Company Bike = Company Gear?
Discussion
I had to google this as I'd guessed bikes would be treated the same as cars...but it suggests bikes really are treated like plant and machinery.
So lets make sure I've got this right... If I have made a profit and keep some cash in the business then I pay corporation tax on the profits, and when I withdraw the cash unless it's a dividend I pay regular tax on that too. But if the business buys a bike it reduces profits by the full amount and hence stops the business paying corporation tax, and if I only use it minimally I don't get taxed either? What am I missing? ...apart from maybe another bike in the garage.
So lets make sure I've got this right... If I have made a profit and keep some cash in the business then I pay corporation tax on the profits, and when I withdraw the cash unless it's a dividend I pay regular tax on that too. But if the business buys a bike it reduces profits by the full amount and hence stops the business paying corporation tax, and if I only use it minimally I don't get taxed either? What am I missing? ...apart from maybe another bike in the garage.
tvrolet said:
I had to google this as I'd guessed bikes would be treated the same as cars...but it suggests bikes really are treated like plant and machinery.
So lets make sure I've got this right... If I have made a profit and keep some cash in the business then I pay corporation tax on the profits, and when I withdraw the cash unless it's a dividend I pay regular tax on that too. But if the business buys a bike it reduces profits by the full amount and hence stops the business paying corporation tax, and if I only use it minimally I don't get taxed either? What am I missing? ...apart from maybe another bike in the garage.
Yep, pretty much - reduce your profit anyway you can to benefit yourself, buy a bike... buy a couple of bikes.. buy 10 bikes... however you'll have to explain to HMRC why you've got £0 profits but a warehouse full of bikes (if you get investigated, that is).So lets make sure I've got this right... If I have made a profit and keep some cash in the business then I pay corporation tax on the profits, and when I withdraw the cash unless it's a dividend I pay regular tax on that too. But if the business buys a bike it reduces profits by the full amount and hence stops the business paying corporation tax, and if I only use it minimally I don't get taxed either? What am I missing? ...apart from maybe another bike in the garage.
Profit for corporation tax purposes would not change (A), however you get to claim 100% of the cost of the bike as an annual investment allowance (B) in the year you purchase it.
Corporation tax is calculated as A-B @ 19% or whatever the rate is at the time.
So you do reduce your tax bill, but do remember if you sell the bike, you have to pay the tax back on whatever you sell it for.
Corporation tax is calculated as A-B @ 19% or whatever the rate is at the time.
So you do reduce your tax bill, but do remember if you sell the bike, you have to pay the tax back on whatever you sell it for.
I've ran a company bike for a few years now but as it's a true london commuter it's only an old 2004 Fazer 1000. To get it on the books as a 100% company bike it had to be registered to the company and it had to be kept at the company's premises. It's also on the company fleet insurance policy which has the advantage that anyone over 21 with 2 years full license on company business can use it. Because it's manly used in London it also had to a tracker fitted.
So apart from the real benefits to the company the main advantages for me personally is not a nice bike I can buy the most suitable summer, spring, autumn and winter riding gear on the company. So I do have quite a collection of jackets, helmets and boots
I can provide the other members of staff that use it with the same.
So apart from the real benefits to the company the main advantages for me personally is not a nice bike I can buy the most suitable summer, spring, autumn and winter riding gear on the company. So I do have quite a collection of jackets, helmets and boots
I can provide the other members of staff that use it with the same.I've run company bikes for a number of years and put all costs associated with the bike (gear, servicing, insurance, tax, intercom, satnav etc.) through the books. I also have my own personal bike in the garage.
I commute 150 miles per working day for 7 months of the year and keep a trip log that shows the work trips and their associated miles. My trip log shows I do no personal miles of the company bike (that's what my personal bike is for!!!). I know a number of other contractors who are also bikers and do periodically have business meetings with them on Saturdays or Sundays. (I'm contracting for the rest of the week so it's the only days available.)
My accountant, who is pretty damn risk averse and had to be persuaded to go and read up on exactly what is and what isn't allowed, is happy with this approach.
I've even had the VAT man (well, lady actually) come and look in my shed to see my company bike and my personal bike when my VAT return for the quarter I bought a new bike had them paying me rather than me paying them.
I commute 150 miles per working day for 7 months of the year and keep a trip log that shows the work trips and their associated miles. My trip log shows I do no personal miles of the company bike (that's what my personal bike is for!!!). I know a number of other contractors who are also bikers and do periodically have business meetings with them on Saturdays or Sundays. (I'm contracting for the rest of the week so it's the only days available.)
My accountant, who is pretty damn risk averse and had to be persuaded to go and read up on exactly what is and what isn't allowed, is happy with this approach.
I've even had the VAT man (well, lady actually) come and look in my shed to see my company bike and my personal bike when my VAT return for the quarter I bought a new bike had them paying me rather than me paying them.

black-k1 said:
I've even had the VAT man (well, lady actually) come and look in my shed to see my company bike and my personal bike when my VAT return for the quarter I bought a new bike had them paying me rather than me paying them.
That's the s
t, seeing as I'm claiming 10% person usage i couldn't claim the vat back on the new bike =(Putting a car through the company is worth it too - just make sure the co2 is low - e.g. a c350e or 330e
KumiSinghs said:
black-k1 said:
I've even had the VAT man (well, lady actually) come and look in my shed to see my company bike and my personal bike when my VAT return for the quarter I bought a new bike had them paying me rather than me paying them.
That's the s
t, seeing as I'm claiming 10% person usage i couldn't claim the vat back on the new bike =(Putting a car through the company is worth it too - just make sure the co2 is low - e.g. a c350e or 330e
CarsOrBikes said:
Sounds like it makes sense, I like the concept of 'fast response vehicle' or used for parts deliveries/collections which I might only be able to do at weekends from certain suppliers, why would it not work?
Sounds plausible - go for it. Occasionally I do weekend work on it. It's good to be friends with directors, so they can schedule various meetings on weekends =)Gassing Station | Biker Banter | Top of Page | What's New | My Stuff


