cycle scheme "market value"?

[Will Cove]

Tony Raven <[email protected]> wrote in news:50qdaaF1gtnbsU1
@mid.individual.net:

> And how many cyclists have found HMRC following them round on their
> bikes with a stopwatch to check their usage?

I wouldn't put it past them if they received a tip-off - not that they'd
need a stopwatch in the case of someone who lived a five minute bike ride
from work and used the bike most weekends for audax etc. But as I wrote
earlier, I suspect you'd need to be obviously "trying it on" before they'd
take any action, so the majority of people who use their bike for commuting
should be OK (AFAICT!)

 

[Ian Smith]

On 12 Jan 2007 21:17:55 GMT, Will Cove <[email protected]> wrote:
> Al C-F <[email protected]> wrote in
> news:[email protected]:
>
> > An audax ride is one journey. A long ride is also one journey. 5
> > minutes to the station is also one journey. And five minutes back again
> > is another.
> >
> > In my world, at least.
>
> Unfortunately, the DfT mention the time spent using the bike rather than
> the number of journeys. So if you did ten, half-hour commuting trips and
> one six-hour audax ride in a week the majority of the use would be for non-
> qualifying purposes.

But the DfT have nothing to do with it really. It's not a DfT scheme.
It's not controlled by the DfT in any way, and the DfT have no say in
assessing compliance with the terms.

HMRC (who have rather more to do with it) say that as long as there is
"substantial" use for cycling to work, it doesn't matter, and the act
(which is the defining issue) just says "main use", without
quantifying it.

> However, AIUI there are enough clues to suggest that HMRC aren't going to
> look too carefully provided you aren't obviously "trying it on".

There's more than clues. You can read the guidance to HMRC's
inspectors for yourself.

regards, Ian SMith
--
|\ /| no .sig
|o o|
|/ \|

 

[Will Cove]

Ian Smith <[email protected]> wrote in
news:[email protected]:

> HMRC (who have rather more to do with it) say that as long as there is
> "substantial" use for cycling to work, it doesn't matter, and the act
> (which is the defining issue) just says "main use", without
> quantifying it.

Don't forget that if a tax inspector deems that the main use has been other
than for qualifying journeys then by law the main use was not for
qualifying journeys unless you can persuade the Commissioners, or higher,
of the contrary. Tax law is very much "guilty unless proven innocent". So
although the Act just says "main use" the opinion of the Revenue will most
likely prevail provided that their interpretation is remotely reasonable.
(A bit like many IR35 and S660 cases).

I wouldn't want to try to persuade the Commissioners that the main use of a
company bike was for qualifying journeys when both the mileages and useage
times suggested it wasn't - even if qualifying journeys greatly outnumbered
personal use trips. Even though I'd love my company to buy me a new bike
there's no way that I could use it mainly for business and so I'm just
going to have to pay for my next bike from fully taxed income

Now the guidance to HMRC's inspectors is just guidance and the Revenue have
a recent history of changing their interpretation and applying the changes
retrospectively to the detriment of the taxpayer (Arctic System and S660 -
the "married couple's business tax" - being one of the most prominent
recent cases)

 

[Ian Smith]

On 12 Jan 2007 23:50:50 GMT, Will Cove <[email protected]> wrote:
> Ian Smith <[email protected]> wrote in
> news:[email protected]:
>
> > HMRC (who have rather more to do with it) say that as long as there is
> > "substantial" use for cycling to work, it doesn't matter, and the act
> > (which is the defining issue) just says "main use", without
> > quantifying it.
>
> Don't forget that if a tax inspector deems that the main use has been other
> than for qualifying journeys then by law the main use was not for
> qualifying journeys unless you can persuade the Commissioners, or higher,
> of the contrary. Tax law is very much "guilty unless proven innocent". So
> although the Act just says "main use" the opinion of the Revenue will most
> likely prevail provided that their interpretation is remotely reasonable.
> (A bit like many IR35 and S660 cases).

No, the opinion of the courts prevails. Which is what I said - you
only ever find out for certain when the verdict is delivered.

It's no more 'guilty until proven innocent' than most of teh rest of
law. If 'they' think you're guilty and you think you're innocent, you
might get arrested and you all go to court.

regards, Ian SMith
--
|\ /| no .sig
|o o|
|/ \|

 

[Will Cove]

Ian Smith <[email protected]> wrote in
news:[email protected]:

> No, the opinion of the courts prevails. Which is what I said - you
> only ever find out for certain when the verdict is delivered.

Pragmatically, and for most people, that's absolute poppycock!

> It's no more 'guilty until proven innocent' than most of teh rest of
> law. If 'they' think you're guilty and you think you're innocent, you
> might get arrested and you all go to court.

Under tax law if the inspector of taxes says you owe something, you owe
it and have to pay it. Should you fail to pay up, interest and penalties
accrue. You won't be arrested and go to court, the Revenue will commence
civil proceedings against you to recover your tax debt. At the hearing
there will be no argument of whether you owe the tax, only whether you
will be made bankrupt and/or how the money is to be extracted from you.

