Anyone used cycle to work scheme?

    Hi, anyone used it?
    What did you do at the end of the 12 months?
    And which bike did you go for?


    After 12 months the bike is no longer on loan its yours
    I bought a Boardmans Hybrid team bike



    After 12 months the bike is no longer on loan its yoursI bought a … After 12 months the bike is no longer on loan its yoursI bought a Boardmans Hybrid team bike

    No its not
    "How does payment work?
    Your hire payments are deducted from your gross monthly salary. At the end of the hire period employees may be given the opportunity to buy the bike for the market value, however this cannot be an automatic entitlement. Many employers opt for Cyclescheme to take ownership of the bikes at the end of the hire term, in which case any offer sale to the employee will come directly from Cyclescheme"…ike

    Be careful - officially after 12 months, you're meant to "buy the bike" for its fair market value. The Inland Revenue has recently published their expected residual values and if you pay less than this, as a final payment, you could be liable to "benefit in kind" tax - which would wipe out the saving. Their minimum residual values after 12 months are 18% for bikes under £500 and 25% for those over £500. If your scheme lets you buy the bike for less at the end of 12 months you could end up with a tax liability.

    Some schemes are now allowing you to "rent" the bike for a further three years, so that you only pay a much lesser fee after 4 years to buy the bike and that will keep the taxman happy as their forecast for residual value after 4 years is just 3% of the purchase price for a bike under £500.

    But some schemes don't offer that option, (and each employer chooses the scheme that they become a member of - you can't choose it) - so you may only have the choice of a scheme that doesn't comply with the latest tax rate guidelines. Beware.

    Also - my wife is in the NHS and a colleague who bought a bike through their scheme lost his car parking privileges. I know the scheme is to encourage you to cycle to work but nothing in the scheme makes it compulsory. So beware of other pitfalls to taking the scheme too.

    In the end, we just bought a bike for cash and got a discount.... Not worth the risk of being stung by the taxman later on.

    There will be many who will say they've had a great result from the scheme and have had no issue and haven't had any large last payment to make to buy the bike after 12 months - but the Revenue has only recently made its clarification, so that has changed the risk in my view.…ate

    Edited by: "alfiejts" 22nd Jul 2014

    Original Poster

    Thanks guys.

    I had the choice of this or interest free loan.

    The bike scheme is a bit of a waste now the bike isn't yours at the end of it or you pay a paltry amount for it HMRC have ruined it.


    I got a bike at the time Cyclescheme first came out... bike was £740, accessories were £200 and the shops charge was £50 for buying a bike through Cycle Scheme. I paid £83 a month for 12 months out of my wages before tax and insurance. Then they wrote to me...I can own the bike for a further £230 or carry on the loan for a 1 off payment of £70 but the bike is still theirs for a further 3 years. Anyway.... don't do it... It costs you more than the bikes worth. only do it if you can't get credit for a bike

    Original Poster

    I was hoping to do it to save money lol
    Will probably leave it then
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