In recent months, several benefits and HR managers have pulled their bikes-for-work schemes because of HM Revenue and Customs’ rules on how bicycles should be valued at the end of the loan period.
This is a sad state of affairs for a good benefit that, although taken up by very few staff, is highly valued both by those who use it and others who simply know it is available.
However, in the past couple of months, several bikes-for-work scheme providers have put their thinking caps on and adapted their products so that employees can continue to pay low final instalments, thus keeping this great perk on the road.
In a similar vein, some employers have extended the length of their loan periods to staff, which has the effect of keeping savings high for commuter cyclists.
While I believe that attempts to avoid paying tax in a legal but unethical manner should be curtailed, the measures around bikes-forwork schemes seem unduly punitive and go against the worthy aim of aiding workplace fitness. A return to the drawing board by HMRC on this one would be a very good idea.
Meanwhile, in November I was reminded of how well a tax-free benefit can work when government departments truly co-operate with the industry by seeking its input and advice. The benefit I am referring to is the share incentive plan (Sip), which celebrates its 10th anniversary this year (from the time the Share Schemes Act 2000 received Royal Assent; the schemes themselves launched in 2002).
It had cross-party support in 2000, and still does in 2010. A 2009 survey by IFS Proshare among the majority of administrators shows that almost a million employees now take part in a Sip. And this is despite the bashing suffered by share prices during the recession. Of course, not all organisations are able to offer share schemes (of whatever type), and it is not a universal truth that shares are good for all staff. But where shares or options are on offer and where they make sense in terms of people’s financial position, they can be a good way to stimulate the returns on workplace savings.
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