Cyclescheme – It’s all in the detail

I have done a few Cycle2Works in the past and still have the bikes to commute to work on…..nobody has ever asked for them back. I was getting a bit of shinyitess so enquired if work was still involved in a scheme. Turns out they are but it is now Cyclescheme, after a bit of back and forth with HR after seeing that the limit is 1k it is now 9.5k which opens many opportunites. The problem is that the wording in the doc is very different. It talks about the bike always being the property of the company for 12 months and that I need to insure etc. It then goes on to say you need to use this bike for commuting the majority of the time (no problem obvs) and after 12 months the ownership transfers to cyclescheme and you “may” get the chance to buy it.

All of that is a lot more stringent than the wording in the previous Cycle2work experiences i have had. Does anyone have any 2024 dealings with Cyclescheme? I did a search and all that came up were bike choices and pre 2023 threads

We use cyclescheme at our work. It probably says that in the small print but in reality they will send you a voucher, ask for the final payment in 12 months time, and that’s all the interaction you should need to have with them. Whether you choose to comply with the small print is up to you, I would imagine the vast majority of people don’t…

……

They need to phase it like ” may” because otherwise it falls under Hire Purchase legislation.

It’s stupid, but don’t sweat it.

OK then. I guess I dive in at the deep end

They’re not going to want it back at the end, they’d just have a used bike they’d struggle to sell or do anything with worth their time.

It was always the case that it was “hiring” the bike and then at the end of the term you would either buy the bike for a fair market value or hand it back.

So its more covering themselves with the taxman although thinking on it could be fun to set up a cyclescheme and then say “nahhh we aint selling it” and asking for it back.

HMRC give a rough calculator for the fair market price of the bike being (for over 1k) 25% after 1 year dropping to 7% after 4.

This has resulted in a lot of schemes being pay for 1 year and then go into limbo for a few more to lower that price.

It has always been thus.

If I get a discount off the bike from the retailer and also have a lump sum I can use, is it possible in anyones experience to supplement this with a voucher? Or does the voucher have to cover the full bike cost

See the point above about ownership; whatever you pay yourself is essentially written off and your employer could take the bike off you at the end of the scheme without compensating you.

As regards discounts, that’s very much up to the retailer. They’re already being stung by the scheme, who get a lovely commission, paid for by the retailer.

Hmmmm yes, I guess they could. Better to keep the lump sum in premium bonds until the point they ask me to buy it off them I guess

If I get a discount off the bike from the retailer and also have a lump sum I can use, is it possible in anyone’s experience to supplement this with a voucher?

Yes

Or does the voucher have to cover the full bike cost

Theoretically yes, but actually no, assuming you find the right shop.

As stated, it’s bought by your company and you get the tax deduction, after you’ve paid it, you then ‘hire’ it for a set period, usually the same period that the amortisation reduces the assets value to zero for the accounts.

If they didn’t state this, then it would be a taxable benefit in kind after you finished payments, as the bike would have a value that you would have to pay for it.

In short, it’s very much Ts and Cs to make sure that the scheme states its intended purpose up front, i don’t think i’ve ever seen anyone police it, i turn up to work on a bike, not always the one i got, they do have cameras though, damn ;O)

If you look at the small print they also say you can’t change parts etc but they will equally sell bits at the same time.

I treat it like the Pirate Code.

I treat it like the Pirate Code

🙂