Cycle To Work scheme (again)

Simon L of urlhttp://groups.google.com/url said:

It looks like I've persuaded (nag nag) our management to sign up to
Cycle To Work. Hurray.

A few question people have put to me -

- Do you get VAT off the cost of the bike too?

Depends on the company you work for. If they can claim back the VAT, they
do, so you only pay the exVAT amount. If they can't (not registered eg
insurers, public bodies) then you don't get the VAT off.

Quoted message said:

- What happens if the employee leaves the company? The company
probably doesn't want the bike.

Covered in the loan agreement - employee has to pay off the rest of the loan
and buy the bike.

Quoted message said:

- Is it time consuming to manage?

Took some effort to set up, but once HR got the paperwork straight doing it
again for more people was dead easy.
--
Steph Peters
Chorlton Wanderers Cycling Group
Monthly slow and easy rides from South Manchester
http://www.sandbenders.demon.co.uk/cycling/chwan.htm

Simon L said:

It looks like I've persuaded (nag nag) our management to sign up to
Cycle To Work. Hurray.

A few question people have put to me -

- Do you get VAT off the cost of the bike too?

There's nothing special about the VAT situation - it's purely down to
whether the employer (which purchases and owns the bike) pays VAT. If
it's one of the majority of employers that doesn't, VAT won't be
payable.

Quoted message said:

- What happens if the employee leaves the company? The company
probably doesn't want the bike.

Needs to be addressed in the salary sacrifice agreement. The employee
might be able to sacrifice the entire outstanding sum out of the final
pay. That might cause headaches if close to minimum wage (you can't
do a salary sacrifice that takes you below minimum wage) so you might
need to do it by repaying the company, which would lose much of the
tax benefit, because you'd be taxed on the money you earned to pay off
the outstanding.

Quoted message said:

- Is it time consuming to manage?

No. If you already have salary sacrifice arrangements in place for
things like childcare vouchers, it's trivial. The company doesn't
need to maintain any records about bike usage. The bike will need
appropriate treatment in the company accounts, but that's no more
complex than any other plant equipment or whatever the company owns.

regards, Ian SMith
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