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.

For further information click here

Age of bike	Acceptable disposal value percentage
Age of bike	Original price of the bike less than £500	Original price of the bike more than £500
1 year	18%	25%
18 months	16%	21%
2 years	13%	17%
3 years	8%	12%
4 years	3%	7%
5 years	Negligible	2%
6 years & over	Negligible	Negligible

There is still the flexibility of choosing different ways of using the above matrix,

The main options are:

This may not be the best option for employees as reduces the overall savings they make during the scheme. Employers also need to consider whether they are at risk in terms of recovering final payments through net salaries.

Following the matrix, transfer of ownership is deferred to a later date when the residual value is lower or even nil. This will require a new Agreement to ensure the employee has rights to use the bike under the same conditions as the scheme while the employer still owns the bike. This reduces the cost for the employee, enables the employee to continue using the bike in the same way as before, but means they will not actually own the bike until much later. Please call the helpdesk for details of the new extended Agreement

Companies which are used to working with P11D may prefer this option as it allows employees to take ownership of the bikes and represents savings which are more closely aligned to those schemes run within the old guidelines. This option does however increase P11D administration but in some cases it may be possible to agree a simpler arrangement to deal with the benefit in kind declarations with the local HMRC office.

view the HMRC guidelines