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Cycle Scheme - Can i have more than one agreement at a time?

Will NunezWill Nunez Posts: 203
edited December 2011 in Commuting general
My company does the cycle to work scheme.

I took out an agreement last January and it comes to an end this december. To avoid the new HMRC stipulation that, should the company sell me the bike at the end of the hire I have to pay FMV of 25%, they have put a new hire agreement in place for a further 3 years (with no hire payment ). At which point I can pay the FMV after 4 years.

However the company has deemed that I cannot have 2 agreements at any point, therefore meaning I cant get a new bike on the scheme for 4 years. My yearly mileage is 8000 miles, 5000 of which are commute based. My bike will be passed its best in 4 years and Ideally I would like a second winter bike to share the load.

I have trawled through DFT and HMRC docs and cannot find anywhere where it says I cant run parallel agreements in subsequent years. My company says its against government guidelines, but I cant find those guidelines. Can anyone shed light on this?

The key article relating to bikes is here is http://www.hmrc.gov.uk/manuals/eimanual/EIM21664.htm

The key article on salary sacrifice is here http://www.hmrc.gov.uk/manuals/eimanual/EIM42750.htm

Neither stipulate any constraint on multiple cycle schemes.

The department for transport regulations state that multiple agreements are permissible and gives the example of a cycle at each end, it does not list the permissable conditions.

The OFT consumer agreement does not limit the number of agreements either.

I am open to being proved wrong but would like evidence. However if what I am saying is right I want some concrete evidence that I can take back to my company as I think its a raw deal
Current Stock:
Carrera Vanquish '08
Orbea Onix T105 '11
Carrera Fury '07

Posts

  • CraggersCraggers Posts: 185
    My company uses cyclescheme and I got a second bike on it about a month after my first bike finished (i opted for the small payment/extended use agreement). According to the HR lady who administers it at our company it was fine to get a second bike when your first one is still on the extended use agreement.
  • My company says it falls outside of DfT and HMRC guidelines, but my research can't find those guidelines. I think my company are hiding behind ignorance. AFAIK the extended use agreement replaces the original and there is no where in the Ts and Cs of that agreement that says signing this excludes you from additional schemes.
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
  • pdwpdw Posts: 315
    DfT guidelines (http://www2.dft.gov.uk/pgr/sustainable/cycling/cycletoworkguidance/) explicitly allow more than one bike. I believe the constraint is down to the OFT group credit licence, which limits the maximum value of the goods hired to you to a value of £1k.

    I'm not sure how it works if you have an extended agreement, but I suspect that as you're not actually paying rental payments for the additional period, it falls outside of the Consumer Credit Act and therefore the limit doesn't apply. The group credit licence is here:

    http://www.oft.gov.uk/OFTwork/credit-licensing/cycle

    Section 3 of the DfT guidance says:
    3) What value of equipment can be supplied?

    There is no limit on the total value of the equipment including the cycle. It is possible to loan two cycles to one employee if, for example, that employee needed a cycle at either end of a train journey between their home and place of work. (However, please see Section 9.1 where the Office of Fair Trading (OFT) has advised that the group consumer credit licence will cover schemes up to a value of £1,000).
  • PDW thats what i read and thought too. However my company provides upto £1500 on the cycle scheme. I read that there is agenetric licence upto a 1000 pounds, but our company must have applied for its own licence. Once again I can still see no guidelines that state no sequential schemes overlapping. In fact Cycle scheme state using their scheme positively allows it. I have questioned cyclescheme who adminster the vouchers for our company, but because they were not used for the extended agreement cannot comment.

    What I think my company has done is read the above and read into that, that that is the only circumstance where 2 bikes are permissable. But that could be 2 bikes on one scheme. I woant 2 bikes in 2 schemes. I want a winter bike to prolong the life of the other bike. I just wish I could talk to someone who knows this inside out and can either tell me im wrong or provide me with the silver bullet to change my company's policy
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
  • magoo289magoo289 Posts: 216
    My understanding is that can have more than one bike, however we must use both bikes to cycle to work!! For example, if you cycle from home to your local train station, get the train, and then use your second bike from the train's destination to get to work. Not sure how practical this is in terms of security of bikes at the train station.
  • Thats what the Dft state, but they say it as a single example which suggests there are sevral reasons why you would want more than one bike, eg having a bike suitable for the conditions. The only time I didnt cycle to work last year was when there was snow and excessive grit on the roads. If I had a winter bike with the appropriate tyres then I would brave it, the cold doesnt put me off (arrived in work with icicles on helmet in -7C last year :-) ).


