Cyclescheme – I feel robbed

I don’t think the whole scheme has been dodgy from the start. We run and administer our own scheme, which has HMRC approval, and seem able to avoid all, or most, of the pitfalls those using a third party facilitator such as Cyclescheme encounter.
What has been wrong is the scheme was miss sold by these companies with particular regard to values at the end of the hire period. They inferred a 5% value was acceptable and can sympathise with people coming to the end of their agreements to find this is no longer the case. The HMRC rules always stated ‘fair market value’ and no value could be agreed at the start of the agreement. They haven’t changed the rules at all – just provided guide values (which in reality are much lower than a realistic fair market value).

I’m with Coleman on this.

A 3rd party cycle scheme is a profit making business. If you want the best deal sort it out yourself.

http://www.singletrackworld.com/forum/topic/cyclescheme-queries

I think i_did_dab has a good idea. Proper discount to the end user, sod all in administration an no cheeky beggars creaming off a big slice of cash for themselves. i think the scheme was half arsed, they call it C2W but no-one checked if you did use it for commuting but then moaned when people bought play bikes with it. It was a half arsed, some people got out on bikes too which is good but I think that was probably secondary to be seen to be doing something green and the aforementioned cheeky beggars who my cynicism says will have been pals of the government.

Oh and my C2W contract was definitley mis-sold to me, fortunatley it was years ago and I didn’t get stuffed with the 25% thing. Certainly won’t bother again.

@rootes1 – your end of hire conditions sound a lot like the pish set of options we were given – work for a large outsourcing company by any chance?

I had a major barney with HR about it, not least of which because they couldn’t advise me at all on the scheme they chose to administer themselves over cyclescheme. every response I got was a c+p from their FAQ, but the point was the FAQ told us bugger all so thats why i was asking 🙁

The 10% to return a bike was ludicrious and whilst no-one in their right mind would take them up on it i pointed out it was patently unfair to hire something for a period and the have to pay to give it back – basically if you wanted to walk away it should have cost nothing, but they were making people pay more for the hire regardless.

I am still very tempted to push their button on the P11D and see what HMRC says but to all intents and purposes the company still own the bike so i presume they would report you and try to recover the bike too? The thing is if you add on the taxable benefit you’d end up paying RRP for the bike so i guess you could lose the lot.

The ultimate irony to all of this is that HMRC don’t offer the scheme to their employees!

OK, it may be that I don’t quite get it and apologies if my ignorance is showing here. My situation is as follows:

Joined cyclescheme voucher malarky. Got a bike worth £1,000. Broadly speaking basic rate taxpayer so should have paid roughly £55 for 12 months = £660 (i.e thats how much it “cost” me. I was also duped in that I believed (and yes I know this wasn’t contractual) that a 5% balance would be due at the end (so £50). hence I receive a £1,000 bike for £710 total.

What actuially happened was that I left my employer after 1 month of going into the scheme. So i had paid £55. My employer then said I was liable for the full balance of the remaining 12 months with no tax relief (£83.33 x 11). Therefore the total I paid was £966.63.

I appreciate that this was in the contract BUT

Then at the end of the period, they ask me to pay either 25% (having changed the advertised /yes non conrtractual 5% to 25%)to own it which meant the £1,000 bike would have cost me £1,216!! Or the cheeky baskets say I can pay 7% of the value of the bike (on a £1,000 bike, I would have then paid £1,036) and I would not even own the bike!!

Surely the 25% and 7% should be on the value of the bike on which I have obtained tax relief, not on the value including where I have received no tax relief?!

Fully expect the usual “haha serves you right” answers but anyone who can provide a useful response would be gratefully received.

And yes, i did cycle to work

I’m afraid that that’s how it works. If you leave your employer during the period, you can’t get tax relief on the remaining payments, but you are still on the hook for them.

The 25% is on the value of the bike that you bought (including VAT), which, taken on its own is a reasonably low valuation for a 1 year old bike. You could try to persuade your employer to charge you less than this, and just pay the tax on the difference.

I’d be very interested to see how the 7% disposal fee thing is worded. One of the features of the scheme is that the hire period can’t include any guaranteed provision for purchasing the bike at the end, so it’d be interesting to see how they word charging you 7% if they don’t sell it to you.

You might reasonably question Cyclescheme on what basis a 5% balance was going to be an acceptable transfer fee (it’s clearly not FMV) but given that they didn’t and couldn’t make any commitment to sell you the bike, it won’t get you very far.

Ok, i’m also on the CTW Scheme – signed up last year in april (prior to the changes), bought a £1400 bike for £1000 as the bike shop were willing to sell there sale bikes on the CTWS.
i came to the end of teh hire period this april aware that the scheme had changed – however, like the OP i though it wouldnt apply to me as i singed up to teh ‘old’ scheme. looking back through the paper work i realised that this is not true – all thats happened is they have clarified the final market value section to the employers.
As it turns out i’ve been using my MTB (2nd bike – not on CTWS) for commuting more and more – as it gives me a chance to get out on it more. to the CTWS bike will be bought from my employer and then sold so i can free up some much needed shed space.
It’ll work out at saving me about £510 over the 15 months of owning it (£1400 minus the £640is hire period and £250 final payment) and i’ll get back £6-700 when i sell it on so i’m not that fussed.

I dont think anyone has mentioned in the previous 3 pages, that the 25% final ‘buy off’ fee reduses the longer you own the bike after the hire period – going down to 0% after about 5 yrs. Each month you own the bike after the hire period that final fee goes down by 0.416%. so my final payment will actually be around 23.75% of original voucher value (£237.50p).

A better way to encourage cycling would be to drop VAT from all bikes and accessories below say £1000.

Do you really believe the manufacturers wouldn’t put up prices straight away to hit the same price points? 😯

Do you really believe the manufacturers wouldn’t put up prices straight away to hit the same price points?

Do you really believe that it’s not a competitive market? You’ve only got to look at the success of Boardman bikes to see that if you can sell a bike with better kit for less money, you’ll do quite well.

But Boardman are probably the exception to the rule? Cube probably get close in terms of value for money, but it hasn’t exactly had the other manufacturers dropping their prices or upping their specs.

Does anyone else do a full suss with maxle Sektor for £1k? How much more do you need to spend to get a Sektor equipped big brand bike? £400 more? £500 more? At what price is the first maxle Sektor/maxle Reba equipped Specialized or Giant or Trek????? They’re all trading on their brand name and pointless ‘innovations’ like press fit bb’s that offer nothing to the average biker, like improved durability and ease of replacement/maintenance.

Someone somewhere is making a big fat mark up. Either that or there are too many middlemen all taking a chunk. Canyon prove that one perhaps.

Rant over 😉

And don’t most ‘lease’ schemes mean you don’t have to pay your own maintenance costs?

Who’d lease a car if they had to pay all the servicing costs themselves on a car they didn’t own?!!!

0% finance or getting last years model is a much better deal. Even for someone just starting out. At least they’re free to sell up and recoup some money if they don’t use it after all