Cycle to work scheme. HELP

baconater

Well i wish i had never entered into this thing.

Got my bike a year ago now and have come to the end of the agreement. get a letter today saying they want another £237 after paying £45 a month for the bike. if i dont pay this they want the bike back in pristine condition. no offence its a mountain bike and ive crashed a few times its definitely not pristine no matter how hard i have tried.

If this is allowed there wasn't really any point in partaking in the scheme as i wouldn't have had to pay much more and buy the bike out right.

I got a whyte 805 and a helmet, and now feel as if im being ripped off!

any one know if this is allowed? or any way i can fight this unfair payment?

Chunkers1980

My bike no longer exists. Most things broke including the frame as it fell in the sea when I crashed, has since rusted away and been scrapped. What do you say to that? Any percent of nothing is nothing.

bails87

Chunkers: You have a requirement to either have insurance or cover the loss yourself.

Baconater: How much do you think the bike is worth in it's current state? You should pay that much, if you can pay less than that, then you've got it cheap.
By 'pristine' they probably mean 'give it a clean'. They can't mean free from scuffs, wear and tear etc.

The payment isn't unfair. It's what was written in the contract you presumably signed! At the end of the contract you can either pay a fair market value to purchase the bike outright, or you can hand it back, or you can pay another fee (another months payment, maybe?) to keep hiring the bike for another 3 years. You keep the bike, pay no more monthly fees, then at the end either hand it back or buy it at a fair market value.

baconater

well i dont think pay pay 783 for a 899 bike is really fair under the scheme that claims to save you tax and get the bike cheaper than market value.

at the moment the bike is probable worth about half of the original price i think, specially after a year and the depreciating value.

Briggo

You sure there was no option to extend the 'lease' which means then in at the end of that you pay a lot less than the 25% you'll be paying now iirc.

cat_with_no_tail

Baconater wrote:

well i dont think pay pay 783 for a 899 bike is really fair under the scheme that claims to save you tax and get the bike cheaper than market value.

at the moment the bike is probable worth about half of the original price i think, specially after a year and the depreciating value.

£783 for a £899 bike to me sounds like EXACTLY what the scheme is for. It both saved you tax AND got you the bike cheaper than market value (£116 cheaper in fact).

What you THINK the point of the scheme is, is quite frankly, irrelevant. What did you agree to when you signed the contract? I am almost certain all this is in there.

benpinnick

You can't fight it, that's the contract, however it's unlikely they'd not have a much better alternative. Who is the scheme run by?

baconater

Nationwide.

but in the contract it talks about the current market value of the bike at the end of the scheme and the market value of a 805 which is a year old isn't 750

Chunkers1980

Yes, but what insurance companies pay out if it's sheer neglect? Sounds amazing, I'll buy a bike insure it, spray it with salt water every day for 2 months before the cover runs out, say it's fcuked, with pics, and you must buy me a new one for the excess? What a plan...

cat_with_no_tail

No, the current market value (as far as their concerned) is £237.

You've been leasing it off them for the last 12 months. You can now opt to buy it at the current market value.

At least, that's how it's always been explained to me.

I have always wondered though. What happens if you turn round and say "nah, it's worth £50, take it or leave it".
Would the company take it back? If so, what would they do with it? Does it go to your employer? In which case, wtf are they going to do with a 2nd hand mtb

baconater

also when i took the policy out, the guy in the shop said no one has ever been asked to pay market value blah blah blah and also when i asked on here before i bought it, no one had been asked to pay at the end

Chunkers1980

Depends on your accountant I suppose. If they can pay less tax and you can point them in the right direction to sort you out. They can invite them for a field visit to come and see what's left as it's their property, not yours. Think they'll bother?

MarksMintness

Agree with bails87, there should be 3 options, including a one-off payment to continue using the bike for another 30 months. During this period the ownership of the bike transfers from the employer to your Cyclescheme provider.
I've had my letter through as well and I'll be plumping for this option, as it seems the best value. During this period you can't sell the bike, and at the end I imagine I will be offered the kit for a very small amount to buy it outright.

