# Cycle to Work Scheme - Rip Off.



## Paul Walters (6 Jun 2011)

Cycle to Work Scheme, Cycle Solutions and City and County of Swansea.



Just thought I’d let you out there know of a development here….. myself and a colleague have taken advantage of the Cycle to Work Scheme being offered by Cycle Solutions and administered by the HR department of City and County of Swansea. He bought a bike (Scott P4) and I bought some Hope Vision 4 lights. It is the second time I have used the scheme, and was very pleased with the savings I made in the original tranche in 2008. 



My colleague has now reached the end of his “hire” term and has received a letter from our employer telling him that he has two options:- give the bike back to the “owner” a company called LHE (who no-one here has ever heard of), or to buy it from them at 21% of the original purchase value, unless he can provide documentary proof that the bike is worth less. 



This would be fine of course except that when the scheme was rolled out and presentations given to staff, we were told that the final purchase price would be “no more than the monthly salary sacrifice”. And this statement is still included on the internal email system, and visible for all to see. My colleague was having £27 pcm deducted from his salary, but is now faced with a bill of over £90 if he wants to keep the bike.



I will also have to pay the increased final price on my lights and so challenged this position on the basis that the increased charge does not form part of my contract with my employer, and that any increases imposed by HMRC on current schemes cannot be retrospectively applied to earlier agreements. 



The response I got however was that since HMRC has threatened to fine any organisation that doesn’t comply with their new regime, they have no option but to pass on the extra costs to the individual, and further, that there is nothing in the contract to say what the final charge will be. My suggestion that we have therefore been mis-sold the scheme since we were not made aware of this at the time of the roll out was met with a blank rebuttal.



My question is, is this legal ? It certainly isn’t ethical.


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## Rebel Ian (6 Jun 2011)

"They have no option"

Yes, they do.....they can choose to pay the difference and that's the stance I'd take with them.


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## gaz (6 Jun 2011)

Read the scheme in fine print, it probably says something like 'subject to change with no notice to you' in there.
The scheme rules did change last year.


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## jethro10 (6 Jun 2011)

If it was me, I'd be a bit more pragmatic here.

Is the saving of a few tens of pounds worth pissing of the company that pays my wages in this economic climate?
It's not like you haven't had a good deal at the taxpayers expense already now is it?

Basically it's down to how you think your company will react if you push the point.

Jeff


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## Chris.IOW (6 Jun 2011)

Rebel Ian said:


> "They have no option"
> 
> Yes, they do.....they can choose to pay the difference and that's the stance I'd take with them.



It's not quite that simple as they would then be providing you with a taxable benefit which you would pay tax and NI on. Alright this would still not be as much as the value they are asking you to pay.

I understand the scheme was changed to the final payment having to represent the fair value of the bike (or something along those lines). 

There will be something in the fine print to allow the change I would imagine.


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## evilclive (6 Jun 2011)

Paul Walters said:


> My colleague has now reached the end of his “hire” term and has received a letter from our employer telling him that he has two options:- give the bike back to the “owner” a company called LHE (who no-one here has ever heard of), or to buy it from them at 21% of the original purchase value, unless he can provide documentary proof that the bike is worth less.



The rules did change last year, which means transferring ownership to you at the end of the year became rather more expensive. Cyclescheme's response to this was to transfer ownership to another company (equiv of LHE?), who then transfer ownership to the employee four years later for a rather smaller fee due to the increased age of the bike.

I've seen a lot of confusion caused by this - could the same be happening here? Is the transfer to LHE only for a limited number of years?


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## Bromptonaut (6 Jun 2011)

This has been discussed here before and there are other people including Norm & Chris KH with a more detailed knowledge than mine. 

