Cyclescheme valuation...WTF!!!!

woodchips69

Just received my end of hire valuation for my road bike under the cyclescheme ride to work. Apparently the rules changed after 6th August 2010, which just happened to be just before when my aggreement was due to finish.
I bought through work a Ribble Carbon costing £999. At the time it was said I would have to pay a final "buy it" figure of around 5% of total bike cost (approx. £50).
Now they are saying £250!!!!, or pay £70 now and in effect defer payment for another 29months, when it will then be valued at approx. 5%.
So, by the time I take into account the payments made through my salary, and if I buy the bike, I will have saved sweet diddly squat on the full list price!!!
I may have as well paid cash, or 12 months interest free, in the first place.
Bag of shite if you ask me and a total pointless scheme.

tailwindhome

woodchips69 wrote:

Just received my end of hire valuation for my road bike under the cyclescheme ride to work. Apparently the rules changed after 6th August 2010, which just happened to be just before when my aggreement was due to finish.
I bought through work a Ribble Carbon costing £999. At the time it was said I would have to pay a final "buy it" figure of around 5% of total bike cost (approx. £50).
Now they are saying £250!!!!, or pay £70 now and in effect defer payment for another 29months, when it will then be valued at approx. 5%.
So, by the time I take into account the payments made through my salary, and if I buy the bike, I will have saved sweet diddly squat on the full list price!!!
I may have as well paid cash, or 12 months interest free, in the first place.
Bag of shite if you ask me and a total pointless scheme.

The doesn't sound right. Don't forget that your monthly payment came out of your Gross pay (ie Pre Tax) you therefore SHOULD have saved some cash.

I would challenge the company on the £70 payment now before the extended rental period. There either selling you the bike or they're not

woodchips69

I agree it doesnt sound right. Trying to contact them to sort.
I've paid approx. £650 through my salary, after tax, which if you take 5% final valuation into account would have cost me £700ish for a £1000 bike. Which is how the scheme should work.
However, as I stated in my OP, they've sent me the 3 options of:-
1) £250 to buy now
2) £70 to extend loan for further 29 months then 5% fee
3) hand it back (yeah really!).
Take a look at their website on End of Hire Options FAQ's.

BG2000

I've just gone through the same s**t with Cyclescheme, and gave them a right bo****ing over the phone. I made my final monthly payment last month and expected to pay my 5% to 'keep the bike'.

If I'd taken out my contract with Cyclescheme 1 month earlier (to complete by September), I'd only have had to pay 5%, now it's 25%.

Cyclescheme claim in their contractual small print from 12 months ago that the final value fee could be subject to change. I didn't notice this at the time.

I asked them what guarantee there is following another 3 years, that the 7% won't change, and they said there is none - it's up to HMRC. So the shame thing could happen to us again. And it means I've got to keep the bike for another 3 years (I doubt it'll last that long - that's about 18,000 miles of commuting on rough roads in all weather).

It just shows, we can all prattle on about green issues, making the country cycle-friendly, etc.. but at the end of the day, this is rip off Britain, with joke cycle lanes, and cycling always comes last in any decision making. It's only used as a platform for people to get their 'Green' awards. The only people who give a s**t are those who choose to use a bike for transport - and all this just makes us more bitter...

navt

The £250 is the benefit-in-kind. You only pay income tax on this; £100 if you are a higher-rate tax payer. You're still better off, just not by as much you thought you would be.

You also bought your bike in 2009 when VAT was 15%. The bike is being trasferred to you now at 17.5% VAT.

dugga

So there are two tax points? One at the point of purchase of the bike and one at the point that the OP pays the final payment? That doesn't feel right although of course I'm speaking in purely generalists terms.

To whom is the final payment made - the employer or Cyclescheme?

Is the final payment made as a salary sacrifice or out of taxed pay?

Are other people being hit with the same end of scheme demands from other providers - Halfords / Evans etc?

It seems to me like no more than an overly officious / cautious interpretation of HMRC guidance by Cyclescheme.

On reflecation, I think I was hit with a similar demand from Cyclescheme at the conclusion of myhire period as my employers had allowed the ownership of the bike to revert to Cyclescheme. I complained to my employers who changed their instrucitons to Cyclescheme with the effect that the final payments were assessed by and made to my employer. And at a considerably lower rate, HMRC guidance noted.

Alphabet

as far as i can tell, all the cyclescheme has done is push the price of bikes up in the country to roughly a grand.

woodchips69

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

gtvlusso

At my *new* job - they have just introduced cyclescheme (not bad for a company with 65,000 employees!)