You are kind of right in the sense that if you were looking at it as a cheap way of buying a bike it's not as good value as it at first appeared, but then this was an incorrect perception. At the end of the day if you don't want to pay any more money for the bike you have then you can just give it back. At the end of the day you've not been paying instalments to buy the bike, as it is a hire agreement and therefore the equipment belongs to someone else, either your employer (they payed for the bike up front remember) or the Cyclescheme provider depending on what stage of the process you are at.

Cheers

csmith319

As I understand it - he final payment amount is discretionary to your company, however the guidance from HRMC changed in the last year or so, I believe to say that people should pay 25% (I think!) to take ownership of the bike - there should be other options, including continuing to lease the bike (at a lower cost) for a further period of time.

As I say though - I believe the figure is guidance - my company has just charged me a final payment of £50 on a £1000 bike - i.e. 5%. So it's really if your company understands what they're able to do, or if they blindly follow the 'guidance' they're provided with.

mak3m

must be company dependant

bought two bikes on Cycle2Work

after 12 months i could send bike back, pay market value payment and own the bike or rent it for a further 3 years by paying a 13th monthly payment equivalent to the previous monthly payments.

went for 3 years rental end of which the bike (or whats left of it) is mine

simples

supersonic

Be thankful the company doesn't think it's worth "half the original price" or you might have been charged 450! But if they have said 237, then the condition should reflect 237, pristine contradicts that.

baconater

surely if i took the 3 year option, continuing paying 45 pounds a month, i will be paying way more than the bike is worth>??

cooldad

Read it again. That's not how it works.

castlelad

Baconater wrote:

surely if i took the 3 year option, continuing paying 45 pounds a month, i will be paying way more than the bike is worth>??

You won't be paying £45 per month for another 3 years, it's a one-off payment of a certain percentage...25% if the bike and accessories are over £500 if i'm thinking correctly.....i did that option last year but only had £432.96 and had to pay £13.21 for the three year option,but it wasn't 25% i paid tho....i know 3 lads at work who stopped paying last feb, due to our company changing providers who "forgot " to keep taking their payments from their wages......the jammer feckers!!

cooldad

Have you actually read the agreement you signed?
Might be a good idea.

castlelad

Probably not, infact i bet quite a few don't.

Thewaylander

Also i'd like to point out the fact even though it's a mountainbike that doesn't matter.

You bought it as cycle to work for the tax break, which means that for the time before you buy it, you are renting it "a lease" and the requirments for the tax break is that most of its work is getting you too and from work, so if you say i've damaged through excessive off road work, that isn't on your way to work your probaly outside your agreement.

Using the cycle to work scheme to buy a moutnain bike that you don't use as one of your main forms of work transport is fraud! it's theft it really is that simple.

EH_Rob

A bit off topic maybe, but I don't think it is that simple. I got an mtb through the scheme, but I have another bike I commute to work on. I still use the bike I didn't get through C2W to get to work and the mountain bike at weekends.

As far as I can see paying a tax free lease for a bike that I was perfectly entitled to apply for probably doesn't make me a thief.

This comes from cyclescheme FAQs:

Does the bike have to be used for commuting?

Employees should use the bike mainly for commuting to and, if relevant, between work places (at least 50% of the bike’s use should be for work purposes). However, the bike can also be used for non-work purposes and there is no need for employers to monitor individual usage or for employees to keep a mileage log. Please note that employees cannot claim business mileage allowance with a bike that is being hired to them by their employer.

I know this isn't contractual, but it's wording does suggest to me they expect (and probably don't have any intention of stopping) people buying bikes for other purposes.

diy

So someone has said - here's the deal, don't worry about what the contract says, thats not how we do it. We say a and we do b. We say a, just to cover the tax.

I'm with c2w and I am under the impression I will either have to pay tax on 25% of the value or I will be offered an extension.

You may be misunderstanding that your payments are from your gross pay, not net, so depending on your tax band a £900 bike could cost you £1000 gross and still save you money.

bails87

Thewaylander wrote:

Also i'd like to point out the fact even though it's a mountainbike that doesn't matter.