There could have been an indication of what the price might be *if* the employer agreed to sell the goods at the end of the hire period. Any undertaking to do so would make the lease hire purchase and invalidate the tax concessions. Any price agreed after the end of the lease had to represent 'market value' 

What has happened subsequently, though it's been clear over a year now, is that HMRC have 'clamped down' & insisted that market value is a realistic figure. Frankly the idea that the market value of a year old Brompton for example was £35 or £40 was risible. Some Inspectors were refusing to agree the 'one month' approach and a review was instituted. HMRC's revised approach was to impose a table of values which it would accept - a user would need to justify any lower figure. The table they use is here http://www.hmrc.gov.uk/manuals/eimanual/eim21667a.htm. The bike referrred to in the OP is presumably in the more expensive cost band and around 18months old. 

In the OP's position I'd be asking for the option to extend the lease, on a no charge basis, for a further 2 years. The version of Cyclescheme used here charges a deposit at the end of year one equal to the table value at 36months. That will be refunded if the bike is returned but otherwise ownership transfers to the hirer at the end of the third year. As well as being adminstratively neat this avoids complications if the employee leaves their post.


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## Norm (6 Jun 2011)

It is such a shame that people don't read the regs before signing up. 

You'd think that people would prefer to know the rulesi in advance than to whinge after the event.

And the rules were not changed in any way, shape or form last year. Nothing has been retrospectively applied and trying to say that the final price was agreed in advance will get the whole scheme disallowed. I guess that wouldn't go down well with your colleagues. 

The C2W regs are only a dozen pages and are on the DfT's website, as they have been all along. Have a read before you make yourself look silly.


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## jack the lad (6 Jun 2011)

I have a bike through Cyclescheme. The original deal was to pay 12 'hire' instalments for the first year. Then I had the option to buy the bike for 5% of the purchase price. This is the scheme that has been deemed to be a taxable benefit as the bike will, in fact be worth more than 5%, so it is beng transferred to me at an undervalue.

Cyclescheme have, therefore, changed the scheme so that I will have the option to hire the bike for another 4 years for a one-off payment equivalent to 5% of the purchase price. At the end of that period the bike can then be transferred to me free of charge. The Inland Revenue are satisfied that this is not a taxable benefit as the bike is by then deemed to be worthless.

The net result is that I pay no more and no less. I will own the bike in 5 years rather than 1, but this seems to me to make no appreciable difference to how I use it. I would, therefore, suggest that if your employer has a different solution which costs you more than you expected, you should put this solution to them as one that appears to comply with the original expections and with tax rules.

My employer and Cyclescheme have had to spend quite a bit of time and expense faffing around finding the right words to redefine an existing relationship, for no-one's benefit. I suspect that there is internal rivalry in the IR between the departments responsible for promoting public policy through tax concessions and the departments responsible for closing tax loopholes. This one is a small victory to some @rse in the Inland Revenue who gets their kicks from nit-picking.


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## Tim Bennet. (6 Jun 2011)

What are you whining about? Some people don't even get the chance to have other peoples' taxes subsidise our hobby.

The C2W scheme has been as enthusiastically 'exploited' as any other tax loop hole. It's hard to stomach all the moralising about other people's tax fiddles when we collectively (cyclists) have shown no less restraint in wangling every last ounce of benefit from what has been an (overly) generous concession.


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## jack the lad (6 Jun 2011)

It is undoudbtedly a rather silly waste of taxpayer's money to have the left hand giving a concession and the right hand undermining it. They are not closing any loophole, it is just an exercise in semantics. If they think it is over-generous or is being exploited, just close it to new entrants or redefine it within stricter limits.


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## 400bhp (6 Jun 2011)

Norm said:


> It is such a shame that people don't read the regs before signing up.
> 
> You'd think that people would prefer to know the rulesi in advance than to whinge after the event.
> 
> ...



Spot on.

Mis-sold


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## 2Loose (6 Jun 2011)

Norm said:


> It is such a shame that people don't read the regs before signing up.
> 
> You'd think that people would prefer to know the rulesi in advance than to whinge after the event.
> 
> ...



Very true, although most of the mis-selling has been at the employers end, rather than at HMRC. Unfortunately, a lot of the companies are back pedalling and blaming the changes on HMRC, rather than their own misinterpretation. 

