Cyclescheme

Wow, that guy is amazingly mis-informed on some of those points. His friend at the "large accountancy firm" obviously has nothing to do with personal tax or - equally likely - was dropped on his head as a child.

Some of my comments should probably be confirmed by a lawyer (I know some hang around here, trying to steal people's souls) but the purely tax stuff is right. I think that you could probably cut the swearing out and beat down his argument if reason was all that it needed, although I suspect that they may have made their minds up.

The accountancy firm faced a lengthy and expensive legal battle when one of their employees had an accident while riding home from work on a 'Ride To Work' bike, and was trying to sue the Company for personal injury - the case was eventually dropped by the claimant but not without acrimony from both sides.

Some people are just twats. The guy could have been sliding down the bannister at work, fallen off and tried to sue.

The Company is effectively entering into a private credit agreement with each employee that wants to use the scheme. The Company buys the employee's own choice of bike, and the employee then 'rents' the bike from the Company for 12months before making a final settlement payment to transfer ownership of the bike from the Company. The financing and regulation of any form of credit agreement has complex and heavyweight legal implications (which funnily enough none of the schemes actually inform employers about in advance!), which potentially puts the Company at risk of non-compliance.
Such a credit agreement scheme places additional admin burden upon the Company to check and administer the payment-recovery system from each employee.
There are also other issues to consider in the event that the employee leaves the Company during the 12month 'rental' period. We would need authority to collect the total outstanding value owed against the bike by the employee, or for the employee to return the bike to the Company, but we only have limited rights of recovering the bike in the event that the employee does not pay.

You get the proforma credit agreement stuff from Cyclescheme and - unless I'm very much mistaken - if you fail to give the bike back then they could just do you for theft or take you to county court. If you are a member of almost any professional body they could also approach them to bollock you for "conduct unbecoming".

In short, lending you a bike is no more risky than giving you a work laptop.

As for the payroll thing, it's just one entry. It's not hard. Check if your company do the childcare vouchers - it's the same idea so if they have the administrative means to administer that, they can administer this.

The employee must insure the full value of the bike against theft during the 12month period of 'rental'. Again, if the bike were stolen but not insured, the 'Ride To Work' agreements do not provide the Company with cast-iron grounds with which to recover the remainder of the bike's outstanding value from the employee.
The Company would effectively be financing a company-provided vehicle (albeit a bicycle) for the 12months of 'rental' to the employee until the employee has made all of their finance payments back to the Company. Until such time as the employee has made all payments the Company still owns the bike, which potentially transfers additional liability onto ourselves in the event of the employee having an accident whilst riding the bike to/from work. This liability is in terms of both personal injury and third-party liability.

In the contract you sign you normally have a bit which says "If it gets nicked I'll either replace it (i.e. via insurance) or give you the cash".

The third party liability thing is covered by the LCC and you could just get people to sign a waiver re: personal injury while commuting thing.

The employee has an obligation to ride the bike to work at least 12 times during the 12month period of 'rental' from the Company. Related to item 5, above, this means that the Company (as the 'hirer') is imposing an obligation that the employee must ride to/from work several times. Cyclists have one of the highest accident rates of any road-user group, and therefore the Company could be construed as putting the employee at risk by obliging them to ride to work several times per year.

WRONG. This is so fucking wrong and it shows that whoever they talked to at the "large accounting firm" doesn't know shit. The bike qualifies as used for business if the majority of its use is for commuting. None of this "12 times a year" crap, just more commuting than non-commuting.

This in itself is very open to interpretation too, as it could be commuting miles/recreational miles or trips. I could be using it mainly for commuting if I was doing 10 miles 5 days a week on getting to and from work but then doing two 100 mile rides over the weekend.

Finally, under the terms of the Ride To Work scheme, the Company has an additional obligation to provide breakfast for any employee riding into work on a bike financed under this scheme. Again, this is additional expense and admin that we don't wish to incur.

Again this is wrong beyond belief. They are able to provide a benefit for cyclists without giving rise to a benefit in kind charges re: the provision of food, although I think that the frequency of it could have an impact.

Basically, if your work want to have a cycle to work day and give everyone that does it a croissant, they can do without it having to go on your P11D.

Apologies for the length of this response - I bet you wish you hadn't asked now! - but it is important that you are fully aware of all of the hidden pitfalls. These schemes are heavily promoted by bike manufacturers/suppliers as an additional sales tool and are pitched at employees, focusing on the end-user benefits but failing to mention the significant and onerous administration and legal burdens placed upon the employer.

So, in summary, the main pitfalls are:

1. The payroll department are lazy
   
2. Your boss' mate is thick
   
3. They are too myopic to realise that these schemes save them 12.5% of the cost of the bikes in the Employers National Insurance Contributions that they would otherwise have had to make. That's (potentially) £125 per participant, which is waaaay more than the minor payroll changes would cost.