You bought it as cycle to work for the tax break, which means that for the time before you buy it, you are renting it "a lease" and the requirments for the tax break is that most of its work is getting you too and from work, [1] so if you say i've damaged through excessive off road work, that isn't on your way to work your probaly outside your agreement.

[2]Using the cycle to work scheme to buy a moutnain bike that you don't use as one of your main forms of work transport is fraud! it's theft it really is that simple

1. Wrong.

You're allowed to use the bike off road, there's nothing in the contract limiting the bike's use to purely commuting.


2. Wrong.

50% of the bike's use should* be to and from work. So you can use it once for 20 miles of commuting, and then take it round Cwm Carn twice (~15 miles?), then put it in the shed and not touch it for a year. You can then ride to work on a more suitable bike, drive, get the train, pilot a microlight, go by helicopter, whatever. It only says that 50% of the bike's use should be commuting, there's nothing about a certain amount of commuting done by bike.


*whatever 'should' means. Does it mean 'must'?

diy

anyone who thinks fraud and theft are the same thing is really simple

Thewaylander

Actually it is a tax fraud,

As it states 50% use, most people don't do it, and the release for the adding back of VAT recently in the tax rules was basically stated as a discouragement for the scheme as it couldn't be policed clearly. hence why it also says you do not need to keep track of it.

But if your not using the bike 50% of the time for commuting your commiting tax evasion, Fraud(not paying over something you owe too can be classed as a theft also)(its like saying shop lifting isn'ta form of theft you moron since you called me simple )

The whole final payment though that the thread started with was brought into to try and control the final market value payment, as people were just paying £5, basically again performing tax evasion that they couldn't easily police. I put a penny to a pound that the cycle scheme only has a few more years left much like the bus scheme.

bails87

But fraud isn't theft. It's fraud. I think that's what diy was saying.

How many people don't do 50% of their 'bike miles' while commuting?

handful

To the OP, this is very employer specific. I'm currently paying for a bike on Cyclescheme for 12 months but the agreement is a 36 month agreement. Therefore the bike is paid for in 12 months and I continue to lease the bike for a further 24 months by which time the HMRC 'fair market value (FMV)' for a bike that started at over £500 is 12% or £120 in the case of my £1000 bike. Your FMV is 25 % after 1 year.

Now in the case of my employer, they 'give' the bike to me after the 36 months and I have to pay tax on the £120 as a BIK (Benefit in Kind) A lot of my colleagues where I work didn't understand this and it put them off buying whereas in reality you are taliking about 20% of £120 for a standard tax payer, £24 in total. Read your contract and check whether you have similar terms, you may only need to pay tax on the £237.

Thewaylander

bails87 wrote:

But fraud isn't theft. It's fraud. I think that's what diy was saying.

How many people don't do 50% of their 'bike miles' while commuting?

Not hugely in my form, if owe someone £50 and refuse to pay it, thats not so far different in my mind that jsut taking £50 from them.

And myself which is why i never bought one through the scheme its fraud. fricken tax evasion is a nightmare for the authorities to deal with and the worst offenders are end buyers and small traders.

bails87

Thewaylander wrote:

bails87 wrote:

But fraud isn't theft. It's fraud. I think that's what diy was saying.

Not hugely in my form, if owe someone £50 and refuse to pay it, thats not so far different in my mind that jsut taking £50 from them.

Eh? :? Fraud isn't theft. Just like drink driving isn't theft and handling stolen goods isn't theft and GBH isn't theft. they're different offences! I'm not saying it's not wrong or not against the law, I'm just saying it's not theft.

Thewaylander wrote:

bails87 wrote:

How many people don't do 50% of their 'bike miles' while commuting?

And myself which is why i never bought one through the scheme its fraud. fricken tax evasion is a nightmare for the authorities to deal with and the worst offenders are end buyers and small traders.

So..... one person? And if you'd bought a commuting bike then you'd have used that for commuting and used the Mondy for MTBing. The 50% thing doesn't apply to riding other bikes you might own!