Bike Through Work Scheme

[Moqi]

cycle to work

its due to the application of guidance issued by hmrc recently.

As previously noted it's basically a loan scheme with an option to buy at the end of loan period.

Previously employers were placing unrealistic values on the bike at the end of the loan period - ie 5% or less. You and I know that at the end of a year a bike costing £1000 new is not worth £50. HMRC decided to tighten up on this so suggest a value of 25% at the end of the year.

See
http://www.hmrc.gov.uk/manuals/eimanual/EIM21667.htm
and http://www.hmrc.gov.uk/manuals/eimanual/EIM21667a.htm

You have the option of handing back the bike and paying nothing, paying the money or seeing if your employer will accept you not paying and taxing you as a benefit in kind. The other alternative is to see if you can get the loan extended- the values drop each year.

I'm afraid that the heavy selling of the scheme with the emphasis on getting a bike for 50% of price led to lots of abuse of the scheme. Eventually something that seemed too good to be true ended up just that.

 

[cchris2lou]

They can't charge you to take it back as it is not yours , it is theirs .

 

[cyfa2809]

i wonder, what do they do with it if they have to take it on?
probably sell it on, if nobody in the company wants it though, it could be some task and a waste of time to shift it?

 

[stewlewis]

My company have just started this, I was thinking of joining but without knowing the final buy out cost I don't think I'll bother.
A £1000 is probably discounted to the same degree at the end of the year anyway, I may as well just save pennies monthly and buy one.