You are reading a single comment by @villa-ru and its replies.
Click here to read the full conversation.
London Fixed Gear and Single-Speed is a community of predominantly fixed gear and single-speed cyclists in and around London, UK.
This site is supported almost exclusively by donations. Please consider donating a small amount regularly.
@villa-ru
It's the transfer of ownership bit at the end that is a grey area, and I presume that is what worries him, rather than the main bulk of the scheme which is a government incentive.
Because selling the bike to the employee at the end changes the 'loan' agreement to a 'hire-purchase' agreement, this is not then liable for tax relief so, theoretically, all the savings would need to be paid back. In practice, this is accepted by HMRC and allowed to continue.
The market value is generally @ 5% of original purchase cost, but this is only a guideline because if it was set out in the scheme as a fact, we would be back to the H-P problem.
In summary, the scheme was put together a bit shonkily (it was originally for computers, not bikes), without getting tax exemption sorted, but it is widely used and accepted so I can't believe there would ever be any legal challenges to it.