LHE are asking 21% of the value as a final payment, but blaming HMRC.	
HMRC only really want the tax payable on that 21% (which would be about a months salary sacrifice)...but I am guessing that LHE aren't setup to process only the taxable amount and therefore ... profit!


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## smokeysmoo (6 Jun 2011)

My employer won't even entertain the C2W scheme. If yours does, and you have exploited it succesfully - keep peddling and keep smiling as you're one of the lucky ones


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## Bman (6 Jun 2011)

Well, when it comes down to it, I'm sure I can make my bike look cheaper/less appealing than it is. 

Bit of duct tape/mud on the frame. Maybe pop a spoke and tube or two. Liberal coating of WD-40 on the chain and leave it outside for a week. 

That should do it. I should save more money by doing this, then replacing a few spokes, tubes and a chain, than paying the full "Market Value" of the bike in one year. 

Oh, I get a new chain out of this too. It'll probably have stretched by then anyway....


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## Paul Walters (6 Jun 2011)

My point is not that I have not had a good deal. I consider an 18 month interest free credit agreement a good investment. And I am cerainly not whinging about the cost.

What I am (justifiably) annoyed at, is that my employer made the statement in a presentation to staff when they were pushing this scheme that the final payment will _not be more than the monthly payments_. My contract was with them, irrespective of what the HMRC then does, I consider that the original agreement takes precedent, and that they are therefore in breach of contract.

Of course, I will re-read the 8 pages of light grey 6-point font contract, and I fully expect to find some term telling me they can do what the Fcuk they like without telling me.

The increased cost is not the issue here. It is a principle of contract.


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## Paul Walters (6 Jun 2011)

Norm said:


> It is such a shame that people don't read the regs before signing up.
> 
> You'd think that people would prefer to know the rulesi in advance than to whinge after the event.
> 
> ...




This scheme was pushed hard by my employer and Cycle Solutions and a number of very searching questions were asked during the roll out. My job involves dealing with contracts on a daily basis, and in the main, I do read the "small print". In this case, however, since it was a scheme heartily endorsed by my employer, I felt there would be some form of vetting by the HR/payroll department prior to entering into the contract with the supplier. It is now apparent however, that like most other things arranged here, they can't get a thing right. I have learned my lesson here, and now distrust my employer more than ever before. And I am not whinging. I feel aggrieved that I have been lied to.


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## exbfb (6 Jun 2011)

My own situation is far simpler.

At the end of the hire period, they give me the bike as a benefit in kind.
I pay tax and NI on this benefit in kind.
So, a couple of quid a month in year two.

For that plus under £20 a month in year one, I have a bike I wouldn't have gone out and bought.

I'm happy.

All the folks who didn't get into the deal have now had a think about it and are wishing they had.


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## GrumpyGregry (6 Jun 2011)

Paul Walters said:


> This scheme was pushed hard by my employer and Cycle Solutions and a number of very searching questions were asked during the roll out.



Apart from the ones that sounded like "Isn't this too good to be true?" and "What happens if HMRC wise up?" It was. They have.

Never base anything long term on a tax break; they never last.


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## Norm (6 Jun 2011)

In addition to Greg's comment...


Paul Walters said:


> The increased cost is not the issue here. It is a principle of contract.


As I said, had you read the tax regs, you'd have seen that they aren't even allowed to agree to sell the bicycle to the hirer in advance (_resulting agreement is likely to be a hire purchase agreement in which case the tax exemption available for a loaned cycle may not be available_) and you'd have seen that the final payment must be at market value (_to prevent a taxable benefit in kind arising as a result of the transfer of ownership the employee must pay the employer the full market value of the equipment_).


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## Norm (6 Jun 2011)

Paul Walters said:


> It is the second time I have used the scheme, and was very pleased with the savings I made in the original tranche in 2008.


I take it that you have declared the difference between your purchase price and the actual market value on your previous bike. 

To do otherwise could be tax evasion.


