Cyclescheme Final Payment

[CatherineJ]

Have had the email today regarding the final payment on my rockhopper.

To say i'm shocked is an understatement.

The final payment they are asking for is more than the tax saving made over the last 12 months.

Does that sound right, or am I just being a tight ass northerner.

[anonymous-user]

What about 25%? Can you extend your hire period to 4 years to get it down to virtually nothing, with very little or no extra cost?

New HRMC guidance in August came out giving a 20-25% final payment as the only way out of the scheme after 12mths. Just give it back, unless you really want the bike and can extend the term.

Lots of posts about it a couple of months back.

Edited by anonymous-user on Monday 8th November 11:29

[CatherineJ]

Well according to my maths, they are looking for 27.6% of the cost of the bike. If I take into account the accessories then they are asking for 24.8%. However I can't see that the accessories have any value.

[anonymous-user]

Yep all in despite the accessory value, can you extend the hire period? Or just give the bike back?

[CatherineJ]

Well there appears to be another option of around £45, will need to study that as it refers to extending the agreement.

[anonymous-user]

If you want the bike, they take £45 now extend the hire period and after 3.5 years the bike is yours, if you don't they take the bike back for disposal fee probably £45.

You may be able to start a new scheme even though you have the other one on hire still. Or hand it back and get a new one again.

Edited by anonymous-user on Monday 8th November 11:46

[CatherineJ]

OneDs said:

If you want the bike, they take £45 now extend the hire period and after 3.5 years the bike is yours, if you don't they take the bike back for disposal fee probably £45.

You may be able to start a new scheme even though you have the other one on hire still. Or hand it back and get a new one again.

Edited by OneDs on Monday 8th November 11:46

Thanks for all your help. I might have more questions tonight for you.

[Andy OH]

HMRC in their wisdom have changed the Cyclescheme final fair market value structure. I am two payments away from the end of our scheme and have been told I will either have to pay roughly 25% of the value of the original value of the bike to take ownership immediately or defer taking ownership for a further 31 months after the end of our current scheme in return for a 7% payment of the original bike value (£1,000). I am not handing the bike back as I have paid £590 for it over the hire period and it is now my winter training bike.

I will pay the £70 to defer ownership for 31 months, but I hope HMRC will not change the goal posts again.

I will not use Cyclescheme again as you can buy a bike in the sales at almost the same kind of saving.

[CatherineJ]

I've read their email in detal. They are offering £46.55 to extend for 30 months.

Surely after a total of 42 months there can't be any value to it can there?

[anonymous-user]

CatherineJ said:

I've read their email in detal. They are offering £46.55 to extend for 30 months.

Surely after a total of 42 months there can't be any value to it can there?

http://www.hmrc.gov.uk/manuals/eimanual/eim21667a.htm

3% if under £500 & 7% over after 4 years, they take 3.5 years as rounded up to 4. Is £46.55 equivalent to 7%?

Edited by anonymous-user on Monday 8th November 21:14

[anonymous-user]

I have good news regarding CycleScheme from my employer. I was a bit worried after recent changes but looks OK now...

Still pay for the bike, - tax & VAT for 12 months, interest free, as before.

Then pay a deposit between 3% & 7% for extended use agreement.

Ride the bike for 36 months. If you leave jobs during this time it does not matter, as you are just dealing directly with CycleScheme

After that 36 months Cyclescheme keep the deposit & sign the bike over to me. Or you can give them the bike & get the deposit back.

You can still get another one after the initial 12 months is up as before.

So about a 35% saving on a £1000 bike, interest free over a year, which seems a good deal. Especially as you can buy sale bikes under the scheme from most online retailers.

Edited by anonymous-user on Monday 10th January 10:02

[Magic919]

Jimboka said:

You can still get another one after the initial 12 months is up as before.

The documentation I got says this is not possible if I opt to extend the agreement beyond the 12 months.

[anonymous-user]

Magic919 said:

Jimboka said:

You can still get another one after the initial 12 months is up as before.

The documentation I got says this is not possible if I opt to extend the agreement beyond the 12 months.

Mine must be different! :-

There’s no downside to transferring ownership after a longer period.
A small, refundable deposit secures continued use of the bike, regardless of employment status.
You can get another bike as soon as your initial hire period is up (usually 12 months).
The new market value percentage charge includes VAT – the misconception is that you pay this on top.
Under the old rules you would pay 5% plus VAT so an extended use term offers a good deal and the difference is a maximum of £10.
Savings in line with previous expectations.

[Magic919]

I think it's because it's a choice made the Employer, rather than a scheme restriction.

[Andy OH]

Magic919 said:

Jimboka said:

You can still get another one after the initial 12 months is up as before.

The documentation I got says this is not possible if I opt to extend the agreement beyond the 12 months.

If your scheme is with 'Cyclescheme' then this link will give you all you need to know.

http://www.cyclescheme.co.uk/employer,intro.htm

[Magic919]

I have read those, but the fact remains that my employer takes the view that the 31 months extension (the period they transfer ownership from them to Cyclescheme) is a further hire period and that we don't qualify until it's over.

It's interesting as that's at odds with what Cyclescheme are saying. They claim to have run this all past Legal.

Until they (my employer) lift their £1000 limit I'm not really bothered about getting another bike on the scheme.

[CatherineJ]

Ended up paying the extension fee on my bike. Won't have another on cyclescheme.