Cyclescheme, doing it yourself

norleywood77
norleywood77 Posts: 14
edited July 2007 in Commuting chat
Has got any tips/experience in setting up bike 2 work through their own business, ie not using boost and cycle scheme.

My father in law runs a business and he employs one other person, my wife. She's well keen to get a new bike. So just wondering if its pretty straight forward, or is it worth using one of the dedicated companies to help implement it?

Any info is greatly appreciated.

Thanks

Comments

  • Massimo
    Massimo Posts: 318
    To be eligible for the Ride2Work scheme your wife must be on PAYE. If that's the case - there is no problem. My company signed up with Evans Cycles - their web site has all the info including a nifty calculator to work out the savings... :wink:
    Crash 'n Burn, Peel 'n Chew
    FCN: 2
  • norleywood77
    norleywood77 Posts: 14
    Massimo wrote:
    To be eligible for the Ride2Work scheme your wife must be on PAYE. If that's the case - there is no problem. My company signed up with Evans Cycles - their web site has all the info including a nifty calculator to work out the savings... :wink:


    Yes she 's is PAYE, pays tax everything above board.
  • RufusA
    RufusA Posts: 500
    If it's a 2 person company (like mine) then don't bother with a scheme, and don't bother with the salary sacrifice.

    Simply get the company to buy the bike(s) and safety equipment from an LBS.

    The company can capitalise the cost, and loan the bikes to the employees. If at some indeterminant point in the future the company wants to sell the bikes to the employees at their book value - all well and good.

    There is no additional paperwork required all covered in the Finance Act 1999, and their accountant can advise if they get stuck.

    If it's any help this is exactly what my company has done.

    Rufus.
  • avdave
    avdave Posts: 42
    Rufusa is right. The company can buy the bike and write it off against tax in the first year, and if they are VAT registered they can reclaiim that as well. The only thing to bear in mind is that the company is responsible for maintaining the bike in a safe condition. I've done it this way and it really is simple.
  • Wynne G Oldman
    Wynne G Oldman Posts: 266
    I work for a small branch of a bigger company. There's only four of us. I asked the boss to sort me out on the cycle2work scheme, and he had no problem with it. I got my bike within about four weeks of setting the scheme up. I just pay the monthly salary sacrifice, and the bike's mine after 12 months, without paying any extra. I think I will pay roughly £380 for a £679 bike. Well chuffed! :D
    "on your bike" Norman Tebbit.
  • RufusA
    RufusA Posts: 500
    Wynne G Oldman wrote:
    ...and the bike's mine after 12 months, without paying any extra.

    Careful - there may be tax implications. AFAIK if the company gives you a 12 month old bike for free, then it could be argued that it is a benefit in kind and taxed as such.

    In reality it would be a harsh tax office that investigated, and I imagine the negative publicity wouldn't do much the Gov's supposed green credentials.

    Rufus.
  • RufusA
    RufusA Posts: 500
    avdave wrote:
    The company can buy the bike and write it off against tax in the first year...

    Do you have any details on this. My accountant suggested a maximum First Year Capital Allowance (FYA) of only 40% for a bike purchase.

    Though if it bought a low C02 car, it would get a 100% FYA!

    Rufus.
  • avdave
    avdave Posts: 42
    Rufusa, I got all my information from the head of the Halfords scheme. When I went into one of their stores just over a year ago they of course knew nothing about it but were able to give me the number of the guy at head office who ran the scheme. It was he who informed me both of the tax situation and the health and safety implications if the company bought a bike which would be avaiiable for staff to use. He seemed pretty knowledgable and informative about the scheme and different options availiable and i went on his advice. On another point one simple thing that should be done is to add bikes to those essential items which are zero rated for VAT. Perhaps we could get a campaign going on this new forum to that end.
  • doyler78
    doyler78 Posts: 1,951
    RufusA wrote:
    Wynne G Oldman wrote:
    ...and the bike's mine after 12 months, without paying any extra.

    Careful - there may be tax implications. AFAIK if the company gives you a 12 month old bike for free, then it could be argued that it is a benefit in kind and taxed as such.

    In reality it would be a harsh tax office that investigated, and I imagine the negative publicity wouldn't do much the Gov's supposed green credentials.

    Rufus.

    Futhermore than that there can be no automatic right to buy as this changes the nature of salary sacrafice to higher purchase and these do not fall within the scope of the scheme. At the end of the loan period then the company must decide what it wants to do with the bike. Either keep it or dispose of it. You do not own it until the end of the period is up and you pay the market value for the bike. Until then it remains the property of the company and you do not have a right to claim this bike inspite of the loan payments made even if at the end of the loan period. Highly unlikely that any reputable company would decide to keep the bike for themselves if they valued their reputation however it would be perfectly legal for them to do so.

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