I am currently looking at the possibility of starting up a cycle to work scheme. Whilst not the same, a number of years ago we were involved in the Home Computing Initiative and were left quite burnt by the experience. Primarily this was due to employees leaving the business before the end of the scheme, not having completed all the payments and not having enough in their final pay to cover the balance (we have a mixture of weekly and monthly paid employees).
Has anybody had experience of the Cycle to Work Scheme and come across any difficulties in this area?
I have run a number of schemes for various employers and never really had an issue.
Make sure you have a watertight agreement (the provider will do this for you) that covers off leavers repayments and you should be fine. The maximum value is low £1000 so recovery shouldnt be an issue.
As C2W is covered by the consumer credit act you can always threaten, or take if needs be recovery action in the courts.
Thanks for that. I think our downfall last time was not chasing up those who still owed a balance or at least not taking it as far as legal action.
Though the bike amounts aren't that considerable, a large portion of our weekly leavers (probably taking home £250 per week) leave owing over taken holidays and a balance on their employee accounts (used for purchasing our goods), once those are accounted for, there regularly is very little left.
I wouldn't want to restrict the scheme to monthly paid employees as the weekly paid often get the raw end of the deal, but it's this that's scaring the management.
I understand your / their concerns !
In fact you cannot restrict the scheme to monthly paid employees however as the tax exemption is only allowed if the scheme is available to all employees. This is why good providers have put in steps around minimum wage earners and those aged under 18.
As a last resort you can insure your scheme but in practice you will pay more in insurance than you would ever realistically lose from non payment .....
I'd forgotten about the salary sacrifice rules around offering to all employees. Thanks for the advise, it's given me some food for thought.
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