Anyway, allot of "noobs" have taken up cyclesheme, I think they will have a shock next year when they have to pay the final value fee.

As for me, I won't do it again, my last one ended last year and the bike got nicked - so I got insurance money instead and a £25 fee.

There are better deals to be negotiated in shops out there and some low loan rates!

re-cycles

Whats the problem? You chose to buy a bike. No one forced you. You've had 13 months interest free (non-status) credit. And the bike is still costing less than the ticket price. Please explain how you've been hard done by?

W1

woodchips69 wrote:

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

I don't mean to seem unsympathetic, but it is staggering how many people sign up to financial agreements without reading them, and then have a rant when the risks that are outlined come to fruition.

ShutUpLegs

Alphabet wrote:

as far as i can tell, all the cyclescheme has done is push the price of bikes up in the country to roughly a grand.

They probably realised that people using the scheme weren't actually riding to work on them and are now changing the rules to make it less attractive. Pants

hatbeard

W1 wrote:

woodchips69 wrote:

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

I don't mean to seem unsympathetic, but it is staggering how many people sign up to financial agreements without reading them, and then have a rant when the risks that are outlined come to fruition.

I agree but in this case the previous guideline price was set at 5% regardless of age/condition of the bike, the people who are getting the biggest shock are those who signed their agreements before the gov decided to move the goalposts and now are being asked for 5x as much as they were expecting.

anyone who signed up after the rules change who didn't realise what they would have to pay deserve all they get. I did it but I knew exactly what I was signing up to*

*although i reserve the right to rant about the new charges still as they are pretty much b*llocks.

W1

hatbeard wrote:

W1 wrote:

woodchips69 wrote:

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

I don't mean to seem unsympathetic, but it is staggering how many people sign up to financial agreements without reading them, and then have a rant when the risks that are outlined come to fruition.

I agree but in this case the previous guideline price was set at 5% regardless of age/condition of the bike, the people who are getting the biggest shock are those who signed their agreements before the gov decided to move the goalposts and now are being asked for 5x as much as they were expecting.

anyone who signed up after the rules change who didn't realise what they would have to pay deserve all they get. I did it but I knew exactly what I was signing up to*

*although i reserve the right to rant about the new charges still as they are pretty much b*llocks.

I'm pretty sure the "small print" didn't say 5% - I recall it being much more vague than that....

moonio

I would be tempted to give them back the bike..

woodchips69

My point is that they've changed the goalposts from when I signed the agreement. As for the lads at work who have just got bikes, I agree they should have read the very small print but they based it on my original experience, and as I stated there has been no change to the Cyclescheme website, or any communication from our employer come to think about it, to update/highlight this.
I think it might be better to get my employer to get onto Cyclescheme and move the valuations process back to them.

W1

woodchips69 wrote:

My point is that they've changed the goalposts from when I signed the agreement. As for the lads at work who have just got bikes, I agree they should have read the very small print but they based it on my original experience, and as I stated there has been no change to the Cyclescheme website, or any communication from our employer come to think about it, to update/highlight this.
I think it might be better to get my employer to get onto Cyclescheme and move the valuations process back to them.

What's changed in your agreement though? Did you not read the "very small print"?

hatbeard

W1 wrote:

hatbeard wrote:

W1 wrote:

woodchips69 wrote:

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

I don't mean to seem unsympathetic, but it is staggering how many people sign up to financial agreements without reading them, and then have a rant when the risks that are outlined come to fruition.

I agree but in this case the previous guideline price was set at 5% regardless of age/condition of the bike, the people who are getting the biggest shock are those who signed their agreements before the gov decided to move the goalposts and now are being asked for 5x as much as they were expecting.

anyone who signed up after the rules change who didn't realise what they would have to pay deserve all they get. I did it but I knew exactly what I was signing up to*

*although i reserve the right to rant about the new charges still as they are pretty much b*llocks.

I'm pretty sure the "small print" didn't say 5% - I recall it being much more vague than that....

the hmrc small print might not have been that explicit but 5% is the figure used by cyclescheme and the other initiatives in their old illustrations of the charges so it's a fair assumption to make that 5% is the amount you'd be charged.

W1

hatbeard wrote:

W1 wrote:

hatbeard wrote:

W1 wrote:

woodchips69 wrote:

The thing that has pi**ed me off the most is that there has been no communication from them about this at all!
First I knew about it was when I got the email from them yesterday. Surely if the scheme is going to change they should inform you and that people already on it should stay on their original terms.
3 lads at my work have just received their bikes on the scheme and they still think it is based on the 5% valuation at the end. I know it probably says somewhere in the small print about the changes, but Cyclescheme have hardly made a song and dance about it. Probably because they know no-one would sign up anymore!!!!

