is c2ws now pointless

[MacB]

could HMRC be mean enough to go back over the last few years and start recalculating tax positions based on C2W benefits?

Having never done the scheme, do they even appear on the P11D?

 

[threebikesmcginty]

could HMRC be mean enough to go back over the last few years and start recalculating tax positions based on C2W benefits?

Fine by me

 

[MacB]

Fine by me

could see a big increase in the quality secondhand market as collections are lightened - every cloud and all that

 

[threebikesmcginty]

*childishly rubs hands together in anticipation*

 

[MacB]

*childishly rubs hands together in anticipation*

I'm already sorting out a cart, pulled by a cargo bike of course, so that I can do the rounds like some sort of cycling rag and bone man. I can hear the cries now:-

'any newish bikes, help pay your tax bill, any newish bikes'

 

[threebikesmcginty]

I'm already sorting out a cart, pulled by a cargo bike of course, so that I can do the rounds like some sort of cycling rag and bone man. I can hear the cries now:-

'any newish bikes, help pay your tax bill, any newish bikes'

 

[StuartG]

I run my own business and am VAT registered so I could have theoretically got my last couple of bikes through C2W (even though I don't!). But it was just too much hassle.

The government will be giving a £5k grant for electric vehicles, excusing them from 'road' & congestion taxes to encourage greener travel. What could be greener than a bike? So why not a similar grant? Say equivalent to the VAT?

Simple, applies to everybody (many of the most deserving don't have C2W style employers) and a lot simpler to administer. Remember the car grant comes from cyclist's taxes and not the road tax that they don't pay.

 

[Fiona N]

no density involved. If they don't charge you the 25% (assuming tip top nick, and tbh how many year-old £1k rrp bikes get sold on eBay for less than £250? so that seems real to me) they have created a taxable "benefit in kind".

The HMRC has changed their mind recently as there is absolutely no reason why the employer can't formally keep ownership of the bike for another year or so and sell at some point in time when the value is ~5% of the original purchase price. I think there is an article on the Guardian bike blog - I'll try find it.

Here we go - this is a direct quote from the blog

I asked HMRC for confirmation. It said: "The statutory exemption for cycles loaned to employees is not subject to any time limit and will continue to apply as long as the conditions about use and availability are satisfied … HMRC sees no difficulty in the employee being offered the opportunity to buy the bike at a later date than had originally been expected, and using the market value percentage that applies at that later date." After three years, a £500 bike's fair market value is 12% of the original price, falling to 2% after five years, says HMRC.

 

[Norm]

could HMRC be mean enough to go back over the last few years and start recalculating tax positions based on C2W benefits?

Having never done the scheme, do they even appear on the P11D?

On the first part, yes, they could. However, with the time it's going to take to resolve the issues which have been all over the news recently, they are not planning on doing anything else currently.

I know one company, for instance, who owe a fairly significant sum and HMRC don't even want to discuss terms at the moment because they are at all-hands sorting out the system errors.

On the second part, they wouldn't need to appear on the P11D unless they were considered a BiK.

 

[RufusA]

I run my own business and am VAT registered so I could have theoretically got my last couple of bikes through C2W (even though I don't!). But it was just too much hassle.

If you have your own business you can ditch 90% of the hassle bits of the C2W. Simply get the company to buy a bike for each employee (company credit card, or personal CC and expense claims), which it lends indefinitely to the employee without any tax implications.

Company can pay for all maintenance, repairs and upgrades.

Then after 3-4 years, company disposes of bike for token sum in line with HMRC guidelines.

The only tricky bit is the capital allowances and depreciation which unless you've already used it you can probably offset 100% of the cost against any profits using an Annual Investment Allowance.

Simples!

Rufus (with a 3 year old company provided Spesh Sirrus that will be disposed of shortly).

 

[battered]

After three years, a £500 bike's fair market value is 12% of the original price, falling to 2% after five years, says HMRC.

Really? A 3 yr old bike mid-spec bike for £60? I'll visit that shop. Especially if they have a 5yr old one for a tenner.

 

[MacB]

Really? A 3 yr old bike mid-spec bike for £60? I'll visit that shop. Especially if they have a 5yr old one for a tenner.

be worth it just for spares alone

 

[TheDoctor]

Hmmm.
I'll be interested to see where I stand, as our scheme explicitely mentioned a 5% final charge, and I had the bike stolen anyway.

 

[Norm]

Hmmm.
I'll be interested to see where I stand, as our scheme explicitely mentioned a 5% final charge, and I had the bike stolen anyway.

Another person who should keep their scheme's rules quiet, as that would mean that scheme is non-compliant. There must be no mention of a final purchase price. If the final price is set at the start of the contract, that makes it a hire purchase rather than a rental contract.

If the bike weren't stolen, you'd have more worries than just the 5% price as HMRC would consider income tax to be payable on the salary which you have sacrificed.

 

[amaferanga]

Hmmm.
I'll be interested to see where I stand, as our scheme explicitely mentioned a 5% final charge, and I had the bike stolen anyway.

Hmmmm did they maybe suggest the FMV would be around 5%? If they explicitly said it would be then that's bad.

Also, if the bike is stolen you should then be paying for the bike from your net salary.

I'd keep quiet if I were you