CycleScheme

uknitty

Once the employee has paid off the value of the bike through how ever many installments does ownership transfer to them with no further taxable benefit to be declared ?

oakley

http://assets.dft.gov.uk/publications/cycle-to-work-guidance/cycle-to-work-guidance.pdf

the above is a good link and covers several questions raised regarding consumer credit, value of bike and the £1000 limit, there is also no right to buy at the end of the hire period otherwise tax benefits will be lost. We have several bikes that have come to the end of the original hire period and now have to be exteneded for 36 months to receive the lower level of final payment 3% or 7% depending on the value of the bike, otherwise the purchase price to the employee can be up to 25% of the purchase price, see link http://www.cyclescheme.co.uk/employers/employer-updates/hmrc-update

PGM

oakley wrote: »

http://assets.dft.gov.uk/publications/cycle-to-work-guidance/cycle-to-work-guidance.pdf

the above is a good link and covers several questions raised regarding consumer credit, value of bike and the £1000 limit, there is also no right to buy at the end of the hire period otherwise tax benefits will be lost. We have several bikes that have come to the end of the original hire period and now have to be exteneded for 36 months to receive the lower level of final payment 3% or 7% depending on the value of the bike, otherwise the purchase price to the employee can be up to 25% of the purchase price, see link http://www.cyclescheme.co.uk/employers/employer-updates/hmrc-update

http://www.cyclingactive.com/news/cycle-to-work-scheme-10-things-to-know

I've been reading a bit more on there. We're still thinking of doing this scheme, but worried about certain messy bits.

Ideally you want it repaid by the employee over 12 months - but then it needs to be loaned for 4 years ie another 3, to be able to "sell" it to the employee at the end of the period at 3 or 7%.

But during that additional 3 year loan the employee needs to pay a token deposit for the loan.

Does anyone know how strict they are on these deposits and end of loan sales? Just a shame the scheme is so convaluted, its putting off some employers.

The calculations don't take this into accounts, but another option could be for the employee to pay back 82% or 75% (depending on bike value) over the first 12 months. And then the balance would be the HMRC recommended sale amount. Would this work?

Would be a simpler way of doing it, but never seen the calculations show it this way?