Anonymous
Share this content

Can we spread the cost of employee purchases

Didn't find your answer?

I work for a bike company and was wondering whether our employees could purchase a bike from us at reduced levels but pay over the period of a year? Or does this constitute a loan?

Replies (9)

Please login or register to join the discussion.

avatar
By Wanderer
26th Mar 2021 16:48

Quote:

I work for a bike company and was wondering whether our employees could purchase a bike from us at reduced levels but pay over the period of a year? Or does this constitute a loan?

Q1 Yes.
Q2 Yes.
Q3 Yes.
Thanks (0)
avatar
By paul.benny
26th Mar 2021 17:06

There are lots of pitfalls in employee purchases, especially if they are on credit, and even more so if the item value is >£1,000.

Thanks (0)
boxfile
By spilly
28th Mar 2021 13:10

Check out the Cycle to Work scheme. The company has to register as a scheme supplier though and would then also be able to provide bikes to other companies for their employees.
The Sustrans website has some helpful information- sorry, can’t do a link as I’m on a very grotty phone.

Thanks (1)
Routemaster image
By tom123
28th Mar 2021 13:41

I have done this many times over the years, selling off cars / vans etc.

You need a written agreement, and, if I am being honest, accepting the possibility of default.

Thanks (0)
avatar
By mcfinance
01st Apr 2021 10:46

I'd recommend the cycle to work scheme, it will enable you to spread the cost and provide tax savings. I believe the limits have recently been adjusted too, I'm not operating it at present, but I have used Cycle Scheme previously with success.

Here are some helpful links:

https://help.cyclescheme.co.uk/

https://www.gov.uk/government/publications/cycle-to-work-scheme-implemen...

Thanks (0)
avatar
By Mr_awol
01st Apr 2021 11:01

As others have stated, the cycle to work scheme MAY be appropriate (although it may not. There is, of course, a clue in the name of the scheme which tends to be ignored by clients and accountants alike).

Other than that, what's your objection to is being an employee loan (again may depend on info not in the OP but im interested in your reasons first).

Thanks (0)
Replying to Mr_awol:
Routemaster image
By tom123
01st Apr 2021 12:46

Perhaps the OP is worried about needing some kind of 'licence' etc?

Must admit, has never been a worry to me.

Thanks (0)
avatar
By [email protected]
01st Apr 2021 12:58

Others have mentioned the virtues of the "Cycle to work scheme"

Re loans to employees - as long as they are below the threshold it is quite acceptable to make loans to employees.
Just make sure that you sense check the ability to pay and document that it is deductable from salary including a balancing figure if the employee leaves while the loan is outstanding.

One place I worked we routinely made interest free loans to employees. generally repayable over 6 months. as the MD so eloquently put "We have cash in the bank, I don't want any of my staff going to any F##### loan sharks!"

Thanks (0)
Replying to [email protected]:
Routemaster image
By tom123
01st Apr 2021 14:20

Often a way to help staff out, that is generally appreciated, at very low actual cost.

Perhaps more common in some sectors, (like manufacturing) and smaller SME businesses etc.

Thanks (0)
Share this content