your employer.

Just finished my lease term on Cyclescheme bike. I understand the scheme really well, this being the second time I have used it.

apparently you don’t! You have made the common misconception of the scheme based on some marketing material from Cyclescheme!

The scheme works like this. Company buys a bike. Company leases the bike to you (tax free). Your company can set the lease amount at anything it wants – but most use 1/12th of the value so they get their money back over a year. At the end of the year the company owns the bike. You can continue to lease/ use this foc if they agree. You can buy it at fair market value. or they can dispose of it however they wish (the give to cyclescheme and let cyclescheme lease and sell to you
option falls into this – but they could scrap them, stick them on ebay etc).

As a result, I now need to pay 25% of the original value to buy my bike, plus Vat which has now also gone up.

you are under no obligation to do this – you can “walk away”. In some cases they’ll flog the bike – in others they will just let you keep using it.

And yes Snaps contract law does apply – just its based on the actual contract not the imaginary one that people seem to think they signed…

Just had my email off the chaps at CycleScheme this week, looking for another £70 then it transfers to me fully (in three years time).
Happy …
… Unless the contractual goal posts move again in the meantime !!!

you are under no obligation to do this – you can “walk away”. In some cases they’ll flog the bike – in others they will just let you keep using it.

My works scheme charges more to walk away from the scheme than it does to purchase the bike from them

Not sure why so many folk are bumping their gums about it…£940 is still less than £1000 on the bike AND you didn’t need to stump the cash up all in one go.

I think the Cyclescheme is a great idea but it’s been royally abused by most users of it as they see it as an easy way to get a new bike without paying full price (or for those who have really bent the rules, new bikes parts to build their bike). As much as it is going to sting, the fact it’s been raped for all it’s worth by so many suggests it does need to get tougher to stop folk abusing it…it’s a privilege not a right.

I’d love to get a bike on the cyclescheme but due to childminding timings, I can’t ride to work as I’m unable to get to collect my daughter in time…plus my benefits are being spent on other things so it would be a toy rather than a means-to-an-end for me…so I’ve not gone for it.

Totally agree with the OP. What a crap scheme. Was originally sold as getting you a bike for about 40% of its rrp. Now they’ve changed it to (almost) an interest free credit scheme. Pointless. Glad i had to replace my bike just before my co introduced it, or I’d be riding on a slightly discounted £1000 road bike instead of a half price £2500 one from crc!

Hang on a minute! What the recent tax change meant was that if your company chose to give you the bike for the nominal charge that they used to levy (say £50) you would be liable for tax on the difference between that and the fair market value, set at 25%. So there is no way you should be being charged £255. They could give it to you for nothing and you would then owe the taxman tax on £250 at your marginal tax rate – which would be £100 if you are a higher rate taxpayer. Or they could continue to charge the £50 and you would owe £80 tax.

Falkirk-mark: My works scheme charges more to walk away from the scheme than it does to purchase the bike from them

I don’t understand that – do you mean at the end of 12 months (or however long your scheme operates for) that your scheme is charging you to walk away? I don’t see how that fits within the HMRC rules?

I do not have the letter to hand but I think it was a disposal fee (our company has an external company doing the paperwork/admin side) TBH its not a major issue as I only had to pay £130 on a £1000 bike. IIRC the disposal fe was £250

i can’t actually use the scheme myself but it amazes me how many people are bitter and twisted that they can’t and others can 😛

i can’t actually use the scheme myself but it amazes me how many people are bitter and twisted that they can’t and others can

Yeah some ugly responses on here from some of the usual unpleasant suspects.

Not sure why so many folk are bumping their gums about it

The OP said that changing the guidance after he’d started the scheme was the issue. Totally fair point IMO, I imagine everyone would feel aggrieved by that.

I think the Cyclescheme is a great idea but it’s been royally abused by most users of it as they see it as an easy way to get a new bike without paying full price

How is that abuse? That’s the point of the scheme, to encourage people to cycle by providing
a financial incentive. I suppose they could have spent the cash on lots of pro cycling leaflets though, I’m sure that would have been a better option…

As much as it is going to sting, the fact it’s been raped for all it’s worth by so many suggests it does need to get tougher to stop folk abusing it

It hasn’t got tougher to stop the abuse though, for many people it’s become pointless since they could get a better deal outside the scheme. My theory is that it’s got tougher because the country is in a difficult place financially and is saving money where possible. Still a shame though.

plus my benefits are being spent on other things so it would be a toy rather than a means-to-an-end for me…so I’ve not gone for it.

Can you see why it’d be a boon for someone earning £6.50 an hour though? I do wonder how many people make negative comments because they don’t benefit directly from C2W. Though I’m keed to point out that more people cycling is good for all of us.

Have a look at the stats on this thread, it has had a positive effect

Can you see why it’d be a boon for someone earning £6.50 an hour though?

They’re probably not eligible, you can’t do salary sacrifice if it would take your salary under national minimum wage. That’s why the scheme is so flawed, unavailable to those who might really benefit, biggest discounts to those who don’t really need it (higher rate taxpayers)

and another thing!

My gross deductions are 12 x £70 and then when I add on £212 fair market value (amount before VAT) that means that my employer has recovered £1063 for a £1000 voucher. Not bad going when you think that they would have already recovered the VAT on the initial purchase!

They’re probably not eligible

At £6.50 I think they would be able to spend 57p per hour worked on C2W, so assuming a 40hr week they could get a bike for around £400? I agree it’s flawed in that area but it’s much better than nothing 🙂

I think we need to remember that Taiwan probably produces these bikes at ‘tuppence each’. 🙂