End of scheme
The caboodle bike scheme is fully compliant and operates according to HMRC rules.
The scheme works on the basis that an employee can hire a bike from Caboodle over a period of either a 12 or 18 months, and then pay for the benefit through a salary sacrifice arrangement with their Employer. At the end of the hire period, Caboodle will contact the employee to make the end of scheme arrangements, they may purchase the bike at a fair market value at that time or extend the hire for a fixed period under a new agreement for a small refundable deposit. It’s worth noting though that HMRC rules for the scheme stipulate that there is no automatic right for the employee to purchase the bike at the end of the hire term.
Transfer of ownership options
The HMRC guidelines can be viewed here. There are two ways a bike can be valued:
This option is dependent on a process whereby 3 different items of documentation are required including photographic evidence (to ‘prove’ a true market value). Some providers have provided a questionnaire for the employee to complete at the end of the hire term but it is questionable as to whether this is too subjective and might be open for challenge if it is not deemed acceptable or realistic by HMRC.
HMRC have provided a set matrix of pre-determined values, which would not be challenged if adopted. The percentage values are based on the value of the bike and safety accessories at the outset of the hire term and the age of the bike at the point at which a transfer of ownership may take place.