Cycle 2 Work Advice

dillonw

I've had a look around and can't really find any advice on what I need to know...

Basically I want to go on the scheme to get a new bike but... and this is a big but I will also be using my car a fair bit at work as well.. 2/3 days a week I am out meeting clients and racking up a few miles so i claim a lot of business mileage.

On the other 2/3 days I am happy to cycle into the office.. As I believe, you have to cycle half the time ??

Does anyone have any experience of this ? I have asked our accountant but he looked a bit blank and hasn't got back to me !!

soveda

The bicycle needs to be used "predominantly" for work related purposes.
In some companies you can't be on the cycle scheme and claim for car mileage because it's and either/or proposition (company bike instead of company car-ish)

dillonw

thats what i was thinking

i dont think my accountant wants to sort it as it's another headache for him !

amaferanga

I thought that the bikes use had to be 50% for commuting/business. So you could ride it only twice in a year, but provided one of those times is commuting to work you'd be okay.

No-one's checking up on the bikes use though.

CiB

The reality is that there's no requirement to log commute miles and no-one checks on it. There's no minimum mileage / ratio of days cycle to driving. You buy the bike, and cycle to work on it once and you've done as much as a large number of other people have done.

father_jack

Should be forced to ride to work, in all weathers. Penalty 15 years in a Siberian gulag.

dillonw

lol my office isn't actually that far from my house but i tell you what.. there's a big f off hill in the middle of it !!!

so basically... if i put the paperwork through at work and get the bike nobody is going to query the fact that i'm claiming car mileage ?

i can understand that nobody would check the bike mileage but my worry is that someone says.. hang on, your claiming all these miles, why have you gone and got a bike ??

ilm_zero7

I have a friend who bought a flash carbon frame bike through the C2W scheme but only to convert his old bike into a commuting bike - not strictly correct but the same end result of lass car use and fitter cyclist

ex-pat scot

You ahve to declare that it is your intention that the bike be used more than 50% for commuting purposes.
NOT that you will commute more than half of your total commutes on it.

You are not required to keep detailed records.

It is not intended to replace company car ownership.

It can be used legitimately to support car use: my purchase was a Brompton so I could cycle the last 3 miles from my park n ride.

In practice, if you have used your bike for any commuting then you'll be fine. I guess.

dillonw

thanks es-pat scot..i actually just re-read the bit about 50% and you are right

but seriously, why even put that legislation in when they have no way of policing it! madness

i think the way i would do it is drive around and see clients as per usual a few days a week and then cycle in the remainder

e999sam

Our scheme at work will start assessing bike ware at the end of the lease period this will set the residual value so if you haven't used it much you will have to pay up to 25% of the bikes original value.

wiffachip

e999sam wrote:

Our scheme at work will start assessing bike ware at the end of the lease period this will set the residual value so if you haven't used it much you will have to pay up to 25% of the bikes original value.

no you won't, but you may have to pay tax and NI on 25% of the original value. That's on a 12 month old £1000 bike

e999sam

wiffachip wrote:

e999sam wrote:

Our scheme at work will start assessing bike ware at the end of the lease period this will set the residual value so if you haven't used it much you will have to pay up to 25% of the bikes original value.

no you won't, but you may have to pay tax and NI on 25% of the original value. That's on a 12 month old £1000 bike

Thats not how the memo read to me I'll check it out again and post it.

wiffachip

e999sam wrote:

wiffachip wrote:

e999sam wrote:

Our scheme at work will start assessing bike ware at the end of the lease period this will set the residual value so if you haven't used it much you will have to pay up to 25% of the bikes original value.

no you won't, but you may have to pay tax and NI on 25% of the original value. That's on a 12 month old £1000 bike

Thats not how the memo read to me I'll check it out again and post it.

go on the cyclescheme website, it's all there in black and white ( toon army)

kingrollo

The fair market value guidance has changed. I borrowed £1000 under cyclescheme - my repayments totalled around £650 - then I had pay 5% to transfer the bike to my ownership - so I saved £300 - worth doing.

But now the guidance is FMV - of around 30% -that would mean my final payment being around £300 & my total savings slashed to just £50 - beyond the interest free loan its barley worth doing.

wiffachip

there is a table of FMV's published by HMRC and 25 % is the max and you wouldn't have to pay that, but you may have to pay tax and NI on it

it's all on the cyclescheme website

there's lots of scaremongering going on about this

rolf_f

dillonw wrote:

so basically... if i put the paperwork through at work and get the bike nobody is going to query the fact that i'm claiming car mileage ?