There is an appeal process via the Commissioners (who are not a court),
the court of appeal, and eventually up to the House of Lords - but
"judgement" of your liability is initially made against you without
benefit of trial and an initial appeal is heard by the Revenue - who
would also be your accusers. IOW, exactly as I wrote, you are "guilty
until proven innocent" and if you can't afford to lodge an appeal (very
expensive, so not many can) you're stuffed.

In the Arctic Systems case, the taxpayers have won at the Court of Appeal
but the Revenue is taking the matter to the House of Lords. The cost to
the taxpayer of defending against the Revenue in this matter will run
into hundreds of thousands of pounds - and the Revenue will seek costs if
they win in the HOL. Thankfully for the Joneses, the PCG has agreed to
continue to fund their defence - most taxpayers are not so fortunate.

Now if you're foolhardy enough to think that anyone of normal means can
get a fair crack of the whip under the present tax regime, good luck to
you (you might need it)!

 

[PUSHERBOT]

I'm making the assumption that you want an example figure rather than
some newsgroup busybody quoting you tax laws.

Here we go:

I work for a very large PLC and last year the "market value" was £20
for all bikes.
This year I think it is £20 for bikes below £500 and £30 for bikes
above £500. I was asking around about this last year and the maximum
I have every heard for this figure is £30.

As someone else has said if your employee decides to "permanently
loan" you the bike at the end of the hire period you get it for
nothing. I presume you would have to give it back (legally if not
practically) if you leave the company or pay the tax on it - again
this would be "market value".

 

[Pyromancer]

Upon the miasma of midnight, a darkling spirit identified as Will Cove
<[email protected]> gently breathed:

>However, AIUI there are enough clues to suggest that HMRC aren't going to
>look too carefully provided you aren't obviously "trying it on". So the
>example I gave earlier in this post would probably not give rise to the
>taxman's wrath. That said, I am not an accountant and this isn't advice.

The way I read between the lines of the scheme and HMRC guidelines (as a
layman) is:

As long as you do use the bike for going to work a fair bit of the time,
they're really not that fussed what you do with it the rest of the time.

Home to work for me is a mile. I cycled it almost every day from
getting my cyclescheme Gazelle last spring until the week before Xmas,
and only stopped then because I was worried about drunk drivers on the
roads while coming home after work - I figured I'd be safer in my van.

I've only cycled a few times this year so far, mostly because of the
weather (lots of very strong wind, plus the sort of rain you usually
only get on the west coast), and also because I'm using lunch-breaks to
sort out the duff door mechanism on my van before trading it in for a
newer one in a few weeks time. Plus there is currently some spare
parking at work where I can leave the van.

Before the month is up I should be back to cycling every day again
though.

Meanwhile I've no qualms at all about going out for pleasure rides on
the bike, as I am using it on the whole for the intended purpose.

If I never rode to work, or only did so a few token times, that would be
trying it on. But I do normally ride, 5 days a week, plus if I need to
pop to town at lunch time, I use it for that too - I'm actually more
likely to do so when I've the bike available than without, as driving in
would be a hassle, while cycling is easy and quick. It's walkable, but
that kills most of the available time.

--
- DJ Pyromancer, The Sunday Goth Social, Leeds. <http://www.sheepish.net>

Broadband, Dialup, Domains = <http://www.wytches.net> = The UK's Pagan ISP!
<http://www.inkubus-sukkubus.co.uk> <http://www.revival.stormshadow.com>

 

[PUSHERBOT]

On Sun, 14 Jan 2007 13:54:28 +0000, Pyromancer
<[email protected]> wrote:

>Upon the miasma of midnight, a darkling spirit identified as Will Cove
><[email protected]> gently breathed:
>
>>However, AIUI there are enough clues to suggest that HMRC aren't going to
>>look too carefully provided you aren't obviously "trying it on". So the
>>example I gave earlier in this post would probably not give rise to the
>>taxman's wrath. That said, I am not an accountant and this isn't advice.
>
>The way I read between the lines of the scheme and HMRC guidelines (as a
>layman) is:
>
>As long as you do use the bike for going to work a fair bit of the time,
>they're really not that fussed what you do with it the rest of the time.
>
>Home to work for me is a mile. I cycled it almost every day from
>getting my cyclescheme Gazelle last spring until the week before Xmas,
>and only stopped then because I was worried about drunk drivers on the
>roads while coming home after work - I figured I'd be safer in my van.
>
>I've only cycled a few times this year so far, mostly because of the
>weather (lots of very strong wind, plus the sort of rain you usually
>only get on the west coast), and also because I'm using lunch-breaks to
>sort out the duff door mechanism on my van before trading it in for a
>newer one in a few weeks time. Plus there is currently some spare
>parking at work where I can leave the van.
>
>Before the month is up I should be back to cycling every day again
>though.
>
>Meanwhile I've no qualms at all about going out for pleasure rides on
>the bike, as I am using it on the whole for the intended purpose.
>
>If I never rode to work, or only did so a few token times, that would be
>trying it on. But I do normally ride, 5 days a week, plus if I need to
>pop to town at lunch time, I use it for that too - I'm actually more
>likely to do so when I've the bike available than without, as driving in
>would be a hassle, while cycling is easy and quick. It's walkable, but
>that kills most of the available time.


The taxman doesn't really care. The Government is seen to be doing
something environmentally friendly.