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## Paul Walters (7 Jun 2011)

Norm said:


> I take it that you have declared the difference between your purchase price and the actual market value on your previous bike.
> 
> To do otherwise could be tax evasion.



My tax code has been amended to take this into account - by £7.40.

My grievance is that the whole thing was pushed hard, and the nitty-gritty glossed over by my employer. I suspect this was due to pressure from the supplier to sell bikes to a captive market, and the blind naivety that seems to pervade our HR dept.

Yes, I could have read the Tax Regs before entering the agreement, but the presentation was made on the basis of "it's all been sorted by us".... like I said, I won't be fooled again.


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## pshore (7 Jun 2011)

I too don't fully agree with the way the changes were being rolled out to existing cycle purchasers. I didn't want to sign up for another 4 years of contract, and I disagreed with the way the 25% hmrc change was being used to extort additional money out of cycle purchasers. 

I proposed another solution to cycle scheme which was for me to save tax on 75% and pay tax on 25% but they didn't go for it. We are now at an impasse, but I have the bike and they will have to take me to court if they want a resolution. They have stopped chasing me.


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## Paul Walters (7 Jun 2011)

Norm said:


> In addition to Greg's comment...
> 
> As I said, had you read the tax regs, you'd have seen that *they aren't even allowed to agree to sell the bicycle to the hirer in advance* (_resulting agreement is likely to be a hire purchase agreement in which case the tax exemption available for a loaned cycle may not be available_) and you'd have seen that the final payment must be at market value (_to prevent a taxable benefit in kind arising as a result of the transfer of ownership the employee must pay the employer the full market value of the equipment_).




Perhaps I should advise them of this ? 

The following statement is _still _on our staff intranet bulletin 

"_*at the end of the loan period you may have the option to purchase the equipment......... This would not exceed the equivalent of one months' salary sacrifice before tax". 

*_OK, I understand that the word "may" is in there, but as I said, all this was glossed over in the roll out, and I feel like I've been mis-sold the scheme.


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## youngoldbloke (7 Jun 2011)

To go off at a tangent for a moment ..... has any survey ever been conducted to ascertain how many 'cycle to work' bikes are actually used for that purpose?


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## philipbh (7 Jun 2011)

Paul Walters said:


> I feel like I've been mis-sold the scheme.



Yet you (and your colleague) have made savings and had the benefit of the bike - so its not all bad

Option 1 - just hand back the bike at the end of the scheme - make it their problem (LHE*)

Option 2 - re frame the problem by imagining the original agreement was over 21 months and not 18 - the "final payment" equivalent to three months salary sacrifice

Option 3 - your colleague could agree to the 90 and ask to pay it over three months perhaps

* I wonder how long before there is a secondary market for "ex cyclescheme bikes"?


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## Paul Walters (7 Jun 2011)

philipbh said:


> Yet you (and your colleague) have made savings and had the benefit of the bike - so its not all bad
> 
> Option 1 - just hand back the bike at the end of the scheme - make it their problem (LHE*)
> 
> ...



He's decided that he'll keep the bike, but is advising LHE of the "wear and tear" it has suffered so that the final price will drop. I haven't bought a bike, but lights, so there's not much wear and tear will apply I suppose.


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## Red Light (7 Jun 2011)

Rebel Ian said:


> "They have no option"
> 
> Yes, they do.....they can choose to pay the difference and that's the stance I'd take with them.



You'd still be liable for the benefit in kind tax on that difference payment. 

Unfortunately HMRC tightened up on the rules on the final value payment so while what the OP was told was common at the time, its no longer allowed.

There are ways out. An easy one is to extend the loan of the bike for several more years at no cost and then pay the much reduced final value then. The approved final value with age is listed by HMRC. There are other options that people like Cyclescheme have worked out too.


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## John the Monkey (7 Jun 2011)

I got a Brompton S6-L on our scheme, and the application of the regulations changed during the "hire" period for me too.

The saving wasn't so great as it would have been, but it was still a saving, and there was no way I'd have got this bike without the scheme.

