Cycle to work above £1000.

[addictfreak]

Hi All

I am setting up the bike scheme at our workplace.

I need to know where we stand if an employee wants a bike for £1500, but pays £500 to the bike shop and puts the £1000 through cycle to work.

Can you do this or not?

Thanks

That is exactly what I did. £1500 bike, paid £500 cash to my LBS rest was on voucher.

To be honest, at the time I never asked if it was ok to do it, I just did it. No complaints from my LBS, he said ok without a second thought.

 

[Norm]

It can be done but it is bending the rules and it leaves the employee with the potential for losing out a lot of money.

They are basically giving the £500 away, in the hope that the company will look kindly upon them at the end of the rental period. The bike is and remains the property of the company and should be sold to the employee at full fair market value at the end of the rental period. The company cannot reduce this value to reflect an amount which the employee might have paid up front.

If the employee leaves the company, they have no rights to any value from the bike. Similarly if the employee is sacked or made redundant, they might just be forced to walk away, losing their £500.

Employees, employers and LBS do this because the C2W scheme is seen as an unpoliced soft option but it is tax fraud and HMRC have made noises about getting harsher with the enforcements.

 

[alci4]

i paid a bit on top of my loc to get the bike i wanted

and if my employer wants my bike back it will have got stolen last week so they gonna have to settle for the money i owe em

 

[el gordo]

Next scheme is in motion as we speak and i am going for a Langster plus kiddie trailer for my little darlings to be dragged along !

Another example of where this scheme goes wrong - some employers won't take part while those that do have people getting bikes and bits for their kids. Cycle to work is a good idea but runs the risk of being stopped when the taxman uncovers these scams. You're going to spoil it for everyone.

 

[deccoo]

My company and the scheme they use (Cyclescheme.co.uk) allow you to take a voucher with value up to £1,500. Think that should give some hope for setting up a scheme with a higher limit legitimately without feeling an wrath from HMR&C!

 

[Norm]

My company and the scheme they use (Cyclescheme.co.uk) allow you to take a voucher with value up to £1,500. Think that should give some hope for setting up a scheme with a higher limit legitimately without feeling an wrath from HMR&C!

Only if your company has a consumer credit licence. If not, they are in a whole load of trouble from more than just the tax man.

 

[Bromptonaut]

It can be done but it is bending the rules and it leaves the employee with the potential for losing out a lot of money.

Employees, employers and LBS do this because the C2W scheme is seen as an unpoliced soft option but it is tax fraud and HMRC have made noises about getting harsher with the enforcements.

It may already be beyond noises http://www.hmrc.gov.uk/specialist/cycles_bus_passes.pdf . This seems to mandate a valuation at the point of sale. Benefits and expenses sub-group are supposed to me looking at a valuation matrix but progress is slow.

My employer has always insisted on a valuation citing a local inspector who was certainly not going to condone any dodges. Trouble is bike shops are unwillling to take on the responsibility.

 

[Bromptonaut]

i paid a bit on top of my loc to get the bike i wanted

and if my employer wants my bike back it will have got stolen last week so they gonna have to settle for the money i owe em

You could try it but it's their bike that's been 'stolen' and its up to you to put it right. HR would clap me in irons if I tried a stunt like that!!

 

[Norm]

You could try it but it's their bike that's been 'stolen' and its up to you to put it right. HR would clap me in irons if I tried a stunt like that!!

Based on the post to which you replied with the above, HR would clap most people in irons if they recruited someone like alci, who would lie and defraud a company which was complying with tax legislation. But maybe that's just me.

 

[g00se]

My understanding is that if a bike is nicked whilst still being owned by the employer - then the employee needs to pay back the FULL value of the bike to the employer (not just what remains to be paid - but the forgone tax too). That's why most schemes insist that the bike is insured. Same if you quit before all payments are made.