How to account for Cycle to work scheme

M_H
M_H Registered Posts: 9 Regular contributor ⭐ ? ⭐
Hi All,

Not a new user, Its just been a while and the forum didnt recognise my email address to reset my password.

I have a question about the best accounting practice for the cycle to work scheme.

I get that you can claim AIA on it, or 20% if AIA is absorbed, and i dont have issue with this. my actual question i guess is how to actually account for it in the books. depreciation, payments received from salary sacrifice etc.

All our agreements are over one year only, from the month of purchase.

Have "googled" it, and nothing really clear stands out...

If anyone could lend some wisdom in this area, I would really appreciate it.

Thanks

M

Comments

  • A-Vic
    A-Vic Registered Posts: 6,970
    M_H wrote: »
    Hi All,

    Not a new user, Its just been a while and the forum didnt recognise my email address to reset my password.

    I have a question about the best accounting practice for the cycle to work scheme.

    I get that you can claim AIA on it, or 20% if AIA is absorbed, and i dont have issue with this. my actual question i guess is how to actually account for it in the books. depreciation, payments received from salary sacrifice etc.

    All our agreements are over one year only, from the month of purchase.

    Have "googled" it, and nothing really clear stands out...

    If anyone could lend some wisdom in this area, I would really appreciate it.

    Thanks

    M

    Are you sure your not allowed 100% FYA under the enviromental aspect ? ring HMRC they will clarify
  • katsutlieff
    katsutlieff Registered Posts: 459
    Sorry I don't have an answer but I am curious as to what AIA and FYA stand for :)
  • mini_schnauzer
    mini_schnauzer Registered Posts: 347
    AIA = Annual Investment Allowance
    FYA = First Year Allowance
  • katsutlieff
    katsutlieff Registered Posts: 459
    Thank you Mini. Feel silly asking but if I dont ask I will never learn.

    Love the picture!
  • mini_schnauzer
    mini_schnauzer Registered Posts: 347
    I only know as I sat BTC in Dec!
    The photo is my puppy Russell.
  • katsutlieff
    katsutlieff Registered Posts: 459
    The NVQ seems to cover different things than the diploma thought I may have missed something

    Russell is very cute.

    Sorry M_H I have hijacked your thread, going to look into AIA and FYA now
  • A-Vic
    A-Vic Registered Posts: 6,970
    simular exams apart from MAC for diploma which ive been told covers the same subject matter as NVQ
  • Toffeemadblue
    Toffeemadblue Registered Posts: 102 ? ? ?
    Hi M H,
    I have been running the cycle scheme for our workers since 2006 and our auditors seem happy with our practice which is as follows

    New bike is treated as an asset added to the FA register and depreciated on a straight line basis over three years.
    We pay weekly so the wage deductions are posted through to a new nominal code (cycle scheme payments) which is income in the P&L. Workers pay for the cycle hire over three years at which point we sell the the bike to them at 2.5% of cost which goes as a profit on SOFA. In theory this is largely profital neutral if you assume that the proceeds on disposal and the saving on employers NI balance out against the cost of the interest free loan.
    Hopefully that is clear if not please say so
    Cheers
  • M_H
    M_H Registered Posts: 9 Regular contributor ⭐ ? ⭐
    Matt - Thanks for your reply.

    Hopefully this will help!

    Everyone else - thread jack apology accepted :-)

    Good luck if waiting on results today!

    Cute dog BTW.
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