Motorcycle - How Treated
Discussion
Can justify purchasing outright through the business. Accountant is pretty open BUT believe it is my responsivity to get it right if HMRC ever question.
Unsure how to treat depreciation or write down. Believe it can fall under Plant & Machinery whereby eligible for the 100% Annual Investment Allowance ie worth £? after 12 months as the asset is/was 100% for business use. (Keep mileage logs, dates, etc. Also own personal motorcycle thus keep private vs business separate).
My dilemma is what is the disposal value at the end of the year. Fair market rate/price could be many £000s. Essentially, can the value of the motorcycle be written down to £0 over the 1st year?
Unsure how to treat depreciation or write down. Believe it can fall under Plant & Machinery whereby eligible for the 100% Annual Investment Allowance ie worth £? after 12 months as the asset is/was 100% for business use. (Keep mileage logs, dates, etc. Also own personal motorcycle thus keep private vs business separate).
My dilemma is what is the disposal value at the end of the year. Fair market rate/price could be many £000s. Essentially, can the value of the motorcycle be written down to £0 over the 1st year?
To do it properly treat it like any other plant and equipment, depreciate in the accounts around 15% pa. The AIA is purely for the Corporation Tax liablity and it will qualify.
If it is genuinely 100% business use remember to claim back the VAT, if registered.
When sold on treat as any other asset, remember that VAT is included in the selling price, and deal with any profit/loss appropriately.
If it is genuinely 100% business use remember to claim back the VAT, if registered.
When sold on treat as any other asset, remember that VAT is included in the selling price, and deal with any profit/loss appropriately.
As alluded to above and assuming you're referring to a Ltd Company, the book value will differ between your Statutory accounts and your Tax computation. For the Stats you'll follow your normal depreciation policy, whereas for the tax you can put it down to zero if qualifies for AIA. Be aware that if you currently own the bike privately and then sell to the business it won't be eligible for AIA.
Owning other bikes privately will be a help if you get HMRC asking why there isn't any private use. Also note helmets come under PPE so no BIK.
Owning other bikes privately will be a help if you get HMRC asking why there isn't any private use. Also note helmets come under PPE so no BIK.
Ean218 said:
Ooh that's cute, would that include gloves, boots and leathers too?
Debate and interpretation alert of HMRC guidelines required by our accountant-gurus ............all the safety (PPE) equipment is claimable HOWEVER whilst gloves, leathers and footwear are seemingly VAT allowable BUT does this apply to helmets??? (Note helmets are claimable as PPE but is their VAT element???)Gassing Station | Finance | Top of Page | What's New | My Stuff