Fair market valuation, cycle to work.

2»

Comments

  • Heckler1974
    Heckler1974 Posts: 479
    davman wrote:
    are charging the FMV (25%, which is only a guidline from HMRC) to all those employees who's individual schemes end after August 2010. Not start, end. Hence why i and 12 of my colleagues have been or will be stung.

    Evans appear to be attempting to suggest this is also retrospective, my scheme finished in May and they are still attempting to get 25% out of us at our company.

    I went into this believing I was doing so with my eyes open and with the guidance both of my HR department and Evans, neither of whom mentioned that the FMV was going to be 25% or that the alternative was 7 years not owning the bike (yes 7 years before the FMV is considered negligable according to Evans).

    No idea where I stand legally on this, the paperwork from Evans states it's a pre-contract agreement where clearly as I stopped paying in may, and I have the email from HR confirming my ownership of the bike, the contract ended then?

    Nasty business and has effectively ended the cycle to work scheme.
  • pshore
    pshore Posts: 61
    In my eyes this was a government scheme which was to support cycling to work. The tax man has got involved to implement the scheme but is now applying the letter of the law. They could be turning a blind eye as they did before.

    We need to find out which minister or government department has started this change. I want to hear it from the horses mouth rather than them being shielding by the tax office.

    What are the CTC or other cycling organisations doing about it ?

    Grrrrr.
  • nightoff
    nightoff Posts: 32
    When my scheme ends next year I don't fancy paying the £212.50 to take ownership. I was expecting to pay nearer £42.50 based on a FMV of 5%.

    Things are pretty relaxed where I work and I was hoping to get around this by refusing to buy the bike at the end, then place an advert in Freeads saying the bike has covered 6000 miles. Has a dent in the top tube. Needs a new chain, sprockets, rims, tyres etc and stick it on at about £40-£50 and buying it that way. It's either that or wait the 6 years to get it at 0% FMV.

    The tax man wouldn't know who bought the bike as it is a public sale (at least in theory. If anyone phones it will be sold). The price advertised would reflect the condition of the bike as described which wouldn't be too unbelievable from that kind of mileage.

    Can anyone anticipate any problems doing this?
  • RufusA
    RufusA Posts: 500
    davman wrote:
    ...This was for a £650 bike...one of which was to pay £175 to obtain ownership of the bike.

    ...There is no way it's worth 25% of the original price...Might not even be worth 10%.

    Is this your Cotic Roadrat with Alfine Hub you are talking about?

    Are you REALLY saying you don't believe it is even worth £65!

    I'm sure if you put the rear wheel on it's own on ebay it would make nearly £100, and the frame sans components unless badly damaged would easily make the £175 cyclescheme are asking for!

    I don't agree with the way that the cycle to work tax break has been set up, but please don't muddy the waters by saying that HMRC's suggestion of a 25% FMV is anything but fair.

    If you were to personally sell your bike, I doubt you'd accept anything less than £400 for it!

    YMMV - Rufus.
  • RufusA
    RufusA Posts: 500
    davman wrote:
    ...'extended rental' period of three years is an offer from Cyclescheme. And that will cost me £49. Plus, Cyclescheme will also charge another Final Market Valuation at the end of this extended rental period.

    My understanding of Cyclescheme's offer is that the £49 is a refundable deposit. At the end of 31 months (2 years 7months), they'll offer to sell you the bike for 7% of the cost (£49?) less the deposit. So in effect you won't have anything more to pay except the continuation fee.

    http://emails.cyclescheme.co.uk/files/m ... erfaqs.pdf

    Rufus.
  • Big Dave
    Big Dave Posts: 85
    I think what has happened is that somebody at HMRC has cottoned on to the fact that the Cycle to Work Scheme has been used to fund a bit of a mini boom in the UK bike industry. Most of the bike shops in my local area have done very nicely out of it, manufacturers are selling bikes specced to come in at the £999.99 limit of the scheme, and there are a lot of very shiny well specced bikes now on the roads and trails. If a few extra cheap utility bikes were sold on the back of the scheme HMRC would have stayed well away as it would have been off their radar; the sums of money involved would have been relatively small.

    However, HMRC have finally realised that bikes can be quite expensive, that they are missing out on tax revenue and they now want the books to balance.

    Nothing lasts forever and in my experience nothing stands in the way of the tax man. I reckon cycle to work will be dead in the next 6-12 months.
    _______________________________

    I ain't fat, merely optimised for gravity.
  • redwinnie
    redwinnie Posts: 42
    My bike cost £575 therefore over the £500 limit, but with VAT that my company paid (and I don't in my payments) taken off cost under £500. Will I therefore get stung for the 25% fee? Can't seem to find an answer.
  • nightoff
    nightoff Posts: 32
    redwinnie wrote:
    My bike cost £575 therefore over the £500 limit, but with VAT that my company paid (and I don't in my payments) taken off cost under £500. Will I therefore get stung for the 25% fee? Can't seem to find an answer.

    As I understand it, it's the value of the voucher that counts. I was told I cant just buy the bike and leave the accessories. It's all or nothing.

    So, if your voucher value was more than £500 you will need to pay 25% of that amount.

    Please correct me if i'm wrong.
  • RufusA
    RufusA Posts: 500
    redwinnie wrote:
    My bike cost £575 therefore over the £500 limit, but with VAT that my company paid (and I don't in my payments) taken off cost under £500. Will I therefore get stung for the 25% fee? Can't seem to find an answer.

    All you need to know is:

    http://www.hmrc.gov.uk/manuals/eimanual/eim21667a.htm

    "It is acceptable to use the VAT exclusive amount in calculating the original price of the cycle"

    "However, where ...a percentage of... VAT exclusive amount..[is used]. VAT will need to be added to the result in order to arrive at the acceptable market value"

    "Where used regularly for commuting and/or travel between workplaces, safety equipment worn by the cyclist is likely to have a market value that is lower than the table percentages for a cycle and cycle-based safety equipment."

    HTH - Rufus

Categories