Cyclescheme..
Comments
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Which is correct, as you entered a Hire Agreement and because it is a Hire Agreement there cannot be an automatic entitlement to purchase the bike at the end. If you had of been given an automatic purchase entitlement, you would loose the Income Tax and National Insurance benefits of the scheme.bamba wrote:Just found a copy of my hire agreement. The only payment it mentions is the 12 monthly payments that i pay.
I'm not defending HMRC or the Cycle Scheme Administrators (In fact I am quite anti Cyclescheme because they appear to be the only real winners here) but consumers up and down the country view the scheme as a way of buying a bike. This is probably because the cycle retailers promote it as such. The truth is the consumers should view the scheme as a hire/rental scheme and nothing more. The only purchasers are the employers, who are paying for the bikes and renting them to their employees. At the end of the hire period the consumer will them get the option to purchase the bike at FMV, if they so wish. Again because there can't be a automatic entiltlement to purchase, you can't be told what the purchase fee will be although the HMRC recommend 25% as being a fair FMV of the original purchase price.
To be honest, I think this is a fair figure because we all know that you can't buy a year old bike for 25% of the original cost. You only have to look at ebay to see that 2 and 3 year old bikes are still selling for more than 25% of the original cost! If the HMRC really wanted to be awkward, they could quite easily work out what 1 year old bikes are selling for on the 2nd hand market and apply average FMV's based on the true selling prices. Although that would be the final dagger in the feasability of the scheme!
If your scheme is administered by your employer, they may be approachable to the idea of selling the bike to you at a minimal/nominal fee. You would them be responsible for BIK between the nominal fee and the recommended 25% FMV. However if your scheme is administered by Cyclescheme etc they will either work to the 25% recommendation or offer you an extended hire period for a fee. They want you to take the extended hire option because they get additional income from you for doing so! As i said earlier the only real winners here are the administrators! :evil:0 -
Well you've speed the cost over a year and saved 150 quid.
Anyway, I thought the changes didn't mean you'd have to pay, for example, #250, at the end. Just that you'd be liable for tax on #250 of 'benefit' from your employer, in the form of a bike. So you'd pay the same as you'd pay on #250 of wages.0 -
bails87 wrote:
Anyway, I thought the changes didn't mean you'd have to pay, for example, #250, at the end. Just that you'd be liable for tax on #250 of 'benefit' from your employer, in the form of a bike. So you'd pay the same as you'd pay on #250 of wages.
I think that was just a one of case from m1tch666 at this top of this page, i'l have to wait til june time to see what my company will or wont do,
In the mean time ive been touch with the people who provide our scheme(they do a whole host of different stuff besides bikes) to see if they are any ways out of it but being as its the government they do what the feck they want.
been in touch with cyclescheme to who advice on extending the hire period for up to a further 3 years, where would pay a 7% deposit, no further payments an keep the bike at the end. whether you keep the bike in that time is a different matter i suposse, and your free to sign up for anoher bike after the intial 12 months as the extended period is with cyclescheme ,not your employer0
