cycle to work

[mark1974]

Hi
Anybody who has used this sheme can you tell me what happened at the end of 12months?
I never really looked into it just got a bike.
question is

Do you keep bike after 12months or return it?
do you have a option to purchase it as end of the scheme?
What did it cost if anybody did keep the bike?

thanks
Mark

 

[The peddler]

Hi Mark
My company use www.cyclescheme.co.uk and this is the option I took check out the website FAQ
What happens at the end of the hire period?

In order to preserve the tax benefits of the scheme, there can be no guarantee or obligation to transfer ownership to the employee immediately after the hire period has ended. However, employers generally choose to offer this option in addition to others, either directly or via Cyclescheme.
At the end of the hire period, Cyclescheme will contact employees to discuss the options available.
The most attractive option for employees will be to pay a small, refundable deposit (3% or 7% of the equipment value*) and continue to use the bicycle or safety equipment for an extended period of up to 36 months.
At the end of this period, if the employee does not wish to keep the bicycle or safety equipment, then Cyclescheme will refund the deposit in full. Alternatively, Cyclescheme may at its discretion, offer ownership of the bicycle or safety equipment to the employee at this point, and no further action or payment will be required if they wish to keep the bicycle or safety equipment.

 

[Mrbubba]

I've just bought my bike using the cycle to work, in this scheme they don't charge you anything extra for the bike at the end, as they says it would defeat the purpose of the scheme, they will just adjust your tax code slightly, will see what happens in December

 

[The Brewer]

Just finished mine and was expecting a final end of term payment but nothi g came out of this months pay.
Going to leave it a few months to see how Mrs B's job goes before i get another, but been told i can apply straight away

 

[mark1974]

cheers for replys
appreciated

 

[lejogger]

The scheme can be run in many ways, and the transfer of ownership can be a bit of a minefield.

The important thing to know is that all your payments over the length of the contract are hire payments only. In order to get the bike for nothing at the end of paying your monthly fee, you would have to be paying these for approximately 6 years. According to the HMRC the bike will have a nominal value after this time, so it can be given to you for nothing... as long as whoever owns that bike are happy for you to have it for nothing.

Most schemes last for 12 or 18 months. Your employers or the company who run the scheme will normally want to transfer ownership at that time. They can extend it of course, keeping ownership for another 5 years and then transfer it for nothing. I don't run our scheme like that though because it becomes a nightmare to track when you have staff moving on.

HMRC have developed some guidelines which state how much a bike should be worth depending on its age and original purchase price:

For example, after 12 months, a bike that originally cost more than £500 will be worth 25% or its original cost. E.g. If you signed up for a £1,000 bike then HMRC would expect you to pay £250 to take ownership of it after a year.
Most schemes however will not expect you to pay this much. They may take a fee or anything from 10%, 5% or even nothing.

BUT if you don't pay what the HMRC expect you either have to prove to them why it isn't worth that much, or pay tax on the difference between what you did pay and what you're expected to pay.

The scheme I set up doesn't expect anything to be paid to transfer ownership, therefore we're transferring the asset as a benefit in kind to the employee. If we use the £1,000 bike example then the employee will pay tax on the £250 via an adjustment to the following years' tax code and will cost the employee £50 if they're a 20% taxpayer or £100 if they're a 40% taxpayer.

I hope this makes sense, but let me know if anything needs clarifying. If you contact your HR dept or whoever you first contacted to join the scheme then they'll let you know what your company's procedure is.