Posted this reply a few months ago – might be of some relevance to your query;
Sorry, don’t work for a council or a large company, but we run and administrate our own HMRC approved cycle to work scheme in house without a third party facilitator such as Cyclescheme.
The company own the bikes, so at the end of the hire period our members can take one of the following options;
1- Continue to use the cycle free of charge, with no further payments.
This means the company still own the cycle and the hirer cannot sell it as technically it is a company asset and HMRC might require to see it if a check was ever carried out.
When the cycle is six years old ownership can be transferred to the employee with no tax liability.
2- If the employee wishes to purchase the cycle at the end of the initial hire period we will sell the bike for, say £1, and they will then be liable for the tax on the balance left between the HMRC fair market value guidelines.
So, on a one year old £1000 cycle a basic rate tax payer will pay 20% on £249 which equates to £49.80 tax liability collected via a P11d ‘benefit in kind’ form. Total cost to transfer ownership £50.80 which will equate to approx. 5% of purchase price.
Handing the bike back to your employer or worse still, the third party administrator, seems a crazy option to me.