Cycle2Work Scheme

[Aescott]

Hi

I got a new bike last April on the scheme and elected to pay the cost over 18 months. I got an e-mail from Halfords (who administer the scheme), saying that my agreement is almost at an end, which suggests that they are looking at it as a 12-month agreement (the deductions tie in to an 18-month purchase). They've given me 3 options:

1. hand the bike back to them (like that'll ever happen)
2. pay the fair market value and own it outright
3. elect for an extended no-cost hire period of 48-60 months

I'll probably take option 3, but does anyone know of any pitfalls with this? I thought that the scheme had been amended so that the bike was owned outright at the end of the agreement, but clearly not.

 

[ianrauk]

how much is their market value?

 

[wiggydiggy]

Hi

I got a new bike last April on the scheme and elected to pay the cost over 18 months. I got an e-mail from Halfords (who administer the scheme), saying that my agreement is almost at an end, which suggests that they are looking at it as a 12-month agreement (the deductions tie in to an 18-month purchase). They've given me 3 options:

1. hand the bike back to them (like that'll ever happen)
2. pay the fair market value and own it outright
3. elect for an extended no-cost hire period of 48-60 months

I'll probably take option 3, but does anyone know of any pitfalls with this? I thought that the scheme had been amended so that the bike was owned outright at the end of the agreement, but clearly not.

Only pitfall with Option (3) is if you leave your employer early, but even then you'd only be asked to pay fair market value (I believe, do check your individual scheme).

 

[bikingdad90]

Has your employer “sold” the bike to Halfords? If they have, then Halfords get in touch to ask you extend your agreement by up to a 4 years and you pay a fair value for the bike. A 5 year old bike is worth nil.

 

[cyberknight]

how much is their market value?

depends on the bike initial purchase price , if it was £1k your looking at 25 % last time i checked ,

 

[Dadam]

HMRC rules from here

After the "hire period" i.e the end of the regular payment schedule, most schemes give you the option of continuing to keep the bike for few more years for a one off fee. Extending the hire period but without hire charges.

For Cyclescheme, the one my employer uses, that is 3% or 7% as a "refundable deposit". You pay it, then keep the bike with no more to pay and at the end of the period you're deemed to own it outright. If you decide not to keep the bike then you can give it back and get your deposit back before that period.