The Brompton is fantastically versatile, and I ride it on days I need to work later than usual (so's I can hop on any train, even the bike unfriendly ones) and in the depths of winter, when I don't fancy the "long" commute. Outside of commuting duties, I run short errands on it every now and then.

I feel C2W is a bit of a kludge, and the government should look at specific legislation to enable bike commuting (along similar lines, but without the "you're hiring the bike for a year, wink wink" bodge). But I'm not unhappy with my experience of it at all.


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## Jezston (7 Jun 2011)

Norm said:


> It is such a shame that people don't read the regs before signing up.
> 
> You'd think that people would prefer to know the rulesi in advance than to whinge after the event.



The 'rules' as presented by HRMC are complicated, often unclear, and full of holes and unanswered questions.

The rules as presented by those administering cycle schemes, particularly before the 'clarification' last year were very clear and also apparently very wrong. I think it's rather harsh to criticise those who took out the schemes because they based their decision on the information as presented to them by the organisations running the schemes.

The big thing that still sticks in my mind as a major issue of the scheme is insurance. Why is it, if the bike does not belong to the employee, does the employee have to insure it as their own possession? What happens if it gets stolen?


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## philipbh (7 Jun 2011)

Paul Walters said:


> He's decided that he'll keep the bike, but is advising LHE of the "wear and tear" it has suffered so that the final price will drop. I haven't bought a bike, but lights, so there's not much wear and tear will apply I suppose.



How will he arrive at a valuation ? 

Apologies - this can be calculated from the table in the link earlier on


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## Jezston (7 Jun 2011)

I didn't realise you could just buy a set of lights on cycle to work - I thought you had to buy a whole bike?


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## pshore (7 Jun 2011)

Jezston said:


> The 'rules' as presented by HRMC are complicated, often unclear, and full of holes and unanswered questions.
> 
> The rules as presented by those administering cycle schemes, particularly before the 'clarification' last year were very clear and also apparently very wrong. I think it's rather harsh to criticise those who took out the schemes because they based their decision on the information as presented to them by the organisations running the schemes.
> 
> The big thing that still sticks in my mind as a major issue of the scheme is insurance. Why is it, if the bike does not belong to the employee, does the employee have to insure it as their own possession? What happens if it gets stolen?



I agree with you 100% Jezston. 

The scheme on paper is written up as a hire but is more like hire purchase, but they can't on paper say it is HP because the tax free element could not be used (as I understand it).

However, it is not a hire scheme. If there is a mechanical fault you cannot give the bike back and get another one like you can if hiring a car. Same for maintenance. 

Also, being committed to hiring for 12 months at a cost which covers the full cost of the bike. If you thought there was a reasonable chance of you NOT being offered the bike at the end, you wouldn't sign up would you ? 

There is an expectation that this scheme is a purchase, not a hire, regardless of what is written down. That is why it is mis-selling and is why I don't believe that contract will stick if tested in a court.


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## Paul Walters (7 Jun 2011)

pshore said:


> I agree with you 100% Jezston.
> 
> The scheme on paper is written up as a hire but is more like hire purchase, but they can't on paper say it is HP because the tax free element could not be used (as I understand it).
> 
> ...



I have now re-read the fine print, and find all of the above to be the case. I am now certain I have been mislead. There was always the expectation that the bike (or in my case lights) would eventually be mine....... and that certainly was the only reason I sigen up to it...... the hire terms are so onerous that otherwise, I wouldn't have bothered.....


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## marinyork (7 Jun 2011)

John the Monkey said:


> I got a Brompton S6-L on our scheme, and the application of the regulations changed during the "hire" period for me too.
> 
> The saving wasn't so great as it would have been, but it was still a saving, and there was no way I'd have got this bike without the scheme.
> 
> ...



A very sensible post.


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## suecsi (7 Jun 2011)

marinyork said:


> A very sensible post.



+1

I think if I paid the 25% in January/February next year, I would still be looking at a saving of £250.00 on my Brompton M3L, which isn't to be sniffed at.


