Cycle to Work Scheme - Self Employed

[Pickled Piper]

Has anyone that runs their own company utilised the above scheme.

I have a limited company so am effectively self employed like many contractors.

My thoughts are that my company buys the bike and equipment and then loans it to an employee (me).

Any problems with this approach?

Thanks in advance.

pp

[Eric Mc]

You are emphatically NOT self employed and the tax regulations and allowances applicable to your circumstances are quite different to a bona - fide sole trader.

As a director of your own limited company, you are normally personally liable to an Income Tax Bemefit in Kind charge when the company allows you to use a company owned asset.

However, you will be glad to learn that pedal cycles are normally exempted from such BIK rules.

So, your company could buy the bike and allow you to use it for both business and private journeys with no Income Tax charge arising.

What's more, the company can claim Capital Allowances on the bicycle and offset the running cocsts of the bicycle against profits, therby reducing its Corporation Tax liability.

Finally, as of 1 April 2008, small companies can claim 100% Capital Allowances on assets purchased up to a total spend in the year of £50,000 (motor cars excluded). So, your company can effectively write off the purchase cost of the bicycle against its profits.

[Pickled Piper]

Eric,

many thanks for the correction and clarification. I used the term self employed as in several cases when I have applied for financial services mortgages etc. I have been advised by the seller that I am to be treated as "self employed". I take your point and understand the distinction.

Thanks again.

I'm of to the bike shop.

pp

[Eric Mc]

On checking the legislation re. bikes it says that BIKs are not due on "most bikes". That implies that there mnight be a charge arising on some - but I wouldn't know what bikes are subject to BIKs and which ones aren't.

I would asssume that hugely expensive bicycles would be cvonsidered pushing the regulations a bit too far. I'm sure if you stick to a reasonably priced bike you would have no problems.

[bigandclever]

Linky

http://www.pistonheads.co.uk/gassing/topic.asp?h=0...

[Pickled Piper]

Thanks guys. That's made my day.

Eric, are there any other assets that the company could buy and I might "enjoy" without attracting additional income tax?

pp

[Eric Mc]

Child Care Vouchers.

One mobile phone (I think) but not two.

A company van with only "incidental" private useage.

[Pickled Piper]

Thanks.

pp

[Plotloss]

Eric Mc said:

A company van with only "incidental" private useage.

This 'incidental' private use.

Is there are hard and fast allowance or is it more down to the revenue bod reviewing at the time?

So if one was to say do in the region of 40K business miles PA would 10% more as private miles still be incidental, for instance or are we talking the very odd trip to the dump etc?