Cyclescheme and Final Payment

spongtastic

well a work minion asked whether they'll be charging the HMRC values when they administer final payment and this was the response:

"We have been aware of this EIM update since March 2010 and have been shaping our end of hire process to ensure its continued compliance with HMRC ruling. Since initial guidance on the matter was published by HMRC in December 2009, Cyclescheme has been developing and testing a simplified 'Condition Assessment' (CA) process.

The HMRC Valuation Table is an administration easement, to be used if no 'contemporaneous evidence' can be supplied as to the Market Value of the bike. Cyclescheme's new Condition Assessment Process is a means of collecting the necessary evidence, and thus negates the need for the Valuation Table to be applied.

We shall be launching our new process across our client base very soon, so the administrator of your scheme will have received an email containing further information in the near future. I appreciate your patience until such time as your scheme administrator has been notified of the process and can disseminate this to staff members."

bails87

Thanks.

But, in English?

kona_matt

sounds like my HR department drafted that one

spongtastic

In english,

So you don't have to pay the £250 HMRC are suggesting for a £1000 bike on top of your rental payments, Cyclescheme are coming up with a condition assessment form that will prove the bikes value is minimal.

bails87

Ahhhh.

Why can't they just say that?! :roll:

Edit: But you wouldn't have to pay the £250 anyway. You'd pay an amount agreed with your emplyer, e.g. £50. Then you'd be liable for tax on the 'benefit', so £250's worth of bike for £50, benefit of £200, so you pay income tax at whatever band you're in on that £200

Edit again: Ah, so if they say the bike was worth £60, and you paid a £50 fee, you'd only be liable for tax on that £10 difference. Now I get it!

kona_matt

excellent, thanks for the translation

spongtastic

Bails - You'd also only pay the £10 off over a year, as it would be deducted from your tax code.

kona_matt

any idea when this is going to be applied? i'm already signed up to the scheme so would it be applicable to me or is it only applicable for those signed up after HMCR made this decision?

spongtastic

I think it's applicable to anybody who's in the scheme. There's no date on the HMRC guidance.

If the scheme's administered by your employer I'd suggest you make the final payment and then suffer the tax liability, or if your employer is really nice get them to transfer the bike to you for £1, take a photo of some rusty parts in a pile and send this off to HMRC claiming the bikes worth £1. But that might be cheating.

kona_matt

large company so not so sure my employer would be keen on any "rule bending", in fact, we'll probably be owned by the yanks by then (buy out currently in progress) so i'm sure they'll be even less keen.

can you fake rust!? any other ideas on temporarily making a bike look really crap and worth peanuts?

thedirge

cover it in dry roated peanuts. that would look quite rusty. also a nice protein based snack for the ride home.

spongtastic

cover it in Apollo or Reebok stickers?

projectsome

as long as it's not brought in before september...

*AL*

spongtastic wrote:

Cyclescheme are coming up with a condition assessment form that will prove the bikes value is minimal.

Cyclescheme would, they make a nice wedge of every bike supplied.


Sadly, HMRC smell blood and will continue to peruse the matter until they get what they want.

Briggo

Hold on, whats this condition assesment process?

Collecting the necessary evidence? What they're going to come round and do an inspection?

My employer has no clue what bike I bought, just that I had some vouchers.

Herbie The Dog

spongtastic wrote:

In english,

So you don't have to pay the £250 HMRC are suggesting for a £1000 bike on top of your rental payments, Cyclescheme are coming up with a condition assessment form that will prove the bikes value is minimal.

CycleScheme have floated the self assessment idea but it will need HMRC approval. And that won't happen because everyone will rate their bike a C or a D and there's not enough manpower to do the checks to see that everyone is telling porkies.

fletch8928

So to sum it up, and as I understand it.

You got your bike before jan this year, you fall into the old system of final payment. Your employer kinda decides the % of the final payment to make it yours. After that its down to new rules.

If you want to make your bike look used then I have a great idea, Use It.
Mine is farked, paint chips all over, old rusted chain on hand, just in case, knacked seat, bent rear mech, let alone the snapped hanger.If I wasn't facing a £5 final payment and they wanted to value Cassie she would be pits.