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## Bromptonaut (7 Jun 2011)

John the Monkey said:


> I got a Brompton S6-L on our scheme, and the application of the regulations changed during the "hire" period for me too.
> 
> The saving wasn't so great as it would have been, but it was still a saving, and there was no way I'd have got this bike without the scheme.
> 
> ...




+1. I'm in same position with an M6R. Paid for over 12 months from May 2009 and now on extended free hire.

Original deal with employer was that they needed a shop valuation to support market value - local HMIT is a stickler. Now moving over to the Cyclescheme system where, at end of year one, the bike reverts to the scheme company and the hirer pays a 'deposit' equal to the table value at year 4. Deposit refunded if bike is returned before yr 4 otherwise ownership passes to hirer at that point. In practice it's now mine to do with as I wish. 

I suspect some of the problems are down to fact that C2W is owned by Dept for Transport but impinges on tax which is the bailiwick of HMRC. Inter departmental sensitivites seriously engaged!!


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## evilclive (7 Jun 2011)

Bromptonaut said:


> Original deal with employer was that they needed a shop valuation to support market value - local HMIT is a stickler. Now moving over to the Cyclescheme system where, at end of year one, the bike reverts to the scheme company and the hirer pays a 'deposit' equal to the table value at year 4. Deposit refunded if bike is returned before yr 4 otherwise ownership passes to hirer at that point. In practice it's now mine to do with as I wish.



Actually with C2W the deposit may be refunded if the bike is returned before year 4, but instead you have to pay a disposal fee which happens to be the same amount.

They're really quite keen not to get into the second hand bike business :-)


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## Norm (7 Jun 2011)

Jezston said:


> The 'rules' as presented by HRMC are complicated, often unclear, and full of holes and unanswered questions.


I don't agree with that. 

The original guidance was only 22 pages in total and was the most straight forward tax-related government document I have seen. For instance:
"_There should be no automatic entitlement for the employee to take ownership of the cycle and cyclists’ safety equipment at the end of the loan period_"



Jezston said:


> The rules as presented by those administering cycle schemes, particularly before the 'clarification' last year were very clear and also apparently very wrong. I think it's rather harsh to criticise those who took out the schemes because they based their decision on the information as presented to them by the organisations running the schemes.


I think it's very strange to criticise, as you do, the "_rules as presented by those administering cycle schemes_". Unless you have reviewed a variety of alternatives to produce the assertion that they are "_apparently very wrong_", you are going on hearsay and a few negative examples. All cyclists jump red lights and knock down old ladies on pavements.

However, there is only one set of guidance from the government.



Jezston said:


> The big thing that still sticks in my mind as a major issue of the scheme is insurance. Why is it, if the bike does not belong to the employee, does the employee have to insure it as their own possession? What happens if it gets stolen?


Again, I refer you to the guidance (Can you see now why I recommend that people read it? The answers are in there)


> *12. Insurance
> *Employers and employees need to consider insurance. Even though employers own the cycles and safety equipment, it may be more practical for the employee to have the cycle covered under their own house and contents insurance as long as they advise their insurer that their employer has an interest in the cycle. Alternatively, the employer may consider adding them to their insurance agreement with their own insurers. This needs to be determined and set out in the agreement between the employer and the employee.


So, the employee doesn't have to insure it but insurance is something which needs to be considered so no-one should be in any doubt _"what happens if it gets stolen_".

If you have an issue with your employer's implementation of the scheme, then that's between you and your employers. 

However, the title of the thread is "Cycle to Work Scheme - Rip Off" and that is, IMO, very wrong.


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## Soltydog (7 Jun 2011)

The scheme is not a rip off, but I understand where the OP is coming from. My employer has run the scheme a few times through cycle solutions. The first scheme there was no final payment  so i guess the company still own my Allez 
The last scheme they run that has finished ended with 1 month +VAT payment to purchase the bike & we'll see what happens with the current schemes & the new guidance from HMRC, although they have just opened the scheme again & the leaflet from cycle solutions has across the top of it save upto 46% on a new bike, so it is somewhat misleading & inside on the various bikes listed it has figures for "your total cost" Surely any final payment should be part of your total cost ??


