C2W - Fair Market Value Payment

ross_mcculloch
ross_mcculloch Posts: 478
edited July 2008 in MTB beginners
The fair market value payment element of the cycle to work scheme has always been a bit vague if you ask me.

For those people on here who are doing or have done C2W, what is/was your agreed fair market value payment to your employer for your bike?

Comments

  • GibboGT
    GibboGT Posts: 287
    The info I had read had suggested that the payment be 5% of the original value + VAT.

    I'm just waiting for my voucher now, in 12 months I don't think i'm going to be paying anything, but i'm just at a small company of friends.
  • boyse7en
    boyse7en Posts: 59
    I think (but would have to go through the small print) that you have to pay a fair market value for the bike. If you don't, then the Tax Office will construe it as a benefit in kind from the business to you, and you will be taxed on it at the original value of the bike.
    Remember, the payments you make out of your salary each month are to lease the bike, not to buy it - it remains the property of the company. Effectively, after the 12 month period, you buy a second hand bike from them.
  • GibboGT
    GibboGT Posts: 287
    [url]http://www.cyclescheme.co.uk/employee,faqs.htm[/url] wrote:
    It's your employer's choice whether they opt to sell you the bike at the end of the hire period. If you choose to become the owner of the goods, you may be offered the opportunity to pay the Fair Market Value for them from your net salary. Your employer needs to assess each bike separately as to its worth but in our experience the market shows values to be around 5% of the original value. If you choose not to buy the bike you will be charged the equivalent of the Fair Market Value to dispose of the goods, probably to a charity.

    The fair market value cannot be stated before or during the scheme as this could be considered a benefit in kind as hire-purchase does not warrant any tax-relief.
  • graham_g
    graham_g Posts: 652
    £0

    They never asked for a penny.
  • Chaka Ping
    Chaka Ping Posts: 1,451
    I was told by my company that they were going to take 10%, but I got made redundant and I don't think they ever did.

    The year before they took 5%.

    That's inflation for you, eh?
  • BobbyTrigger
    BobbyTrigger Posts: 377
    small print states 3% - 5%

    my place take 5%

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