ride2work

perrin on red

My employer has instigated the ride2work scheme. I'm interested in taking advantage of it, but after reading the small print, it seems that the employer not the employee owns the bike even at the end of the payment period.
The employer has to transfer ownership to the employee, usually for a nominal fee. My worry is that there is no legal obligation for the employer to do this.
Does anyone have experience of the buying a bike on the scheme? Was the transfer of ownership completed okay?

drewfromrisca

I work as a Police Officer for the Met, although a lot of people took up this great offer a few including me were worried by this 'small print' also and didn't take up the offer. I decided to wait till after the year and everyone had paid up which will be next month.

On another point with the scheme, a mate of mine who was a community support officer then became a police officer and was told that he had to pay the full amount for the bike back, even though he is with the same force!!! Because he has resigned his post they are saying that he has effectively quit his current role and left the company so the scheme requires him to pay for the bike's ownership. Food for thought there if your thinking of quitting.

carlstone

You are right there is no legal obligation to do this. Also it cannot be written into the initial contract as this would make it a hire purchase agreement and so would not attract the tax breaks.

You have to read between the lines and trust your employer :shock: :twisted:

If you do leave while the agreement is in force then the bike remains the property of the company so they can just take it back, the same as at the end of the agreement. The 'nominal fee' paid to buy the bike at the end of the agreement hasn't been tested in court yet (to my knowledge) so the 5% after 12-18 months which is generally accepted could be way out.

After saying all of the above I got my lovely Planet X through the scheme.

Nuggs

If title to the bike remains with the employer, does the contract expressly state that the employee takes the risk?

fluff.

They could in theory charge you a fair market price for the bike after a the loan period, which ontop of the salary sacrifice you'd already have made would probably make it more expensive than just buying it yourself. All comes down to trust and verbal agreements I guess.

cycletowork

It is our understanding that there is nothing to stop an employer having a declared "policy" on the transfer of ownership.

Thus if an employer issued a letter to say "it is our general policy to transfer ownership of the bike to the employee for £1 at the end of the rental period".

To alleviate the concerns of employees who think they may wish to leave a job within the hire period the following could be added.

"our policy on transfer of ownership where employees leave the company during the hire period is that the rental period will end when all outstanding deductions have been made and ownership will transfer for the payment of £1"

Note that no-one loses where an employee leaves a job within a hire period exept the revenue who give away the tax advantages early.

cheers CTW

drewfromrisca

So when my colleague has paid the full amount of the bike back who gets the tax advantages???

drewfromrisca

So when my colleague has paid the full amount of the bike back who gets the tax advantages???

cycletowork

drewfromrisca wrote:

So when my colleague has paid the full amount of the bike back who gets the tax advantages???

OK I did not understand your post at the first time of reading.

cycletowork hire agreements normally have a clause similar to this:

Leaving

If you leave the company or retire within the 12 months of this Hire Agreement any outstanding hire charges remaining on the Hire Agreement will be deducted from your final net salary in the form of a termination fee. If you cannot pay this amount out of your final salary, Employer Ltd can demand payment of any outstanding balance within 30 days.


Thus you just pay the outstanding months at time of leaving.

Why your employer would want to punish its staff in this way I don't know.

Cheers CTW

drewfromrisca

So basically the Met have made him pay back the full amount and taken the money themselves??? Sorry if I seem a bit dull but I'm not up on this type of stuff?

cycletowork

drewfromrisca wrote:

So basically the Met have made him pay back the full amount and taken the money themselves??? Sorry if I seem a bit dull but I'm not up on this type of stuff?

Well far be it for me to accuse the Met of anything! Lets say they perhaps did not administer the scheme in the best way in this case.

The truth is there are not hard and fast rules for the transfer of ownership or cases where employees move jobs part way through a "hire period".

It seems most unlikely the tax authorities would make a case against an individual and punish them and/or their employer because they moved jobs or had to give up work for any reason. Equally importantly I don't think legally they would succeed.

Its a great scheme and I hate to see people put off for reasons such as that.

cheers CTW