Sophos was gearing up for a private life – then someone remembered the bike scheme Today was meant to be Brit security biz Sophos's last day on the London Stock Exchange following its £3bn purchase by a US venture capital company. But there's been a bump in the road, a stick in the wheel, because Sophos was a member of the UK government's "cycle to work" scheme – which offers staff loans to pay for bicycles …
I presume a number of highly paid advisors have got a suitable bollocking for this cock-up.
I expect a lot of commentards are fuming "stupid red tape", but I think having the FCA approve people who make loans is, in general, a good thing. I suppose it would be possible to complicate the regulations further, by excluding "Cycle to work" loans - but adding loopholes to that sort of regulation is just the sort of thing that bad actors are waiting for. The alternative is a reasonably light-touch approach ... and adding another item to the "things to check when taking over a British company" checklist.
My guess is that this was an attached legal entity created for marginal tax/accounting advantages or similar. Im sure there's other ways of getting the Bike to Work scheme in.
I'd also guess that changes of ownership of this nature are the closest thing to a rubber stamp the FCA does - just that Sophos didnt do the paperwork in time.
I dont think so. The limit is a grands worth of benefit anyway. It used to be interpreted as a grands worth of entire bike but it was recently "clarified" to be a grands worth of tax discount on any amount of bike or bike related gear (frames, wheels etc).
As for a grand buying a lot of bike there is a certain segment of the bike buying population who would disagree with you. Usually over-caffeinated MAMIL's. (It me).
https://www.sigmasports.com/item/Pinarello/Sigma-Sports-Exclusive-Dogma-F10-Dura-Ace-Di2-Road-Bike/KHCU
Tis what Team Sky/Team Ineos ride. Not that I can afford one or would buy one even if I could.
The limit is NOT a grand - that is what the article s getting at.
The limit is very often £1000 as this is the maximum amount that a company can 'loan' you if it is not a licensed to provide credit in this way. Many software and services firms ARE becuse they offer payment terms to their clients. For this reason some schemes offer well over £1000 you will see this becoming much more common as there are no decent ebikes for less than 1k anyway.
I think it is people on the scheme with an agreement worth more that £1000 which caused the issue
I'm of the North, but live in the South these days, and yeah can see why a grand seems a lot for a bike.
But, when I started trying to save money (and time) by riding the 11 miles to work (and 11 back!) I spent a couple of hundred quid on my first bike that literally fell apart after 3 weeks (lost my argument about fair wear and tear as description technically said leisure bike, not commute...).
I then used the bike to work scheme to get a mountain bike for £999 ("as the crow flies" was quicker than roads, and I luckily had a good chunk of legal off road route) which seemed excessive at the time, but it lasted me 8 years, got me out for some fun on the weekends, and I still managed to sell it for £250 in good condition.
Instead of paying £200 a month in train fare, I put aside £50 a month for repairs/maintenance - which was more than enough, and I was actually in decent shape!
Sadly, I've since moved to Kent and my new job is 37 miles away from home which is a tad far for me to ride. Oh, and the drivers around here are insane.
But I still remember the adage: cheap, light or strong - pick any two!
lost my argument about fair wear and tear as description technically said leisure bike, not commute...
The bike doesn't know when it's being ridden for leisure or commute! Did you do in three weeks a total mileage greater than what can be expected in between yearly leisure bike service intervals?
I felt I hadn't done too much (about 330 miles) but they disagreed. Also said it was for light off road use "such as towpaths" when I'd used bridleways (lack of canals unfortunately... so it was my own fault.
I should have known better buying a bike from a car parts shop - but to my mind at the time, £200 was a lot for a bike, but sadly experience has taught me that's cheap, and you get what you pay for.
Glad I learned the lesson with a bike rather than a car!
Many bicycles are purchases (a little like gym subscriptions) with the best of intentions but little follomup. One assumes they the retailers such as Halfords realise they can get away with shoddy procurement (little things such as lubing the bearings) and these leisure bikes just can’t hack a wet spring let alone winter. No reason for them not to be held liable for a falling apart with so little use though.
