HMRC's salary sacrifice guidance for cycles: time for the repeal of s 244?

HMRC’s guidance

In December 2009 HMRC issued a guidance note on what it perceived to be misuse of the tax and NICs breaks in relation to employer provided
bicycles and bus passes.The note raised issues of detail that employers using packaged schemes were unlikely to have considered. It also offered a provisional truce and set out details of requirements for future schemes.
An updated version of the note is available via www.lexisurl.com/vkTaE.

Background

Cycle to work schemes are based on legislation introduced in Finance Act 1999 now rewritten as ITEPA 2003 s 244. That section simply states that no liability to income tax arises in respect of the provision for an employee of a cycle or cyclist's safety equipment if:

• there is no transfer of the property in the cycle or equipment in question.
• the employee uses the cycle or equipment in question...