Cycle to work schemes - end of hire terms etc

[Dave J]

My company is considering setting up / joining a scheme for employees.

Im a little confused as to the true benefits to employees. I have read tales of "effectively buying the bike twice" at the end of the "hire" term to enable actual ownership ?.

Can you please advise on the true benefits and how did it work out for you as an employee / purchaser and as an employer - if you have been involved in that side of things .

thanks

[gp1699]

My purchase on bike to work was approx 9k. Worked out costing me around £5700.

Final payment was 7%, I looked at it as 13 monthly payments.

[PistonTim]

My final payment is a couple of quid to 'purchase' the bike, only an £800 Giant MTB but so far as I can see there are no downsides to the scheme at all, great way of getting back into cycling in my case!

[LastPoster]

When I did this, the bike was given a nominal value (I think it was 18% for sub £500 new, 25% for above £500). The company then gave me the bike but I paid BIK on the gift. So 40% of 15% of £500 for example. It was 10 years ago, the rules may have changed.

[Dave J]

I see that green commute have no limit on purchase cost - is this the best scheme for employees and employers ?

https://www.greencommuteinitiative.uk/

[some bloke]

I got an email recently asking if I wanted to keep my bike:

Congratulations - you can now take ownership of your Cyclescheme package.
Your Own It Later agreement with Cyclescheme has come to an end. You can now take ownership of your Cyclescheme package at no extra cost.
What happens next?
It's time to take ownership! Simply log in to your My Cyclescheme account and follow the on-screen instructions. You can then download a Transfer of Ownership Certificate that confirms that package is now yours.
MyCyclescheme account
If you choose to take ownership of the package, Cyclescheme will retain the Own It Later Fee of £69.86 you paid on the Mar 2, 2020. This is equal to the HMRC determined current market value of the commuting gear and means you will take ownership at no extra cost.
If you have any questions, please contact our friendly customer service team on 0344 879 5101 or by email at [e-mail].

So I didn't have to pay at the end, but I don't remember the details when I signed up.

I got an £1100 bike for about £750, or so; can't remember exactly. You can get lights, clothing, locks etc, and I think you can get electric bikes too.

Definitely worth doing if you'd like a new bike for a decent price.

[PistonTim]

some bloke said:

I got an email recently asking if I wanted to keep my bike:

Congratulations - you can now take ownership of your Cyclescheme package.
Your Own It Later agreement with Cyclescheme has come to an end. You can now take ownership of your Cyclescheme package at no extra cost.
What happens next?
It's time to take ownership! Simply log in to your My Cyclescheme account and follow the on-screen instructions. You can then download a Transfer of Ownership Certificate that confirms that package is now yours.
MyCyclescheme account
If you choose to take ownership of the package, Cyclescheme will retain the Own It Later Fee of £69.86 you paid on the Mar 2, 2020. This is equal to the HMRC determined current market value of the commuting gear and means you will take ownership at no extra cost.
If you have any questions, please contact our friendly customer service team on 0344 879 5101 or by email at [e-mail].

So I didn't have to pay at the end, but I don't remember the details when I signed up.

I got an £1100 bike for about £750, or so; can't remember exactly. You can get lights, clothing, locks etc, and I think you can get electric bikes too.

Definitely worth doing if you'd like a new bike for a decent price.

Thats who we use too, I think the limit is £5k -i t was very painless end to end and I used a local shop to me (not halfords) and I would recommend the whole package.

[Dave J]

Some of the stair dominating powerfully built Directors are seeking bikes of upto £7K so the cost limit is a factor for us to consider.

[PistonTim]

Dave J said:

Some of the stair dominating powerfully built Directors are seeking bikes of upto £7K so the cost limit is a factor for us to consider.

Cycletowork do offer a limitless package

[z4RRSchris]

we use the green cycle one, no limit but we set a 10k limit internally.

no final payment

[Sway]

Essentially, through the duration of the scheme the bike is merely on 'lease' for want of a better term.

Then, at the end of the scheme, you 'buy' the bike based on it's HMRC determined value.

If doing that at the end of one year it's quite a lot. Which is why all the schemes offer a 'buy it later' approach where after (I think) 5 years you've reached rhe lowest value HMRC determine - but you've already paid that 'fee' up front within the scheme payments.

So, for my purchase:

Select the 'buy it later' option. Value of that final payment is rolled into the total scheme price.

Pay over 12 months pre-tax and NI.

'Some' years later the bike is 'officially' mine. No payment at that point.

In reality, I've never heard of anyone being asked to demonstrate they still have the bike during any part of that process. So if you wanted to sell the bike after a couple of years (because you've got a shiny new toy) then whilst not 'legal', no one is going to care.

[PistonTim]

Yes you dont officially own it until the final purchase settlement of whatever low amount it is, so in theory you cant sell or trade before then.

It seems to be much cheaper to make the final payment 3-5 years down the line rather than at the end of the 12 months.

[TheDrownedApe]

my company doesn't seem to care. repayment period ended, nothing from the employer. Contacted voucher supplier, heard nothing back.

I know i'm not the legal owner but no one, except me, seems to care.

[JagYouAre]

Similar story, I bought a bike on one of the schemes some years ago for I think £1k (the limit at the time). Paid for it tax free out of salary over something like 12 months and the contract said after something like three years I would pay a nominal fee of £70 or so to 'formally transfer ownership' (I think this is some sort of requirement for the tax perk).

In reality I left the company after a couple of years and nobody ever came knocking for that fee (I had finished the monthly payments) and I subsequently sold the steed. This was about 7 or 8 years ago.

[Sway]

No one cares. The fee was more than likely included in the initial scheme, so the scheme provider has had the cash needed to sort it out.

So, crack on, no one is bothered.

Same as the 'primary use' (or however it's termed) of the bike for commuting. I'd bet decent money that there isn't a single person in the country that has been asked to justify/prove use for work purposes in any way...

[lauda]

TheDrownedApe said:

my company doesn't seem to care. repayment period ended, nothing from the employer. Contacted voucher supplier, heard nothing back.

I know i'm not the legal owner but no one, except me, seems to care.

Same here. I’ve had three bikes through C2W over the last decade and never paid a final fee on any of them. I don’t even work for the employer I bought them through anymore.

[Dave J]

Cheers all, I will have a chat with the FD and get it going