cycle scheme and under minimum wage

[cheeky_chops]

myself and 2 others run our own company and pay ourselves sub £500pm + dividends

Now the cycle to work scheme says if you are under minimum wage you cant participate. Appreciate i cant claim NI/tax but saving 17.5% vat would be useful. Anyone had this before? cheers

Edited by cheeky_chops on Friday 16th July 11:43

[sjg]

All of these salary sacrifice schemes (childcare vouchers, etc) are only available if your salary doesn't drop to below minimum wage after the payments.

Pay yourself more, or possibly buy it as a company asset?

[cheeky_chops]

sjg said:

possibly buy it as a company asset?

Yea, there is a option to buy it as a "pool bike" but all 3 of us work from home!!

[bigandclever]

If you've got your own limited, I'm sure the company can buy the bike as an asset, claim the VAT back and then (I think) write the capital down as depreciation against profit over the next (say) 3 years.

The company lends the bike to you, and (if it wants) can sell it after the 3 years depreciation to you at (say) 5% of original cost. So then you own it personally.

This is possibly one that Eric might have some input on, but I doubt he comes in here, try cross-posting in the Finance forum

[Raven Flyer]

If the bike was an essential tool to the business then you may get it through a VAT audit, but otherwise I seriously doubt it.

[bigandclever]

VAT can be reclaimed on bicycles if they are used to reduce car use, increase staff health or for the implementation of a green travel plan.

runabikescheme.com said:

As the equipment is for use in a cycle to work scheme for employees, HMRC accept that the VAT incurred is for the purpose of the employer's business and is therefore subject to the usual rules on VAT recovery. The benefits to a business are seen as attracting, retaining and motivating employees and promoting a healthier workforce.

Now, that relates to a bikescheme, rather then just buying a bike, but I would've thought the same rules apply?