Cycle to Work Scheme
Just been informed that my employer (HP) is taking part in the Cycle to Work scheme.
This is great new for me as I was thinking of buying a new summer bike anyway :)
For those who don't know what this is it is basically a hire purchase agreement between the employer and employee. The employer gives a certificate to the employer for a max of £1000 to spend on bikes and kit. Not sure but it looks like if I bought a bike for £1000 then over the 12 months contract period I would only need to pay back £623 due to tax allowances etc. :thumb:
More info can be found http://www.cyclescheme.co.uk/
I am interested to see if anyone has taking this on and if there are any pitfalls or advice anyone may have.
Some of the issues that occur to me are
1) Under the scheme the cycle is supposed to be used for traveling to and from work;
This is fine for the the first few weeks during the summer, but what about snowy December when you take the car/bus/train and ride for pleasure during the weekends.
As HP are a big employer they may be more likely to audited by HMRC than other smaller firms.
2) If you leave your employer you will probably find that you have to pay off the whole lease on leaving.
3) In the past, at the end of the lease period the cycle tended to be valued at a very low amount, almost free. HMRC has cracked down on this a bit. After a year 25% of the new price of the bike is the minimum they will accept, personal safety equipment much less.
but as you suggest that you would be paying about £600 then you appear to have considered this.
4) However under the arrangement, the employer is not obliged to sell the bike to you at the end of the lease period.
So in theory at least, you could be making the lease payments and at the end the employer could put the bike on e-bay and get a lot more for it. Again as HP are a big company, they may be more likely to do what is safe in respect of HMRC guidelines.
I've just signed up to this as well. Make sure your employer is claiming back the VAT on the kit, mine doesn't and that makes it almost a straight 1 year HP (I did this anyway as I didn't have the cash to lump out). And you'll get a far better deal cash in hand. (my partner got an immediate 25% off without even haggling)
Although it says you have to commute 50% of the time the terms and conditions of the employer say that they are not required to check. How easy it is for them to check will be down to the employer, but as every employer gets tax breaks for being on the scheme they are unlikely to care!
On the whole it's a good scheme, but how good it is will vary on employer.
Have fun and enjoy your new wheels!
i've done the scheme four times in a row, i recamend it to anyone who commutes to work by bike
I know wrong area but why don't we have this in the states??:-(
As a teacher, I was a bit miffed to discover that my ELB don't take part... and seemingly never will!
Originally Posted by eightlab
Education and Library Board... The peoples what pay my wages!