Bike related tax question

[TheLemming]

Bit of an unusual one - my usual sources on tax related bits haven't run into it before and I'm looking for an idea of where to go with this.

I'll be in a position next year to be riding for a living, leading group riding holidays for much of the year and back to my day job in the meantime. I love riding, pure and simple and I'll get to do more.

Given that I should be able to claim a new road bike against tax as a work expense - along with kit, in the same manner that tools or ppe are claimable for any other occupation?

Its the proposed 4 grand price tag that seems to make my umbrella company nervous....

I don't suppose anyone is able to help me point them in the right direction?

[samj2014]

Sorry, what are you actually asking?

If you're asking whether you can claim the bike as a work expense -
firstly, is the company your own company? If yes, then do whatever you want, as long as your books add up.

If you're asking if you can claim the bike as a VAT-free expense, then yes, if you're VAT registered. You can't claim back VAT if you're not VAT registered yourself.

Though it seems like you know all this already. Your post is a little confusing...

Edited by samj2014 on Saturday 20th December 14:24

[Fourmotion]

samj2014 said:

If you're asking whether you can claim the bike as a work expense -
firstly, is the company your own company? If yes, then do whatever you want, as long as your books add up.

I hope that's a joke, although it sounds like you're making a genuine suggestion. The whole point of the question is the poster knows he can't do that.

OP, I think it's probably covered as work machinery, so you could claim capital allowances rather than expense it straight away. However, you might find it qualifies for a 100% first year rate as even some cars do now.

Any usage of the bike outside of the business purpose should be proportionately reduced from the capital allowance. Or stick your company logo on it and claim it as advertising time!

Sorry they're slightly vague answers, I haven't dealt with taxes for a long time! If you post this on the finance section EricMc or some of the others accountants have better knowledge here.

Good luck with the venture, it sounds like a dream job to a cyclist!

[samj2014]

Fourmotion said:

I hope that's a joke, although it sounds like you're making a genuine suggestion. The whole point of the question is the poster knows he can't do that.

Sorry, getting our wires a little crossed there.

I don't know what sort of situation he's in with regards to the company, but this is what I meant:

Some friends of mine who own sole trader businesses buy things through the businesses (such as guitars etc.) VAT free, so long as they can justify it for the business. I was implying that the OP do this, as it can be justified as a business expense, and the bike will be owned by the business, however if it's a sole trader business, then the money is essentially coming out of the OP's pocket, and the bike is pretty much owned by the OP.

Sorry I wasn't very clear on this before. I don't know how this would work within a larger organisation, as sole trader is the only type of business I have experience of currently. I wasn't sure if it was a sole trader business under a larger umbrella company or something?

[Fourmotion]

samj2014 said:

Sorry, getting our wires a little crossed there.

I don't know what sort of situation he's in with regards to the company, but this is what I meant:

Some friends of mine who own sole trader businesses buy things through the businesses (such as guitars etc.) VAT free, so long as they can justify it for the business. I was implying that the OP do this, as it can be justified as a business expense, and the bike will be owned by the business, however if it's a sole trader business, then the money is essentially coming out of the OP's pocket, and the bike is pretty much owned by the OP.

Sorry I wasn't very clear on this before. I don't know how this would work within a larger organisation, as sole trader is the only type of business I have experience of currently. I wasn't sure if it was a sole trader business under a larger umbrella company or something?

Certainly some crossed wires. VAT is a different issue - if all sales by the business are VAT-able then all purchases for the business will generally be VAT recoverable. I wouldn't want to make any assumptions on whether the OP will register for VAT, or even need to register for VAT.

Regardless of whose pocket the funds come out of, you can't simply expense a bike (or a guitar) even when it's wholly for business use. You would claim capital allowances on it, so it's unlikely to lower your taxable basis fully in the first year.

[TheLemming]

I've started to type a long reply explaining what why and where and instead of hitting post it's occurred to me that a long explanation of my specific financial arrangements and tax situation isn't perhaps the best thing in the world to drop on the internet.

As a result I should say "thanks guys" and live through the long and life draining process of querying it directly with HMRC.

[Magic919]

If you have a company, then buy it through the company and make it a company asset (capital expenditure). For your own good, you should check this with an accountant, which I am not. EricMc posts on here and he might respond if you post in the business section.