Cyclescheme working out final payment…

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  • Cyclescheme working out final payment…
  • ianfitz

    With our scheme (NHS) there is a £50 ‘disposal’ fee after the 12 monthly rental payments.


    Had 2bikes on C2W and the rules changed between the 2 according to our organiser.
    The first one the final payment was £20 regardless of initial value which in my case was £650.
    For the second one the residual value was deemed to be 25% of initial cost so in my case £250
    This was then deemed to be taxable gain for the year so was added to my salary and charged at normal taxable rate and the bike was deemed to be mine.
    Not sure if this is the legal way but its what work decided.
    Work for a Local Authority.


    That flow chart looks what I’ve read before. Is it my employers choice to offer the 3 year extension or am I dealing direct with cyclescheme once the deal is done?

    I did the scheme 4 years or so ago and I just paid a 13 th payment to end the agreement, but I know the rules have got more complex since then


    So I’m looking at getting a cx bike on the c2w for winter commuting…my work is in the process of setting up an agreement which means we can exceed the £1k limit. So I’ll be looking at around £1.5k.

    Now there is a nice calculator on the c2w scheme which works out the monthly costs, but nothing that works out the final payment. The supplier is cyclescheme. I am told by hr it will be tax and NI on 25% of the bikes value. However I’ve read on forums in some cases you can extend the hire period for 3 years, and then it is reduced to 6%. Is this the case? Is it the choice of your employer or does everyone with cyclescheme get this option?

    Confused….if it is the 25% there really isn’t much in it with getting a 2013 bike (if I can find my size)


    I finished my 3 year scheme in January, I was given two options:-

    1. Do nothing, the bike would become mine and I would be liable for the tax on the “fair market value” of the bike as per the HMRC guidance (3 year old bike over £500 initial value = 12% of original value = £120).

    2. Return the bike and pay a collection fee(£80 + VAT).

    I don’t think they wanted the bike. 🙂

    The value of my voucher was £1000 which made the residual value £120, I paid the 40% tax on that = £48.

    For a £1500 bike that would make the value £180 and the final payment £72 @ 40% tax or £36 @ 20% tax but to allow the purchase of a bike over the value of £1000 the employer has to be a licensed credit broker.


    The flowchart is actually for a 4 year deal because you don’t get any option until the first year is complete.

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