    Ive tried cycle scheme, am badgering work. HMRC and DfT dont make it easy to ask questions. Dont suppose any of you guys know anyone involed in this kind of stuff to get the real information
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
  • bompingtonbompington Posts: 7,595
    Once you have finished the original rental period for the bike & the salary sacrifice is therefore finished, you can certainly start a new one, because it is the salary sacrifice that is the legal bit of the cycle to work scheme. It makes no difference whether your bike is sold to you immediately or retained by your employer for longer.
  • pdwpdw Posts: 315
    My understanding is that can have more than one bike, however we must use both bikes to cycle to work!!

    Yes and no. The requirement is that the primary use of the bike is for commuting or other business purposes. What the OP is suggesting - a winter commuting bike and a summer commuting bike - seems within both the letter and the spirit of the scheme.

    Will - sounds like you need to get your work to cite exactly which bit of guidance they're concerned about. Assuming it's the credit licence / maximum value issue, then get them to show you the extension agreement they want you to sign. If it falls under the CCA, I'd expect it to clearly say so. If it doesn't, then any concerns they might have about their credit licence should be irrelevant (I am not a lawyer, etc etc).

    Another avenue might be to point out that the guidance explicitly talks about the idea of "pool bikes" i.e. the company provides a bunch of bikes, and you may use a different one on different days. This sounds pretty close to what you're trying to achieve.
  • TopaxciTopaxci Posts: 106
    Don't rule out silly internal company policy (written or otherwise), even if they are trying to hide it behind the excuse of legislation.

    I administer the scheme for my company and we won't allow people to have two bikes on the scheme at the same time. Not because the scheme legislation doesn't allow it - as it clearly does.
    This is a credit control decision to make sure people pay for the first bike before being allowed a second. When we first started the scheme we didn't have this and we have several members of staff with a second bike but then stubbornly refused to pay the FMV for the first one (5% back then) or return it.

    Though this doesn't sound like the case with your work now as they allowing extensions to avoid the FMV (I am working on it here) but it could be a hang over practice from something similar.
  • Thanks bompington, pdw and topaxi. The salary sacrifice does end this month. I have already signed the "new agreement". I didnt sign it blind, it states that it replaces the original agreement as a n extended loan of the bike. Fair enough. There are no references to external documents. There is no small print. There is nothing that states that signing this extended lease will exclude me from further schemes. So I signed it

    Pdw I am steadfastly resolute on getting an explanation out of the company. The person I am dealing with keeps saying they used benefits consultants but wont give me more details than that. The usual we take your feedback on board and will consider it for the next scheme. But it will be to late by then if it hasnt changed. It will be another missed opportunity.

    Topaxci I am guessing that is the case, ill thought out legacy policies that are no longer valid. The funny thing is there was never a rule before. In fact the chap who sits opposite got 2 bikes on consecutive years in 2010 and 2011 (both before the hmrc change). So the rule was not in place last year.

    If the salary sacrfice is over then i have effectively covered the potential loss of revenue for the bike, so I cant see that as a blocker.

    What everyone here is doing is making me think I am more right than wrong. If ever I get the truth I will feedback, this info may be of use to others
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
  • I was paying for one bike under the NHS bike to work scheme and wanted another and our scheme administrator seemed to suggest I could have more than one bike under the scheme at any time, as long as the total was under £1k. And a friend of mine managed to get two bikes on his scheme simultaneously, and gave one to his girlfriend.
  • Now one thing i do know is he shouldnt give the bike away. Its the property of the company and you are hiring the bike. Its not hire purchase else it would not be tax free. Your friend will have to hope his scheme doesnt do an audit while he is under the scheme.
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
  • A quick ring to DfT resolved things. There is no definitive list of situations where more than one bike is permissable.

    My situationis a valid one, where my summer bike (Orbea) is not suitable for winter commute. So DfT and HMRC are not the limiting factor here.


    However I can only have bikes upto the value of the consumer credit agreement in place. I amnot sure what this is as the limit for CycleScheme is £1500 so it is not using the standard OFT cycle licence.Wether the limit is £1500 and I amup toit or wether it is more,I have yet to find out!
    Current Stock:
    Carrera Vanquish '08
    Orbea Onix T105 '11
    Carrera Fury '07
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