Most of our bikes came from a long-established independent bike shop in Cardiff, sadly now closed, but youngest's first bike came from Halfords. It wasn't used an awful lot, and mainly in the garden and the road outside. A little on a local cycle track.
After a couple of years, but before we were ready for the 'next size up', the bearing in the bottom bracket collapsed. Unexpected but not a problem - done several over the years.
Bought a pair of ring bearings, took the thing apart only to discover that the blasted tube wasn't even round on one side. No wonder it had failed early.
Mashed it about a bit to improve things (unexpextedly soft metal) and it lasted another couple of years until we were ready to do the hand-me-down shuffle again.
But I'll never buy another bike from Halfords.
M.
They removed the £1000 limit last year sometime but prior to that you had to have authorisation from the FCA to lend more than that to your employees. This typically meant that only companies which already had FCA authorisation (finance companies etc) would go over £1000.
The limit has been increased in particular to include e-bikes which typically cost well over £1000.
"Because I don't know about the beautiful south, but a grand buys quite a lot of bicycle where I live."
It depends on the circumstances, I guess - I imagine storage conditions (or lack thereof) at some employers will push some people towards bikes of the compact folding variety, which can be quite pricey for what is "not a lot of bike" (e.g. a Brompton is around £850).
According to my read of the story, if any one or more individual employees are loaned that much for a bicycle and bike safety equipment (helmet, reflector vest, knee pads, elbow pads, ...), then the rule applies. Most employees may opt for far less. All it takes is one.
"I presume a number of highly paid advisors have got a suitable bollocking for this cock-up."
In a similar vein: many years ago a men-only club in London decided to move with the times and admit women as members. So the articles of association, etc. were revised and their committee went to the solicitors to sign the documents. Then the most junior person present timidly mentioned that perhaps they ought to take a look at Article 1 first, which stated "The objective of the club is to promote intercourse between members."
@MJB7: "... adding another item to the "things to check when taking over a British company" "
How about making it more difficult to to sell British companies to overseas buyers? "Taking back control" could start to mean something, and be an advantage to real people, not the sharks at the top hoping to make a killing at the expense of everyone else.
Glad to see the usual names cropping up again:
J.P. Morgan Cazenove (lead financial adviser and corporate broker to Sophos)
Goldman Sachs (financial adviser to Bidco and Thoma Bravo)
Kirkland & Ellis International LLP is acting as legal adviser to Thoma Bravo and Bidco.
Slaughter and May is acting as legal adviser to Sophos.
No mention of the auditors this time.
I stopped using Sophos when they diabolically screwed up an update which took out pretty much every updater on the system (at a level where the files responsible were deleted by default). This killed off a large number of programs on PCs and servers and also killed off Their own software meaning it couldn't be updated.
Therefore it wasn't trivial to fix the Sophos agent even when they eventually created a fix. Trying to fix the hundreds of other programs wasn't as easy as it should have been when some had originally been installed by the supplier and a few other complications.
It took a few days of 24 hour work to get workable systems for most staff, weeks to sort out most of the issues and some issues were never sorted out fully.
Sure there was some learning ( such as making sure to change the defaults for a 'guaranteed virus' to quarantine rather than delete. Ensuring imaging of some single use devices that have specialist software on etc.
However in the debrief the Sophos software update had been tested through at least 5 processes before deployment by them. They never spotted that the update would kill itsef!
Apparently all testing for a Windows update is done using linux test tools and so this problem never arose.
We had more disruption from this event than a virus or malware had ever affected us. It made it a bit more galling as the support centres shut down at their allotted time and there was messages oftahnks to their teams for their hard work as the companies affected were sleeping in short shifts in the office trying to get all the PC back on by the next working day.
They did something a little similar after we moved to a different company, I heard.
If a commentard on the internet says it - it must be true!
Care to elaborate on your otherwise worthless post?
In my experience its the closest way to a slam dunk of getting a great discount on a new bike you are ever likely to find. Providing you dont leave the employer almost immediately after getting said new bike. (My DOH!)
From personal experience:
-You can usually save more by shopping around and negotiate a 0% finance deal than by buying through the scheme, including tax savings, usually from thre same shop that would have taken the schene voucher!
