Reaching the end of the year and received an email “What happens next?”
Oh, so this clears things up:

We will shortly be in touch to offer you the following 3 options.
1. Cyclescheme’s Extended Use Agreement (EUA)
Pay a small, one-off, refundable deposit (3% or 7% of the equipment value) and continue to use the bicycle for an extended period of up to 36 months.
3% OR 7%?? up to 36 months??

At the end of this period, … Cyclescheme may at its discretion, offer ownership of the bicycle to you ..
At its discretion??

2. Alternatively, you can take ownership of the bicycle for a much higher valuation.
£200? £300? £1000000???

Why can’t they just give FACTS?

“1. Cyclescheme’s Extended Use Agreement (EUA)
Pay a small, one-off, refundable deposit (3% or 7% of the equipment value) and continue to use the bicycle for an extended period of up to 36 months.”

because the % varies depending on the time the EUA is taken over.

Also if they give you specifics it turns into a hire purchase agreement which it is not.

IIRC they can’t say that you can definitely have it at the end because then it becomes a taxable job perk.

They can’t say they definitely will offer it to you at the end of the scheme because then it could be seen as a loan or HP agreement rather than a bike hire scheme.

Good points chaps. Thanks.
So the “Much higher valuation” – can’t they say what this is?

nope because it becomes a HP agreement.

reality is your company will either let you have it on a EUA or at a favorable rate.

mines just stuck it on a EUA and havnt charged anything 😀

Can’t imagine what mine are going to do, I don’t think they even know about the EUA.

my employer used to ‘sell’ it to you at the end for 5% of original value.

I didn’t have to pay at the end. Don’t know if I even officially own the bike but I’ve had it for many years now. 🙂

i signed up for the extra 36 months for £40 i think. It then automatically transfers to my ownership at the end.

After every year, the “much higher valuation” decreases. If you buy it back at the end of the initial lease period you now don’t actually save any money, unless you’re a 40% tax payer and/or got the VAT off too.

Not planning to buy it back – but I have a feeling that’s the only option they will give me (or try to).

They offered me to dispose of it or to pay them a failry high disposal fee to return the bike. I wasn’t going to pay that so disposed of it.

They don’t have to do any of this. Its perfectly legal to just give it to you, then pay tax on the value set out by the HRMC.

The max value I think they have in their charts is 25% for a 1000 pound bike after 12 months, so you’d pay 20% or whatever of 25% – about 50 quid.

The max value I think they have in their charts is 25% for a 1000 pound bike after 12 months, so you’d pay 20% or whatever of 25% – about 50 quid.

Are you sure that’s not the old advice? I seem to remember they changed it since I got mine.

I’m in trouble if they want mine back at the end of the 3 years – I don’t have much of it left.

I bought this:

But there’s no way they’re getting this back:

I think HMRC are starting to get a bit stricter with scheme like this, as they have realised a lot of people are taking the piss. I’d be amazed if it didn’t get scrapped eventually.

Are you sure that’s not the old advice? I seem to remember they changed it since I got mine.

Had a quick check…

http://www.hmrc.gov.uk/manuals/eimanual/eim21667a.htm

“In either case, as long as any payment that the employee makes for the cycle is equal to or more than the market value, there will be no tax charge under the employment income rules. If the employee pays less than market value, the difference will be taxable as employment income. “

In other words, you’d pay tax on the market value, the maximum market value is 25%

well that was silly wasnt it muzzle

I’ve just had a letter about my last one.

Pay £250 as a one off payment and it’s mine, or add £250 to my taxable benefit for the next tax year and pay tax on that, which in reality adds next to bugger all as I’ve got a company car anyway.

Are you sure about this bit though? I thought they changed it to a more realistic market value.

In other words, you’d pay tax on the market value, the maximum market value is 25%

well that was silly wasnt it muzzle

Nah, it’s much more fun to ride now 😀

Are you sure about this bit though? I thought they changed it to a more realistic market value.

Yes, its further down in the link up there. (Remember its the value to the company with their disposal costs etc.. not what you can get on ebay)

Also explains the 3% or 7% clause – its 7% if over 500 quid. THis effectively transfers ownership after 36 months, and you don’t even need to be employed by your company for this to happen.

its 7% if over 500 quid

Ah, that makes sense – I thought that the EUA was fixed at 36 months.
So £70 and I keep my CAAD-X for 3 years. Sounds ok.
We’ll see.

What did you do Muzzle – sell the Cube? Surely that’s illegal if you don’t own it? (Nice Handjob btw)

What did you do Muzzle – sell the Cube? Surely that’s illegal if you don’t own it? (Nice Handjob btw)

Cheers! Bought the Cube, changed the fork to a Reba a few months later. Upgraded various other bits over the next few months, then bought the Handjob frame and transferred everything to that and sold the Cube frame. Been a bit of an evolutionary process to move from one bike to another. Current bike has the original wheels, saddle, brakes, cranks, chainring/derailleurs… and erm, that’s it I think.

Not sure Cyclescheme would officially condone it, but I’m not too worried that it’ll be any sort of a problem at the end of the 3 years…

Not sure Cyclescheme would officially condone it

Er, I think we know the answer really!

I’ve just found that the 2014 version of my CAAD-X has discs… ARGH!

Just got the final figures through –
£237 to buy the bike
£66 to continue Cyclescheme with it for up to 36mnths.

What to do what to do…. doesn’t say how long I have to decide…