Cycle To Work Scheme

Accounting
1

I am going to start Cycle To Work Participation and I need to know how to file any equipment (including bicycle) purchase in Quickfile, and how to record the subsequent payments from the employee and final offer to purchase for the employee.

The government website is almost ok to follow, but as usual the actual doing leaves questions, for example:
I understand there is a £1000 limit based on the credit license limit advised for this scheme.
Can I run this myself, or do I have to sign up to e.g. cyclescheme, which I think doesn’t offer as much benefit.
Could I reclaim the vat even if I went on to VAT flat rate?

2

Here is guidance on Cycle to work Scheme

If you use the flat rate scheme, you can reclaim the VAT you have been charged on a single purchase of capital expenditure goods where the amount of the purchase, including VAT, is £2,000 or more.

You deal with these capital expenditure goods outside the flat rate scheme. This means that you claim the input tax in box 4 of your VAT return.

If the supply is:

more than one purchase
under £2,000 including VAT, or
of services

then no VAT is claimable, as this input tax is already taken into account in the calculation of your flat rate percentage.

Recoding wise, you can record cycles as asset for business , you can create ne asset balance sheet account and charge employees with rent, t end of asset useful lief you can dispose of to employees as normal asset disposal

3

I will probably need a tutorial on creating the asset balance sheet and hat category to put the purchases under - can you point me to a link please and I will try it from there…

… If get stuck after that I’ll be back!

4

Before that, would you be buying cycles for your employees? Why cannot they get it themselves and claim mileage allowance

5

I don’t know. I have looked into the scheme and wondered just how much of an incentive it is , or is it smoke and mirrors, in that way that the UK government do in seeming to offer an incentive while not really offering anything so much as juggling what you think you are gaining…

… How might mileage on a bike compare against Cycle To Work? Now you have mentioned it I am intrigued…

And what category do I use for the Purchase? motor vehicle seems the closest, but it isn’t a motor vehicle

6

Here is link to mileage allowances http://www.faradaykeynes.co.uk/index.php/tax-rates/authorised-mileage-rates
Employees can claim provided they use their own bike not from employer

To create a new asset account in balance sheet for Cycles, you need to click on Reports > chart of Accounts > Add new account > in the green box pick category as Assets and Liabilities > Account Name , type Cycles and Sub-category will be Motor Vehicle. In note you can mention Cycle to Work scheme and click on save

You will have to create accumulate depreciation account for cycle as well as follows
To create a new asset depreciation account in balance sheet for Cycles, you need to click on Reports > chart of Accounts > Add new account > in the green box pick category as Assets and Liabilities > Account Name , type Cycles Depreciationand Sub-category will be Short Term Loan. In note you can mention Depreciation Cycle to Work scheme and click on save