Do you claim mileage for your commute?!! The only issue about mileage claims and C2W I am aware of is that you can't claim business cycle mileage (ie miles riden for work purposes rather than commuting) and be on the scheme at the same time. Home to work is normally your own time and isn't claimable under any circumstance.

The scheme is focussed on Cycle to Work - not Cycle for Work

CiB

kingrollo wrote:

But now the guidance is FMV - of around 30% -that would mean my final payment being around £300 & my total savings slashed to just £50 - beyond the interest free loan its barley worth doing.

Options:

Pay the FMV and live with it - worst option in reality.

Don't buy the bike for another 12 months, when the FMV will be much lower.

Buy the bike at 5% instead of FMV and pay 20% tax on the taxable benefit of £250 (300 - 50), which would be £50.


Obviously your employer has to go along with the second & third options, but it's worth investigating rather than just giving in to the new HMRC guidleines if you find yourself in that position again.

e999sam

This is the memo we received a couple of weeks ago.

This notice will affect anyone joining the cyclescheme after Thursday
30th September 2010.

Cyclescheme will be phasing in the Transfer of Ownership Condition
Assessment (this is the amount the employee pays to Cyclescheme to gain
ownership of the cycle) by applying the following to all vouchers
requested after 30th September as follows:

These conditions are applied to cycles only not accessories.

Condition A - 20% plus VAT
Cycle ridden infrequently and little exposure to the elements

Condition B - 15% plus VAT
Cycle used regularly and moderate exposure to the elements

Condition C - 10% plus VAT
Cycle regularly used and substantial exposure to the elements and a
significant number of parts and consumables need replacing.

Condition D - 5% plus VAT
Cycle frequently used and many part and consumables have been replaced
(brake blocks, tyres, cables, chain) Show signs of significant wear and
tear will be obvious and prolonged exposure to the elements

I will endeavour to put more details in the WIS this week

Hrun

e999sam wrote:

This is the memo we received a couple of weeks ago.

This notice will affect anyone joining the cyclescheme after Thursday
30th September 2010.

Cyclescheme will be phasing in the Transfer of Ownership Condition
Assessment (this is the amount the employee pays to Cyclescheme to gain
ownership of the cycle) by applying the following to all vouchers
requested after 30th September as follows:

These conditions are applied to cycles only not accessories.

Condition A - 20% plus VAT
Cycle ridden infrequently and little exposure to the elements

Condition B - 15% plus VAT
Cycle used regularly and moderate exposure to the elements

Condition C - 10% plus VAT
Cycle regularly used and substantial exposure to the elements and a
significant number of parts and consumables need replacing.

Condition D - 5% plus VAT
Cycle frequently used and many part and consumables have been replaced
(brake blocks, tyres, cables, chain) Show signs of significant wear and
tear will be obvious and prolonged exposure to the elements

I will endeavour to put more details in the WIS this week

So, any bits you change due to wear must be kept and put back on prior to the assessment

richardfj

I think thats your works interpretation of the scheme not the rules set out by HMRC...carfeull you could get shafted by someone being over zealous...

In reality your employer can charge you what they like but if it's below the HMRC value estimated end value you will be liable to pay tax on the differnce..

...or you could opt to keep the bike over a longer period say 3/4 years which would then reduce your final value payment significantly (or back to how it was/should be depending on your point of view)

....or hand the bike back to your employers and let them sort it out, obviously you would lose out from having paid the payments you have made to effectively rent the bike but it would be funny if everyoen on your scheme parked all your 'unwanted' bikes in the over zealous accountants office...!!!!

There's a lot of confusion out there re this despite the govt intentions to reduce confusion, my employers have several hundred people on the scheme and they still are compleetly clueless about all this...!!!

The Evans website gives more details but again it's potentially their interpretation of the new rules as they run their own scheme which may or may not be the same as others...

richardfj

I think thats your works interpretation of the scheme not the rules set out by HMRC...carfeull you could get shafted by someone being over zealous...

In reality your employer can charge you what they like but if it's below the HMRC value estimated end value you will be liable to pay tax on the differnce..

...or you could opt to keep the bike over a longer period say 3/4 years which would then reduce your final value payment significantly (or back to how it was/should be depending on your point of view)

....or hand the bike back to your employers and let them sort it out, obviously you would lose out from having paid the payments you have made to effectively rent the bike but it would be funny if everyoen on your scheme parked all your 'unwanted' bikes in the over zealous accountants office...!!!!

There's a lot of confusion out there re this despite the govt intentions to reduce confusion, my employers have several hundred people on the scheme and they still are compleetly clueless about all this...!!!

The Evans website gives more details but again it's potentially their interpretation of the new rules as they run their own scheme which may or may not be the same as others...