Cycle to Work - Maximum

[doogle84]

My employer is soon to introduce C2W through Cyclescheme. I've been informed that there is a rule which means you can't buy a bike for more than the maximum £1k, due to the unbearable confusion caused by the bike then being partly owned by my employer and partly by me (I may have paraphrased here slightly).

Is this right? I can't find anything on this, except I'm sure I've seen the Evans scheme say you can pay the difference if your purchase is over the max. I now fear this may just mean accessories.

I've had my eye on a Condor Fratello but my build was going to be safely over the max, and I assumed I could just pay the difference. If not I'm a bit confused as to why Condor say they accept Cyclescheme vouchers given most of their builds are likely to be over the limit.


potentially-disappointed-Doug

 

[gregsid]

I think the £1000 limit has been imposed by the government. There's bound to be some dealers that will bend the rules by putting down a different make/model/value on the official paperwork and then the customer paying extra for the bike they REALLY want!

 

[Alembicbassman]

I've heard you can pay the difference, but how this affects ownership of the bike would be an issue.

You don't own the bike until there's been a final payment based on the HMRC valuation matrix

This valuation has increased in the last 12 months following new guidance.

You may be in for a nasty surprise when the lease is up.

 

[SquareDaff]

OR maybe not - most companies (mine included) just give you the bike as a taxable benefit. You just pay the tax on the final valuation rather than the full amount. If you took out the full £1k then you're final valuation would be 25% of that value (I believe that's the government guidlline - please correct if I'm wrong) so £250. Your final payment is effectively the tax you'd pay on £250.

 

[abo]

Don't they allow you to pay for parts on C2W? Why not see if the bike shop will charge £1000 for you frame/wheels or whatever adds up to close to that amount, satifying the C2W rules and then buy extra 'parts' with your own cash. IYSWIM

 

[suecsi]

If you go over £1000, your company needs to have a credit licence. That is what puts some companies off, as getting one is quite expensive if the only thing it is being used for is the cycle scheme. We kept it at £1000 or under because of this as we only have 15 staff and only 3 joined the scheme.

 

[upsidedown]

You can pay the difference yourself. When you come to do the order on the Cyclescheme website there is an option to select "custom build". Just select that and get the quote with the name of the frame or whatever on it.

 

[VamP]

Talk to your company.


The Ride2Work scheme (Evans) allows unlimited spend on bike, but only the first £1000 is subject to the special VAT and tax treatment.

My employer, provides 2nd year lease free of charge, so the final valuation is significantly lower and treated as a taxable benefit.

For 40% tax payer, the first £1000 of the bike ends up costing cca £450. The rest costs what you paid. Your risk is what happens if you leave your employer in those two years, but again that only applies to the first £1000.

Obviously you can't sell the bike while it's on the scheme.

 

[billy1561]

The place I work insist its £1000 max as per the gov rules. However, my lLBS are very flexible and are happy for me to pay the difference but they will disguise it as a £1000 bike.

 

[doogle84]

Looks like a few avenues to explore at the time, so all is not lost. Thanks all!

 

[MarcA]

Where I work we use Evans. People pay more if they want to but the company only pays up to £1k. Employee makes up the difference. Guess Evens are happy to sell as much as possible.

 

[fossyant]

I put the extra towards my bike, that said, it was 2 years ago before the new legislation about the 'final value'.

Talk to your LBS, as you only put the 'cost' down on the application. You then get a 'voucher' for £1k through the post, so when you pop down to the LBS with the voucher, who's to say that you didn't get a bit 'carried away'.

 

[Norm]

The danger during the period of the rental contract is that you have essentially given the money to your employer, on the expectation that they will sell you the bike at the end of the rental contract. They might not. They might sack you and a vindictive manager might decide to keep the bike. You have no redress.

The danger at the time of sale is that you need to buy the bike at the % of the bike's original purchase price. If you've stumped up £500 to get a £1,500 bike, you then need to pay 25% of £1,500 to buy the bike.

 

[APK]

The danger during the period of the rental contract is that you have essentially given the money to your employer, on the expectation that they will sell you the bike at the end of the rental contract. They might not. They might sack you and a vindictive manager might decide to keep the bike. You have no redress.

The danger at the time of sale is that you need to buy the bike at the % of the bike's original purchase price. If you've stumped up £500 to get a £1,500 bike, you then need to pay 25% of £1,500 to buy the bike.

I think you will find you will only have to pay the 25% on the part (£1000) that is in the scheme, not the part £500 you have paid for, obviously if you decide not to make the final payment, then you will have to give the full bike back, losing all of your contribution.

As has been said, I think you can buy any value bike on the scheme, but if it is over £1000 then the company needs a consumer credit license, hence why most restrict the limit to £1000.

 

[Norm]

I think you will find you will only have to pay the 25% on the part (£1000) that is in the scheme, not the part £500 you have paid for...

I prefer to take the word of HMRC rather than entering into any "I think you will find" contest.

The original price of the cycle is the price for which it was on sale as new at the time when it was first provided to the employee.