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Close-up of man riding his bike in the street

Any Answers Answered: Employment allowance and Cycle to Work

8th Jun 2018
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This month, TAXtv hosts Tim Good and Giles Mooney consider AccountingWEB member questions on the Cycle to Work scheme and employment allowance legislation.

To watch the full video of Good and Mooney answering readers’ questions, click here or scroll down to the bottom of the page.

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Limit to cost of e-cycle provided to employees?

AccountingWEB member mikesole kicked off proceedings with a question about the Cycle to Work scheme. The basic gist of the question is that while most people think there is a £1,000 limit in the Cycle to Work scheme, he can’t find any such rule in the legislation.

The member then went on to ask if he could just go ahead and buy a bike from £2,000 and get all the benefits from that.

Good pointed out that it is not an HMRC limit - the rule is limit governed by the Consumer Credit Act, and unless the employer has a consumer credit licence the Office of Fair Trading has said there is a limit of £1,000 on the amount of value of such arrangements that can be offered.

Good also expanded on an example of a one-person company, and whether they could provide themselves with a bike through the company that cost two or three thousand pounds (found at 2m52 in the video).

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Employment allowance query

The second and final question came from Paul Hawes, who asked a question about the employment allowance.

“The legislation for the NI allowance says that connected companies at the beginning of a tax year cannot claim multiple lots of the allowance,” said Hawes. “Does this mean if a director of a company sets up another company during the tax year that the new company can still claim the allowance in the tax year the company is set up?”

Good and Mooney discussed various points raised by the question, including outlining the definition of ‘common control’ and when it can be disregarded (at around 4m35 in the video).

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Full video

For the latest episode of TAXtv visit PTP Interactive. TAXtv is a monthly tax update programme available as an annual subscription from £199, (11 issues plus special editions) to view online, download from the internet or watch on DVD.

Replies (2)

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By neilbowler
11th Jun 2018 11:29

How old is this video? Neither the OFT nor Consumer Credit Licences have existed for several years now.

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Tim Good profile image
By Tim Good
11th Jun 2018 14:00

Good point. It is now governed by the Financial Conduct Authority and found in para 2.11.3 of the Perimeter Gudance Manual. Same difference though.

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