Cycle to work scheme

Have a look at the cyclescheme website / other scheme websites - they have notes for employers.

Can someone explain what would happen if you buy a bike on the cycle scheme and it gets stolen?

Do I then own my employer the total value of the bike (depending on its age)?

You are strongly encouraged to carry insurance on the bike to cover just that event.

http://www.cyclescheme.co.uk/employers/employer-faqs#/getting-a-bike/faqs/who-is-responsible-for-maintaining-the-bike-and

That would cover you in the event it is stolen. If it gets stolen and you have no insurance, then you are still liable for the payments, bike or no bike.

re: cost to employer: the company has to pay the money to the bike shop for the purchase upfront if they don't have a credit account with them and recoup the voucher cost from you.

Confused.. im not talking about the contractual salary sacrifice I have made.. because that is in no way legally linked to the bike.

Of course regardless of the bike being stolen or not those payments will continue to be made.

But the bike is always owned by the company even at the end of the payment period.. If the bike is ever stolen, am I liable to pay my company for its value?

Im not stupid enough to gamble against professional mathematicians so I would never risk insurance.

Yeah, the scheme has changed a lot and it is less straightforward now.

http://www.cyclescheme.co.uk/employers/employer-updates/hmrc-update

I point you to this bit (my emphasis)

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, either directly or via Cyclescheme.

My interpretation is that it depends on your employer's policy. If your company's policy is to tranfser ownership after 12 months then you're in good shape. Worth checking that.

the scheme is made up of two parts

initial hire (salary sacrifice) - 12 months / 12 payments

enter an extended hire period or take ownership - pay fair market value according to length of hire period on a sliding scale

if you sell/lose the bike you are still required to pay both fee's. the salary sacrifice AND the fair market value at the end of your hire period.

some scheme providers (Evans for example have a scheme called transfer4you) will have your employer transfer ownership to them after 12 months for a nominal £1 fee, they then 'hire' the bike to you for the period until the bike becomes effectively worthless and there is no fair market value (5 years i think). so you only ever pay the salary sacrifice, this is the best outcome you can get essentially.

the most you would ever pay is the voucher amount and 25% fair market value (to take ownership after 1 year)

When I start contracting, my employer will be buying a Look 695 with Di2, and renting it to me for £50 a month for the next 10 years. If the bike is lost or stolen, my employer will claim on its own insurance, and buy a new one.

if you sell/lose the bike you are still required to pay both fee's. the salary sacrifice AND the fair market value at the end of your hire period.

This is what I want clarification on.. because the fair market value for a stolen bike no longer in your possession is obviously = Zero.

There is no gain in capital for either party.
Lawyers/Accountants start your engines.

i think it's more likely to be a clause in the contract of hire rather than a legal requirement to hmrc then

My guess is that there are clauses galore, but that they haven't really been sufficiently tested in court, vis. enforceability, for any practical opinion, only theoretical.

All the cycle scheme website says on the matter

Who is responsible for maintaining the bike and what happens if it is stolen?

It is the employee’s responsibility to maintain the bike. Cyclescheme Partner Shops will be able to advise about maintenance and servicing depending on how the bike is used and stores offer a free first service. If the bike is stolen, as long as the employee replaces the bike and continues to use it mainly for commuting purposes, the employer can continue to take the salary sacrifice reductions from GROSS salary. This means the participant can still take advantage of the income tax and National Insurance Contribution (NIC) savings. Cyclescheme strongly recommend that scheme participants insure the bicycle and safety equipment as soon as they collect it from the store.

But it does suggest it is only applying HMRC guidance

http://www.cyclescheme.co.uk/employers/employer-updates/hmrc-update

I've found this statement from my university documentation but im not sure how tested it is.

Similarly, if your bike is stolen, a termination fee (equal to the outstanding payments) will be deducted from your pay. If you can produce a crime reference number to evidence the bike being stolen, Cyclescheme will not look to recover a full market value payment for the stolen bike.

Is there anyone in your company who can help you with the questions? I get the impression that a lot of the specifics are about the theft issue are going to be held by your own internal policies. Someone in Finance or HR perhaps? Ask them if it has ever happened.

Also - how actually at risk is your bike going to be? Just curious.

Got an 'official' response from cyclescheme - it doesn't fill me with total confidence but it does suggest what I thought is right.

If the bike was stolen or damaged beyond repair during this 12 month agreement, if you provide us with the crime reference details, we can have a look into waiving the final payment. We can only do this if the remainder of your monthly salary sacrifice payments were taken from your net salary, rather than continuing from gross salary. This is because if you are no longer in possession of the bike, it will not be used to cycle to work meaning you aren't eligible for any tax savings. If the bike was insured then you can continue with the scheme as normal.

Also - how actually at risk is your bike going to be? Just curious.

Parked at the station every day - fairly high I'd imagine.. why you interested?

does anyone know if its possible to get a Canyon on cycle scheme please? Thanks

Attempting to get our HR to sign up with a scheme. They are looking at http://www.cyclesolutions.co.uk/ but I suspect bike2workscheme or cyclescheme.co.uk are better bets. HR claim that the former is less admin for them (but ties us into using mail order, that than LBS).

Thoughts? Evidence? Pros and Cons?

I got my employer to do the evans one because the others seem to all levy a 10% 'fee' for doing the scheme.

with evans they also do transfer4you which allows them to handle to hire period instead of your employer so you can effectively run it out to the full 6 years / 0% fair market value even if you switch jobs. which maximises the savings.

I'm considering giving the scheme a go. I worked out that having to pay 21% of the bike's initial value to buy it after the initial 18 month hire period wouldn't save me much so I emailed HR to see whether they offer the extended lease with deposit option. Turns out they don't "However, we do offer an incentive payment which matches the fair market value of the bike (21% of initial value), to encourage scheme members to take advantage of the offer to purchase the bike. Therefore the only actual cost to the scheme member will be the tax and NI on the incentive payment, plus the sum of the 18 monthly payments of course.

Also sale bikes are included so I'm tempted to go for a CAAD8 Tiagra triple '13 @ £750.

Anyone else done the above method with their employer?

thanks HatBeard

I've a question, are bike shops tied into which bikes they can offer you? Could I go into my lovely LBS, get them to order and build me something special that they would not usually stock and use my cycle voucher to pay for it?

Depends on the bike shop, some are limited, some are lazy, but the others will... Best way to find out is ask the shop.

^ This, depend on what distributor the shop use.

I'm considering giving the scheme a go. I worked out that having to pay 21% of the bike's initial value to buy it after the initial 18 month hire period wouldn't save me much so I emailed HR to see whether they offer the extended lease with deposit option. Turns out they don't "However, we do offer an incentive payment which matches the fair market value of the bike (21% of initial value), to encourage scheme members to take advantage of the offer to purchase the bike. Therefore the only actual cost to the scheme member will be the tax and NI on the incentive payment, plus the sum of the 18 monthly payments of course.

Also sale bikes are included so I'm tempted to go for a CAAD8 Tiagra triple '13 @ £750.

Anyone else done the above method with their employer?

Have you seen my posts on this above?
The solution is to make sure you use the entire value of the bike during the initial 12 months = ride it alot! You then don't have anything to pay at the end of the period.

Trying to get my employer to sign up to a cycle 2 work scheme. Small company (about 20 employess) and i'm the only one who cycles.

Finding it confusing with several different outlets for the scheme (as in evans, halfords, cyclesolutions, cyclescheme) and the differences between them?

What would be the best one?

Cheers all.