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## Jezston (7 Jun 2011)

Norm said:


> I think it's very strange to criticise, as you do, the "_rules as presented by those administering cycle schemes_". Unless you have reviewed a variety of alternatives to produce the assertion that they are "_apparently very wrong_", you are going on hearsay and a few negative examples. All cyclists jump red lights and knock down old ladies on pavements.



Wow. What? 

I'm basing it on the rules as presented to myself, my colleagues and friends who have signed up to the scheme 'pre-clarification', and so many people on here who have said they were told under the scheme that they would pay £x a month then at the end they'd pay no more than a month's worth and the bike is theirs - and then found out at the end of the scheme - post-clarification - that was actually wrong.

That's what we were told would happen, that was what we expected to happen, that isn't what happened. It's not really fair to criticise those who fell victim to being misinformed by the people who run the schemes, because we never read the official DFT Guidance that I'm sure few of us knew anything about.


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## Norm (7 Jun 2011)

Even worse than I suggested.

You are throwing out a blanket dismissal of all those who have administered cycle to work schemes on the basis of *one *specific scheme.


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## 2Loose (7 Jun 2011)

I am with Jezston and many others on this one. 


Although I appreciate the scheme for what it is in reality (I've been through it almost twice now) , the way it is 'sold' to staff by employers is generally by glossing over any potential issue and using much simplified bullet points;

You WILL most likely pay only 5% of the original price as a final payment after 12 months.
You WILL most likely save 40% of the total price over the 12 months.

etc. etc.

It reminds me of the poor pension and insurance advice given out pre-regulation in its simplicity and misdirection.

In an employer-employee relationship there is normally a great deal more trust than when dealing with a financial adviser, so small print is rarely looked into. Also, paperwork shown merely references the hmrc guidance, rather than showing the full 22 pages(?) for the employee to scrutinise.

Fortunately for me, I adhere to the 'if it looks too good to be true, it probably is' school of thought and read up and around the subject before anything is signed, so I was aware of the real way it worked from the beginning, rather than the way it was presented to me.

Point of interest - it always seems to be HR staff\departments who handle this kind of thing, rather than financial staff who would be better placed to explain any potential shortcomings.

Anyhoo - although I love the scheme and have benefited from it immensely,. all of the negative comments I have ever seen regarding the scheme are to do with the way it was explained and their expectations not meeting the reality. 

This site and others go some way to help explain the scheme in actuality...unfortunately it is often the case that the scheme has already been entered into before the knowledge is found. 

This is not the schemes fault, nor hmrc's. However I really think that the selling could be better explained and regulated at the employer end.

Two other things: Shouldn't all c2w stuff be in commuting? Also, as this type of stuff comes up quite often, perhaps a Sticky would be informative...although that would be a whole lot of Stickies...


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## Alembicbassman (7 Jun 2011)

We need a poll to find out how many C2W users actually do the 50% work related journeys (as per the agreement) on their C2W bikes.

I'm guessing it'll be around 50%

The C2W scheme offered the user the chance of getting a bike less 20% income tax on installments, so if you end up with your C2W bike at anything better than 20% discount you're still on the winning side.

You'd be hard pressed to get the same deal in a shop. 20% discount plus interest free credit.

I just pay cash for my bikes, I get up to 50% discount off RRP if I shop around


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## mangaman (7 Jun 2011)

I chose to avoid our CTW scheme as the tax issue was coming to a head.

I find it hard to sympathise with the OP (sorry) - but you've already been through the process twice - and are still paying below the odds for bikes and accessories.

I find it a bit much to blame your employer. You still have a bargain now it seems to me.


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## pshore (7 Jun 2011)

Norm said:


> I don't agree with that.
> 
> The original guidance was only 22 pages in total and was the most straight forward tax-related government document I have seen. For instance:
> "_There should be no automatic entitlement for the employee to take ownership of the cycle and cyclists’ safety equipment at the end of the loan period_"



But it is not that straight forward.

