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bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I moved to a new company a month ago and i recived a letter

Customer Question

I moved to a new company a month ago and i recived a letter from my old company last week asking me to pay money for a bike to work scheme that fininshed in Feb 2013.

They say i need to return the bike which i sold last year or i can own it if I want and they will write to the HMRC and adjust my tax code so they can remove the fair market trade amount from my future pay packets at a value of 17% of £800 = £136

I have also looked into my pay slips and the loan was for £800 before all the tax deductions and i actully paid back £733.

Are they correct ?
Submitted: 3 years ago.
Category: Tax
Expert:  ben.jones replied 3 years ago.

Ben Jones :

hello my name is ***** ***** it is my pleasure to assist you with your question today. have you approached you previous employment HR department with the evidence of you payments

Customer: Not yet that's tomorrow's plan but regardless to that do they have any right to do this as it voids the whole savings of the scheme they were not very good hr and normally wrong
Ben Jones :

Ok thank you leave it with me I need to look up a few things and then get my advice ready.I will post back on here when done there is no need to wait and you will receive an email when I have responded. I need to go off line for a few hours and will get my advice ready for you on this latter this evening regards ben

Ben Jones :

Hi, not sure if you received my message earlier, I have moved your question to our Tax category as it is the best place for it to be dealt with. A tax specialist will be in touch in due curse to assist you. Many thanks

Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question.

 

I would suggest that you write to your old employer stating the facts of the value of the bicycle you received and the repayments made leaves only the sum of GBP 67 outstanding. HMRC advice on this matter is:

 

'If a cycle is transferred to an employee after a period of use as a benefit during which the exemption described in EIM21664 applied, the transfer may be taxable either as earnings within section 62 ITEPA 2003 or as a benefit (see EIM21667). In either case, as long as any payment that the employee makes for the cycle is equal to or more than the market value, there will be no tax charge under the employment income rules.

 

If the employee pays less than market value, the difference will be taxable as employment income.'

 

Thus the action by your old employer appears misconceived. In any event, as a past employee their comments to HMRC may not be heeded. Watch your tax code and if any adjustment would recover more than the outstanding 63 quid is imposed then write a letter to your current tax office pointing out the correct position and requesting that your code be adjusted to collect the proper sum in accordance with HMRC instruction EIM21667a which I have quoted above.

 

I do hope I have thrown some light on your true position. In any event the matter can be taken care of at the end of the tax year through your annual self assessment tax return.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3811
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 3 years ago.
AMENDMENT

Paragraph 5, line 3; delete '63', insert '67'.

Sorry about that, doesn't alter the price of cheese as my old boss was wont to say, but might as well get it correct!
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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