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I was expecting a slightly bigger hit this year at the end of my current £1000 hire agreement, but a letter from HR today has me really confused.
The gist of it is that on the 13th month I will pay 7% of the value of the bike, and then the scheme will continue for a further [b]31[/b] months, at the end of which I can return the bike, or keep it and pocket the 7% payment made on month 13.
Now, admittedly, I've just been on my work night out so am far from sober, but as far as I see it, they're suggesting paying 7% of the value of the bike on month 13, then paying a total of approx £2500 gross over the next 31 months before making it mine??
I can't phone them till monday, but can someone at least confirm this sounds completely daft and I've either drunkenly misread the letter or they've misprinted?
Cheers
I'm sure they mean that you hold onto the bike for another 31 months - [i]without any further payment[/i].
I blame the alcohol!
If its without further payment then why would they stipulate 31 months?
Despite myself I'm just interested how 7% + 31 months of £0 can get them around HMRC? Is the perceived market value of a 12+31 month old bike precisely £0?
I guess I'll just sober up (from 15yr old Dalwhinnie courtesy of the manager, seems rude to complain) and phone them on Monday.
Fully depreciating the asset I should think
FMV decreases over the period according to a calculation provided by HMRC. You can look it up (when you're able to ....)
Yes yes, Ok Druidh, I think my posts have been pretty articulate, considering... 😀
Pertrieboy, that was the sort of thing I was thinking about, guess they have to formalise it, even if they're just formalising 31 x 0!
I was told by a colleague last week that this is happening to ours to ensure the bike is essentially worth sod all when we get to choose to keep or get rid. Get's round the tax changes I assume.
I assume the aim is to stop people blatantly taking the p**s and having a new £1000 bike every year. In order to qualify for the tax benefits and not get hit with a large final settlement, you must now lease the bike for 3 or 4 years.