What I find most odd about the scheme is that scheme administrators are following the rules as laid down by the HMRC, but the HMRC are still turning a blind eye to the fact that this is a hire scheme (on paper) and is being used as a route to purchase a cycle. I asked my scheme administrator how many people had handed their bikes back at the end of 12 months, out of thousands of hires - none.

The HMRC normally close loop holes used to abuse the tax system and this is one area that could be 'clarified' leaving a lot of unhappy purchasers.

Another route to unhappiness will be if a scheme administrator goes bust. The debt recovery firms will not be offering the bikes to the purchasers at the end of the hire period because they can probably get more for them through auction. (I still think 25% for some bikes at 12 months is undervaluing them).

So, even if you read all the small print and enter into this scheme, you are taking quite a risk. Personally, it is not one I would take again.


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## Jezston (7 Jun 2011)

Norm said:


> Even worse than I suggested.
> 
> You are throwing out a blanket dismissal of all those who have administered cycle to work schemes on the basis of *one *specific scheme.



No I'm not. Norm, I'm not meaning to make what I've said some kind of personal attack on your abilities as an administer of the scheme!

I'm talking about people like cyclescheme.co.uk and Evans who had websites saying "enter your tax code and bike value here - ok you pay this much a month and at the end you pay this much", and because so many organisations like this were doing this, HRMC had to issue guidance stating they were doing it wrong, and this caused a bit of a brouhaha amongst those who'd taken out these schemes beleiving what they were told would happen.


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## John the Monkey (8 Jun 2011)

Alembicbassman said:


> We need a poll to find out how many C2W users actually do the 50% work related journeys (as per the agreement) on their C2W bikes.
> 
> I'm guessing it'll be around 50%



Of the people I know here, it's in the order of 80-90%. LOTS of Bromptons.


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## Paul Walters (8 Jun 2011)

Jezston said:


> Wow. What?
> 
> I'm basing it on the rules as presented to myself, my colleagues and friends who have signed up to the scheme 'pre-clarification', and so many people on here who have said they were told under the scheme that they would pay £x a month then at the end they'd pay no more than a month's worth and the bike is theirs - and then found out at the end of the scheme - post-clarification - that was actually wrong.
> 
> That's what we were told would happen, that was what we expected to happen, that isn't what happened. It's not really fair to criticise those who fell victim to being misinformed by the people who run the schemes, because we never read the official DFT Guidance that I'm sure few of us knew anything about.




Thank you


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## evilclive (8 Jun 2011)

pshore said:


> Another route to unhappiness will be if a scheme administrator goes bust. The debt recovery firms will not be offering the bikes to the purchasers at the end of the hire period because they can probably get more for them through auction. (I still think 25% for some bikes at 12 months is undervaluing them).



Don't forget the cost of collecting the thing. There's no money for debt recovery firms in a collection of second hand bikes - they have to get the bike off you in order to sell it, and it's very easy to make it cost them more to recover it from you than it makes them at auction.


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## pshore (8 Jun 2011)

evilclive said:


> Don't forget the cost of collecting the thing. There's no money for debt recovery firms in a collection of second hand bikes - they have to get the bike off you in order to sell it, and it's very easy to make it cost them more to recover it from you than it makes them at auction.



In the terms and conditions, you might have to send the bike back at your own cost if I recall correctly. 

What I was saying was a bit hypothetical, but the main point is that all the risk is stacked against the consumer. This is not a very simple way to purchase a bike. 

There is a similar salary sacrifice scheme at work for getting you to buy a lower emissioned car. I wonder how that compares for T's and C's. The potential saving (or loss) is far bigger.


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## huxley (9 Jun 2011)

hi 
v got a c2w agreement out with Halfords as it is my empoyer aswell i had to go with them,
but dose anyone know if i could get another scheam out now,
my one dont run out till september

(i have got the boardman team fs and have had a few problems with it )


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