-As you don't own the bike you only lease it (until you finish paying for it) you can't insure it on your house insurance so have to take out specialist insurance negating any savings
-Noting above the business won't replace it when it's mashed up or stolen
-You lose any tax advantage if you leave before you've finished paying for it - or if you're made redundant
Also, from what happened at my last employment a number of years back. When the end of the term came, the bike had to be handed back, or a negotiation to but it, or the bike could be given to you but the value of the bike was subject to tax via BIK.
Unless the company was prepared to (what technically would be fraudulent) reduce the value of the bike down to a nominal value then the cost of the final tax payment could wipe out the advantages and then some, for a decent bike with good residuals.
^^^^ exactly what I found. By the time I'd factored in managing the scheme, accounting for it and so on, I would have done better to give my staff a hand-out with the proviso that they spend it on a bike. Our local independent bike shop owner also told me afterwards that if I'd walked in with the same amount of money in cash, he'd have struck a better deal with me.
My rule of thumb is that because of the red tape that gets in the way any kind of grant or scheme that is going to net the business less than £5K is not worth the time and effort of applying for it.
The vouchers have a ~ 10% handling fee paid for by the shop. Bikes are often on massive discount, e.g. at the end of the summer. Bike shops often disallow use of ctw vouchers for discounted bikes. Especially if you are prepared to work out your geometry and fit and so go mail order, it's easy to save the equivalent amount of cash but without all the hassle. CTW vouchers are good if you prefer to deal with a LBS or a specialist retailer. God only knows how much people like Condor must take in vouchers each year.
Cynicism is easy. And of course, sometimes justified.
Any plans are firmly in the mind of Toma Bravo and/or the current board, but they ain't circulating any plans internally. Which, given that it's still a public company, does make short term sense. Next few days will no doubt given an opportunity for us to find out (Sophos employee, posting anonymously)
Have you seen it recently? We use their Endpoint Protection software here on our Windows machines. It is already mind-bogglingly bloated. 20 or so components running at all times, usually eating 500-700 Megs of memory, sometimes more (and that was after I tweaked policies to turn some stuff off). The only positive thing about it is that they manage to waste that much memory without actually bogging the machine down to where it's unusable. It's merely unbearable.
The only Sophos product I ever cared much for was the Astaro firewall that they bought 8-10 years ago. They didn't force them into the borg - last I checked in 2017 or so, it was still mostly the old Astaro Linux team that was selling and supporting the UTM product.
Maybe they could sell off the Sophos UTM into a separate company ..(the bit that works) may be call it something like Astaro ? .. then they can keep the Sophos XG as it would be on par with Symantec /McAfee et al ..bearing in mind most VC buy outs end up doing the old Slice & Dice / Asset strip 2 step..
"the process that sees hordes of overpaid junior lawyers and accountants poring over every tiny detail of a business before going ahead with a merger or takeover."
In most accountancy or legal firms, overworked is more accurate than overpaid. The juniors do the donkey work (usually with significant amounts of travel and unpaid overtime), the senior managers are paid well to apply the whip to keep things going and the partners rake in the money and put the entertainment on expenses.
Oh...and the juniors are responsible for all mistakes.
CTW schemes were only worthwhile for higher rate taxpayers, unless the employer also took on the VAT element of the agreement. In my experience not many did the latter because it was a faff. And if you were a higher rate taxpayer you were probably not interested in buying a £1k bike because that's not what Wiggo was riding down the shops with his mates. Quite a few of the online bike retailers would add a service charge for using CTW, or wouldn't let you buy a discounted bike on it, and certainly my local bike shop were willing to give a bigger discount if I didn't use CTW. Equally they were happy to be creative in getting around the £1k limit. What it has done is distorted the UK market with brands competing to offer the best components at the £1k limit
How many loans are still out, at what total cost? If it is the easiest and most convenient way to get this over, can't they just forgive the loans and clear them off the books? Yeah, that means those lucky employees would get a de facto pay bump, and have to report it as income, but that would cut this Gordian knot. Call it "stupid tax" on the acquiring company, and be done with it.
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