Cyclescheme need advice: Left current job in middle of CS

LisaF

I left my previous job half way through my cycle scheme. I had to pay the remainder of the cycle scheme and of course was not tax exempt. So although I'm losing out here, I knew this before I joined so haven't got a problem with this.
I am now however being hounded to either do one of three things now:
1. Pay £69.93 to extend the cycle scheme for another 36 months
2.Pay another £249.75 to take full ownership of the bike
3. Return the bike

I'm obviously not going to do option 2 or 3 because either way would make the bike far more expensive than if I just bought it outright and as I used the scheme to hopefully save money it doesn't make sense to do this.

What I am annoyed about is that technically the hire scheme was for the whole year. I paid over £600 in my final scheme payment when I left my last job but shouldn't this mean that have paid the upfront cost to hire the bike for the whole year? As it stands currently, it seems like i have ended up being charged close to £1k to 'hire' a bike for 5 months. As far as I was aware, cyclescheme don't start contacting you until the end of the 1 year hire period?

Can anyone help me out with this?

Thanks

rolf_f

Look at the terms and conditions. It's a bit crap but it isn't optimised for people leaving mid session. The two fees, as far as I understand it, are to avoid there being any tax issues relating to under valuation of the bike (ie the bike should be worth £250 after one year and £70 after four years) when the ownership is transferred. I think that is a separate issue to the tax saving made by the salary sacrifice scheme. Either way, the t&c's will tell you how it is, fair or not. Of course, it might be arguable that you should pay a higher fee because the bike is only 6 months old rather than one year old!
This is from Cyclescheme:
Once signed, the Hire Agreement is non-cancellable following a cooling-off period of 7 working days following collection of the goods. This means that if an employee leaves or is made redundant from their employment during the hire period they are obliged to pay the remaining salary sacrifice amount in full from net pay i.e. without any tax exemptions.

If applicable, the employee may then be offered ownership of the equipment in the normal way (please refer to 'What happens at the end of the hire period?' above).

For further information please see the Department for Transport’s Cycle to Work implementation guide:
http://www.dft.gov.uk/pgr/sustainable/c ... kguidance/

Ultimately though, the year end costs are unchanged so you have only lost the salary sacrifice element which you knew you would so you'd probably be best off just not letting it get to you!

thistle_

From what you have said, it sounds like it's their standard procedure for when the initial hire period ends. In your case your hire ended early, so they have sent out the options/bill early. This is probably just their automatic systems following the rules to the letter.

Have you tried phoning cycle scheme? That might clear up a few things (or not, depending on how good their CS is)

Just a few thoughts:

Did the last payment you made include the tax/ni on the payments you had made previously? If it did then surely you have paid for the bike outright from them and all they can say you owe is the admin costs or the interest on them financing the purchase (which is presumably what is passed onto the bike shop which is why they don't give discounts)

If they are offering to let you extend the hire, why couldn't they let you keep paying the monthly hour direct to them? If you can extend the hire period, you must still have a hire agreement with them and it's not ended yet?

Option 1 sounds the best, however I think you should try to put off paying it until the end of the initial 12 month period, or ask them to ensure the agreement ends 48 months after it started.

rolf_f

thistle (MBNW) wrote:

Just a few thoughts:

Did the last payment you made include the tax/ni on the payments you had made previously? If it did then surely you have paid for the bike outright from them and all they can say you owe is the admin costs or the interest on them financing the purchase (which is presumably what is passed onto the bike shop which is why they don't give discounts)

If they are offering to let you extend the hire, why couldn't they let you keep paying the monthly hour direct to them? If you can extend the hire period, you must still have a hire agreement with them and it's not ended yet?

Read the terms and conditions. You don't pay back the tax and ni on the previous payments so the OP hasn't paid off that part of the scheme (and she wouldn't have paid for the bike outright until the final payment was made to transfer ownership ie either the £60 or £250 - the whole point of the £250 is that is what you need to pay if you want to take ownership straight away).

Downward

Cheaper to pay the £70 now and the payment to take ownership of the bike in 3 years is going to be much less than the £250 - £70 which is £180.

Cyclescheme are just an admin company who have made a lot of money (25%) from each sale of a bike

Downward

I left my job half way through too, I have though had to pay my old employer for the outstanding balance. As I bought equipment this time no bikes i am not sure if the cyclescheme will ask for money to take "ownership" of these items.

I am pretty sure though the last bike I bought on the scheme I chose to extend for 3 years - That was Feb 2012 ish.
They can have that bike back it's wrecked ! Lets see how they cross that bridge. I bet they would expect me to pay to return it to them.

LisaF

Thanks.

I looked into the scheme a lot before I committed to it. I had always planned to extend the contract as the bike cost me more than the allocated allowance (I paid the dealer the extra amount for the bike) so giving it back is not an option as I would lose out far too much.

My issue is with the fact that I don't feel I should have to do anything before the end of the year because if you are going to charge me for the whole year, I shouldn't owe anything until the end of the agreed contract right?!

I will give them a call and see what they say. Just wanted to see if anyone knew my rights regarding this before i did it,

Downward

Usually it's your employer that get stung.

IE
Cyclescheme won't release the voucher until your company have paid the Invoice from them for the goods. Surely it's your employer that should be chasing you for the money ? Cyclescheme have had the full cost of the bike and the 10% commission from the shop already so they have already had whats owed to them.