The £1000 limit is governed by the Group Consumer Credit Licence issued by the OFT to cover the employers Cycle To Work schemes which is a regulated Hire Agreement under the Consumer Credit Act. To exceed this limit a company would need their own Consumer Credit Licence – about £750 to purchase I think.
We've set up our own scheme and are not willing to exceed the £1000 limit as the employees top up is a bit of a grey area during the hire period and valueing the bike at the end of the agreement. We also feel it is not within the spirit of the scheme. The same goes for purchasing frames, components etc.
Not wishing to be a miserable begger but every week there are threads on this public forum on how to bend the rules for the scheme, and I think we will ultimately see it's early demise