Cycle to Work 2011 and VAT increase

kelsen

Anyone know how the VAT increase on Jan 4th will affect the eligibility of bikes currently priced at or just under the threshold of £1000?

hatbeard

I'd imagine it's down to the retailer as to whether they increase the price of the bike or take a hit on the vat themselves.

alan_sherman

The potential saving will increase though as the VAT element is the main part of the saving these days (i.e. with the new final valuation rules since October). And extra 2.5 percent.

richk

alan sherman wrote:

The potential saving will increase though as the VAT element is the main part of the saving these days (i.e. with the new final valuation rules since October). And extra 2.5 percent.

But only if your employer can reclaim VAT and if they pass that saving on to you.

sketchley

£1000 rule is due to consumer credit act details here http://www.oft.gov.uk/OFTwork/credit-li ... ence/cycle

States very clearly "up to the value of £1,000 (including VAT and not taking into account an income tax exemption). "

Reason for this is your liability includes the VAT, as for examples sake you leave 1 day after getting said bike you would "owe" your employer a disposal fee of £1000 any more and the scheme would need registering under the act.

So to answer oringal question no it will still be £1000.

tailwindhome

The extra vat only means an extra £20 on the retail price

I reckon the retailer/manufacturer will absorb this cost to stay below the £1000 mark.

(Or down spec)