Cycle to work scheme

So I sent the boss all the relevant Cyclescheme info. The accountants have written back saying such a hire scheme is easy to set up without Cyclescheme's involvement. So the boss would pay the LBS directly, and make any making any salary deductions from gross salary over 12 months.

Mary- this is what you referred to above. You kindly offered to send me the 'employer implementation manual' and 'sample hire agreement'- is this still available?

Thanks Tiswas- pm on it's way...

Using Cyclescheme is not compulsory, they are just a company who sort the paperwork out for organisations too lazy to do it for themselves.

staggerlee:

Most bike shops will give you the opportunity to buy the bike using a credit card, and then refund you the money onto the card in place of the voucher when you get it.

Tedious question I know. The boss has now agreed to do an in-house Hire Agreement. When I sign to a 'salary sacrifice' for 12 months, has anyone ever looked into the effects on Pensions, Statutory Sick Pay, Statutory and Working Tax Credits? Would these only be affected for those on a low wage?

Staggerlee:

we've just set a scheme up... from what i understand, it would only have an effect if you where to leave your company then it would be taxable benefit and be treated in the same way as everything else.

will check with my financial controller to confirm this and post again.

regards
soap

Tedious question I know. The boss has now agreed to do an in-house Hire Agreement. When I sign to a 'salary sacrifice' for 12 months, has anyone ever looked into the effects on Pensions, Statutory Sick Pay, Statutory and Working Tax Credits? Would these only be affected for those on a low wage?

Bit of a late answer I know, but I'm looking into setting up one of these at my company.

I can say that no salary sacrifice can take you below the minimum wage.

Most pensions won't be affected, although it is possible that ir will lower your pension contributions by a tiny percentage.

Interestingly if you go on maternity your company can't stop benefits (including childcare vouchers and cycle to work) but they also can't lower your wages below relative minimum wage, so the company have to pay!

I don't know about tax credits.

random question, but ny G/F is just about to apply for this, does she have to get an OTS bike or can she get parts for me to build her something special?

Complete bike I think.

Depends on the scheme, Evans/halfords will insist on complete bikes, but most lbs's will be happyto provide you with parts and give you a receipt for a whole bike!

And HMRC are moving the goalposts:

http://www.bikebiz.com/news/32690/HMRC-spanner-thrown-into-wheel-of-Cycle-to-Work-Scheme

Final Value changes may mean it's not worth doing (except for the spread of the payment with no interest%)

Whoah. that's shit.

Was just about to do it again. Better get the agreed deal in place first!

This sounds like it will be a real knock:
"The 'acceptable disposal value percentage' of a bicycle bought on the scheme by an employer and transferred to the ownership of an employee a year later will now be 25 percent".
If a cycle scheme is run privately in a firm as a salary sacrifice (without any intermediate company involved eg Cyclescheme) would these new conditions still be enforceable?

Whoah. that's shit.

Was just about to do it again. Better get the agreed deal in place first!

The problem is no C2W agreement is allowed to even refer to disposal arrangements after the hire term. You can't agree anything or else it is a just HP arrangement and therefore no tax benefit.

ransferred to the ownership of an employee a year later will now be 25 percent".
If a cycle scheme is run privately in a firm as a salary sacrifice (without any intermediate company involved eg Cyclescheme) would these new conditions still be enforceable?

Yes. It's a personal taxation issue.

Can't believe anyone bought the Cyclescheme company just before an election in a recession.

here http://www.bikeradar.com/forums/viewtopic.php?t=12721856&postdays=0&postorder=asc&start=0 has a worked example of what it will mean value wise. It also seems it's for bikes > £500 however the value can be less based on condition/usage etc.

I've whacked up a separate warning thread. It's a big enough deal I think.

Warning- mature question:

My 12 months Cycle to Work scheme is due to end next month. Cyclescheme were not involved and it was an agreement between me and my employer (as above)
Instead of paying 25% to take possession of a one year old bike, I see Cyclescheme have introduced an Extended Use agreement where you pay a refundable deposit (7%), which runs for 36 months, at which point Cyclescheme may offer ownership to the employee. Cyclescheme then retain your deposit and you take ownership. You can leave your current job in the meantime and your Agreement is unaffected.
Does anyone know if an Extended Use Agreement can be implemented when not using a third party like Cyclescheme, where the agreement is just between you and your employer?
It would certainly take the sting off having to shell out the 25%.

The scheme has a sliding scale for the estimated value. As I recall after six years the assumed value is nil, hence the Cyclescheme agreement, and I see no reason why it wouldn't work for your employer scheme.

I think that once the voucher arrangement for the purchase has happened, there's no further involvement for Cyclescheme and it's purely a matter between the employer and the employee, so you're in the same position as as someone who used Cyclescheme except that you may have to take the initiative in asking for an extended hire period, if that's what you want.

My employers have just offered to extend the "hire" period on the bike I "bought" a year ago. I was tempted, as the new market value guidance was otherwise going to force me to shell out £200. But in the end I have purchased the bike from my employers for an undisclosed amount, knowing that I may have to pay tax on the difference between that amount and what HMRC think is the market value, but at least the bike is now officially mine and I can sell it...

I know this is a little bit off topic but, does anybody know if you can buy a frameset through the cycle 2 work scheme? Had a look through various sites and can't seem to find any info on it. I've seen The Dolan website is signed up to the scheme and was looking at getting the Dolan track champion frameset, £350.

Yes you could get anything you want, as long as you are free to shop around various Cycle to Work providers. If your work have a single provider who only deal in complete bikes then you may struggle.

Yes you could get anything you want, as long as you are free to shop around various Cycle to Work providers. If your work have a single provider who only deal in complete bikes then you may struggle.

STOP PRESS;

HMRC have recently lost a case before Euro Courts, which means that employers will have to charge VAT on benefits provided to employees, from 1 January 2012.

This may have a bearing on Cycle to Work schemes with a salary sacrifice element.

If it does effect Cycle to Work schemes, get in now before Jan 2012 ? Or would something like this still effect you if you'd taken out a hire agreement before this date ? I was eyeing up some Campag Zondas and Athena groupset as my third cyclescheme purchase