BP and BNP Paribas are two of the employers that have reintroduced bikes-for-work schemes since HM Revenue and Customs (HMRC) issued clarification on valuing bicycles at the end of the loan period.
Richard Grigsby, director of Cyclescheme, said: “HMRC has provided some clear information but some employers have had a bit of a knee-jerk reaction to it, thinking it means the end of the scheme, which is certainly not the case.”
The provider has launched a service, designed after talks with HMRC and independent tax experts, to ease employers’ administrative burden for obtaining the fair market value of bicycles at the end of the loan period by transferring responsibility to Cyclescheme.
Under the scheme, employees must lease a bicycle for a four-year period and pay a deposit equivalent to the fourth-year fee of either 3% or 7%. If the employee does not want the bike at the end of the loan period, they can return it to Cyclescheme and get their deposit back. If they want the bike, their deposit is not returned.
Grigsby added: “At the end of the year, the employer transfers ownership of the bike to us and we hire it to them into the fourth year.”
Halfords is working with HMRC to produce a similar service.
Meanwhile, Evans Cycles refers organisations to the table of fair market values provided by HMRC, which sets out what a cycle is worth each year after its first use. In this case, however, ownership of the cycle remains with the employer throughout the scheme. The provider has also seen employers reintroducing bikes-for-work schemes since HMRC’s clarification. An Evans Cycles spokesman said: “We have a continued take-up of companies joining the scheme.”
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