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Post Info TOPIC: Salary Sacrifice - Cycle Scheme
Bucks Bodger


Senior Member

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Salary Sacrifice - Cycle Scheme
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I wonder if someone can help me understand how to deal with my first cycle scheme salary sacrifice arrangement ?

 

I am looking at the hire agreement and it says "12 payments of £65.84 (minus a contribution of £9.08 made on your behalf by your employer).

 

So I introduce the bike as a fixed asset when it is purchased (since it belongs to the company).

 

I then enter the deductions from the salary (£65.84) as a credit to income for hire of the bike. These deductions

are made pre-tax to make sure the employee receives the tax benefit.

I think the £9.08 is the saving in Employers National Insurance contributions, so is it just a case that this is passed on to the employee

by debiting Employers NI and crediting the hire account each month ?

 

If this is right then 12 months hire charge of £65.84 + £9.08 = £899.04 which would be correct

as the cost of the bike is £899.00.

 

That works for me, but I'd appreciate someone else's opinion as to whether I have got it right.


Thanks

 

Eunice



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Eunice Cubbage
abacus12345


Guru

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I always assumed that it is more beneficial for the employee to not buy the bike. If the company buys the bike, the employee then uses the bike (to and from work) it is a free benefit.

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Johnny  - Owner of an overly-active keyboard. 

A man who can read, yet doesn't, is in no way wiser than a man who can't.

 
Cheshire


Master Book-keeper

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Hi Eunice
I thought the company was supposed to get involved with the company that the bike was from - probably worth having a look at the cycle scheme website as they offer tons of advice

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Trojan1970


Senior Member

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Hi Eunice - are you all sorted with this now? One of my client's runs the cycle scheme, but I am not on their site until Wednesday and I can't recall the process I use off the top of my head. I can post again on Wednesday if that suits? I use sage for the accounts and payroll.

Let me know if you still need any help?

Regards

Victoria

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Victoria

"It's not what you earn, it's what you spend"
Bucks Bodger


Senior Member

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That would be great, Victoria,. thank you !


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Eunice Cubbage
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