How is the ownership fee calculated?

Her Majesty's Revenue and Customs (HMRC) has published the following ‘Valuation Table’ to be used to calculate the market value of bikes and accessories at the end of the Hire Period.

'Own it later' agreement:

Cyclescheme has chosen the best option for the employee. The 'Own it later' agreement fee is calculated as below:

• Figure to which market value is applied = (Equipment value - Helmet value) minus VAT
• The appropriate Valuation Table percentage is then applied to this amount, and VAT is added back on

Here’s an example based on an equipment value of £550 including a £30 Helmet:

• Figure to which market value is applied = (£550 - £30) = £520.00 - VAT = £433.34
• £433.34 is less than £500, therefore;
• 4 year valuation percentage = 3%
• 4 year valuation = 433.34 * 3% = £13.00 + VAT = £15.60

'Own it now' fee:

The 'Own it now' agreement fee is calculated as below:

• Figure to which market value is applied = (Equipment value - Helmet value) minus VAT
• The appropriate Valuation Table percentage is then applied to this amount, and VAT is added back on

Here’s an example based on an equipment value of £900 including a £30 Helmet:

• Figure to which market value is applied = (£930 - £30) = £900.00 - VAT = £750.00
• £750.00 is more £500, therefore;
• 1 year valuation percentage = 25%
• 1 year valuation = £750.00 * 25% = £187.50 + VAT = £225.00

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