I don't mean to seem unsympathetic, but it is staggering how many people sign up to financial agreements without reading them, and then have a rant when the risks that are outlined come to fruition.

I agree but in this case the previous guideline price was set at 5% regardless of age/condition of the bike, the people who are getting the biggest shock are those who signed their agreements before the gov decided to move the goalposts and now are being asked for 5x as much as they were expecting.

anyone who signed up after the rules change who didn't realise what they would have to pay deserve all they get. I did it but I knew exactly what I was signing up to*

*although i reserve the right to rant about the new charges still as they are pretty much b*llocks.

I'm pretty sure the "small print" didn't say 5% - I recall it being much more vague than that....

the hmrc small print might not have been that explicit but 5% is the figure used by cyclescheme and the other initiatives in their old illustrations of the charges so it's a fair assumption to make that 5% is the amount you'd be charged.

I think that what's usually said about assumptions is well evidenced from this thread....

tailwindhome

woodchips69 wrote:

My point is that they've changed the goalposts from when I signed the agreement.

I'mm 99% sure that the goalposts shouln't have been set in the first place. My understanding was that under these schemes there could be no DEFINITE undertaking to sell the bike and that a price couldn't be agreed at the start.

People forget that the scheme is for the LOAN of a bike.

moonio

I have jsut spoken my HR and yes they have said that my bike can be sold to me for 17% in January...jesus...Halfrauds...you live up to your name once again..

woodchips69

Well, believe me, I'm not thick and I did read the small print. It didn't state that the final valuation would be 5%, but it did say that it was an approximate figure that was usually used. I could understand a few % difference either way but to jump to 25% is taking the pee.
Also, would I, or any other right thinking person, really pay over £50 a month to loan a bike when you can get interest free payments and own it outright? Hardly. Its done, and marketed if we're being honest, as a cost effective, good for the enviroment and employees health way to have a bike.
Again, as I stated originally, I could have just bought the bike in cash and not had any of this hassle.
Also, I think it needs getting a grip of, because I'm fairly certain that 99% who sign up to this think the same way. Not everyone can fail to read the small print, its obviously worded in a shite way.
How much does Cyclescheme get paid to run this?

W1

moonio wrote:

I have jsut spoken my HR and yes they have said that my bike can be sold to me for 17% in January...jesus...Halfrauds...you live up to your name once again..

I'm not really sure it's fair to blame Halfords for an HMRC decision.....

moonio

True...but didnt they put the price of the bikes up in responce to the scheme?

sketchley

They have changed the rules, they can now work in your advantage

see http://www.bikeradar.com/forum/viewtopic.php?p=16479189

and http://www.evanscycles.com/uploads/File ... mo=Content


and http://blog.evanscycles.com/commuter_ur ... an-for-me/

unixnerd

Isn't the final value based on the condition of the bike? I'd tell whoever asked you for 25% that bike needs a new drivetrain, new wheels, brakes, headset etc. due to wear and tear so is worth much less. A decent spec. crankset plus fitting must come to the best part of 250 before you add in a chain and cassette.

If folk get perks for having a company car I don't see why those who choose two wheels instead should get any less of a deal.

moonio

Intresting, my bike was stolen earlier this year...so how can they palce a market value on a bike i no longer have..

andy83

Im not overly bothered as i new they were changing the scheme and i couldnt afford a bike any other way but just wondered.

I took my scheme out in June of this year, does that mean ill end up paying the higher amount?

dhope

moonio wrote:

Intresting, my bike was stolen earlier this year...so how can they palce a market value on a bike i no longer have..

It's not your bike, you're hiring it, and there'll be a mention of it in the T&Cs

woodchips69

The 25% valuation has been set by Cyclescheme without viewing the bike. My employer has outsourced the valuations back to them to deal with. I think it should be my employer who I need to deal with.
To all those who keep saying we should know it is only a loan of a bike, can I draw your attention to practically every bike website/magazine and the adverts about saving 50% off the price of a new bike. For some reason they don't say "pay upto £60 per month for the LOAN of a bike for a year, then give it back"! Maybe its because they might actually never sell any through it if they tell the truth!!!

Monkeypump

unixnerd wrote:

If folk get perks for having a company car I don't see why those who choose two wheels instead should get any less of a deal.

You don't get perks FOR having a company car - the car is the 'perk' (or taxable benefit), and you pay tax for having it.