Ways in which the Bicycle Scheme Works
10:38 PM
Admin
, Posted in
While many countries have implemented the bicycle scheme with great success, others are not quite familiar with how the system works for the benefit of both the employer and the employee. As an employer, it is important for you to understand the fact that as part of the scheme, you can loan a bike to your employee who agrees to pay for the same through a salary exchange scheme. The charges are deducted from the gross salary through a monthly reduction scheme. The employee is willing to accept a comparatively less salary for the pay back period.
Image Courtesy: Google images
At the conclusion of the pay back period, the employee is given the option of either returning the bike against the payment of a nominal amount or that of purchasing the bike. The schemes are designed in a way that the employer can make the most of the tax exemptions. Before implementing such a scheme, it is necessary to consider the bike tax scheme in place. There might also be some legislative requirements that should also be taken into account. These include:
- The adoption of compliant documentation as per the Consumer Credit Act
- Carrying out a proper salary exchange scheme through the company payroll that is regulated by the revenue and customs department
As an employer, you can choose to purchase all bicycles at one go and exercise your rights over them for the complete duration of the scheme. The scheme can also be availed through a lease. When it comes to leasing, the ownership of the bikes rests with the leasing company. Under any of these situations, the ownership right of the bike are transferred to the employee at the conclusion of the scheme and after the nominal payment is complete. Several companies have adopted the scheme and have encouraged their employees to abide by it.
0 Response to "Ways in which the Bicycle Scheme Works"
Post a Comment