On 28 Nov 2006 13:33:43 -0800, raisethe <
[email protected]> wrote:
>
> My employer tried to set up the ride to work scheme but abandoned it
> after trying for a year.
Whereas my employer decided to set up the scheme and just did it - a
few weeks thinking, then one week from executive board deciding to do
it to first bike ordered.
> The problems related to the need to create a finance agreement
> between employer and employee. I cannot understand why the
> government has created this scheme but then burdened it with this
> ludicrous requirement which then makes it fall foul of some of its
> other legislation (ie beneficial staff loans).
It doesn't. I'd suspect your employer of telling porkies. The
'scheme' is nothing but an exemption from benefit-in-kind taxation.
Anything else is your employer's addition. Most employers want a
salary sacrifice to recover the cost to the company of the bike, but
unless you're on (or barely above) the minimum wage, salary sacrifice
is not particularly difficult to arrange.
> they have set up the scheme to appear 'green' but added this finance
> requirement to restrict the uptake to as few employers as possible.
The government does not impose any finance requirement, beside
limiting the value to 1000 pounds (unless your employer has an
appropriate consumer credit act licence)
As previously discussed - the scheme is potentially very simple
and potentially very good value to the employee, but lots of employers
seem intent on adding extra conditions that make it complex,
inflexible and poor value.
For reference, the scheme at the company where I work is that you can
have any bike (even last year's model already discounted), from any
supplier who will accept either a company cheque or company credit
card (we're yet to find a supplier that won't), up to the 1000 pounds
consumer credit act limit. You must make a salary sacrifice, but that
reflects the price paid by the company, ie you don't pay for the
income tax, NI, or VAT. The company doesn't reduce its contribution
to your pension fund during the period of the sacrifice, it pays as
much as if you didn't take a sacrifice. The company doesn't add any
administration charges, but it pockets the NI employers contribution
saving. You can buy the bike when you like. Having completed the
salary sacrifice, you can do the negotiation to buy the bike, but the
company is happy if you just keep riding it without buying it. The
only teensy ****le is that the company says you must buy a helmet at
the same time (but after intensive lobbying, no longer says you need
to wear it having bought it).
regards, Ian SMith
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