hmrc

Hey Dave,

I've just signed up for the C2W scheme through my employer and spent a fair amount of time trying to understand the new scheme.

basically the saving now depends on how flexible your employers are in organising things.

the 12 months salary sacrifice has remained pretty much the same in so far as you pay (voucher amount / 12) per month and the employer can pass on the vat saving etc as before as well.

the issue comes with the fair market value payment which you have to pay to take 'ownership' of the bike and is based on the valuation table provided by the hmrc

Currently it seems that the best way to handle this is for the company to lease the bike to you for 36 months (payments only happen for the first 12 months) and then if you're still at the company at that time you extend the lease by a year and continue to do so until the FMV is cheap enough for you to pay back without it negating the bulk of your initial savings.

another option is for your company to declare the final payment as a taxable benefit in which case you are only required to pay the tax on the FMV amount) and not the full payment (this means the company does not receive anything for the final payment.

It's such a fragile system it seems that to be able to make any substantial savings you're required to meet such specific criteria / circumstances that it hardly seems worth it but at the end of the day it's an interest free loan and you do save *some* money on rrp so if like me you're skint and want to get a half decent bike it's still not all bad.

I just need my voucher to arrive asap as my bikes been held for twice as long as it should already and it's the last one in stock across their entire company and the newer 2011 model is £250+ more which really will obliterate any savings I might make if i dont get the cheaper sale model. 🙁

oh and the scheme explicitly states you must be able to give the bike back after the lease period (e.g. the 36 months I stated above) without paying a penny more. this will mean your employer is then stuck with a bike they have no use for as a company asset but that's not your problem.