Share this content
12

Cycle to Work Scheme Entries in SAGE 50

Didn't find your answer?

Hi 

 

Hoping someone can help because I cannot find a straight forward answer regarding how to account for the cycle to work scheme.

 

Context:

We have a bike with the cycle scheme purchased for £8500 including VAT. A finance company has paid this off on our behalf whilst we pay them as below. I have an invoice for £8500 to us so we can claim back the VAT.

The finance agreement in place is paying off the bike at £777.75 per month - split £708.33 bike and £69.42 interest

 

How do we account for claiming back the VAT? How do we account the for the Employee benefit side?

 

Thanks for the help

Replies (12)

Please login or register to join the discussion.

avatar
By Wanderer
03rd Mar 2020 18:27

Split the transactions down:-
1. Buy a bike, process the invoice.
2.Take out a loan (finance agreement) to borrow £8,500.
3. Do some more reading on the employee side. There is no benefit in kind. Don't forget to charge the employee VAT.

Thanks (1)
RLI
By lionofludesch
04th Mar 2020 06:21

What fool would buy a bike for £8500?

Are you straight lining the interest in the accounts?

Thanks (2)
Replying to lionofludesch:
avatar
By RyanTheBeanCounter
05th Mar 2020 08:11

Someone who wants their employees to get to work really quickly. Lighter weight, streamlined cycling with less drag. Big brain time.

Thanks (0)
Replying to RyanTheBeanCounter:
RLI
By lionofludesch
05th Mar 2020 09:45

I'd say someone with more money than sense.

Is there any private use of this bike ?

Thanks (0)
avatar
By kestrepo
05th Mar 2020 11:21

I thought that there was an advisory upper limited of £1K per bicycle under the cycle scheme rules!

If you are not using a dedicated cycle scheme service provider for this transaction you will need to read this:

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

You will need to draw up a hire agreements etc.

If it helps I have used https://www.cyclescheme.co.uk before and found them easy to use and helpful - I have no connection to this company other than using their services.

Thanks (0)
Replying to kestrepo:
avatar
By Wanderer
05th Mar 2020 11:50

kestrepo wrote:

I thought that there was an advisory upper limited of £1K per bicycle under the cycle scheme rules!

Nope! That's only a limit over which the employer might need to have Consumer Credit Licence. Even then there's a couple of options when an employer without a CCL can exceed this.
Thanks (0)
Replying to Wanderer:
avatar
By C Graham
05th Mar 2020 17:20

Who is responsible for the insurance?

over the £1k I think companies have to register with the FCA to operate under salary sacrifice. Even so £8.5k goes way beyond a realistic amount to buy it via the cycle to work scheme

Thanks (0)
Replying to C Graham:
avatar
By Wanderer
05th Mar 2020 17:50

C Graham wrote:

Who is responsible for the insurance?

The agreements are always written to make the employee responsible for losses etc.
C Graham wrote:

over the £1k I think companies have to register with the FCA to operate under salary sacrifice.

No! Not always. I've already stated that.
Thanks (0)
avatar
By aishaparpia
09th Mar 2020 16:54

Hi - please ignore the price of the bike. Just required some help with entries to the nominal.

Thanks (0)
Replying to aishaparpia:
RLI
By lionofludesch
09th Mar 2020 17:10

The price of the bike isn't entirely irrelevant. Is it provided to a run-of-the-mill employee or the director's son ?

From an accounting point of view, you just need to deal with it as a normal HP agreement.

Or charge the repayments to the Director's Loan Account, depending on the circumstances.

Thanks (1)
Replying to lionofludesch:
avatar
By aishaparpia
09th Mar 2020 17:25

it's only an example

Thanks (0)
Replying to aishaparpia:
RLI
By lionofludesch
09th Mar 2020 17:36

Ah right.

Well, choosing an example at more than ten times the price of a decent road bike from Evans Cycles was always just going to invite folk to drift off at a tangent onto more interesting issues.

Thanks (0)
Share this content

Related posts