Thinking of getting my next bike using the cycle to work scheme. As the company I run is just the wife and I, I was thinking of letting the company buy the bike and claim the vat and use the capital allowance to reduce the company tax bill.

I know £1000 is the limit when you use salary sacrifice (well unless you paid for a credit license and thats not worth it for one bike) but is there a limit if the bikes ownership is retained by the company?

Cheers,

JB

Any idea?

This doesn’t really have any relevance to the cycle to work scheme.

It does.

If you go on the Department of Transport web site for Cycle to Work it gives the above as an option but doesn’t mention any maximum value.

It does.

So it does 🙂

It appears the £1000 limit will still apply unless you get a consumer credit license.

But the credit license is only need where you do a salary sacrifice – because that is a type of HP agreement.

What I’m looking at doing is having my company buy the bike and then claim back the VAT and knock the price off the company profits.

It is not quite as good as the PAYE route but a lot simpler and as my Yeti cost well over £1000 I want to know if the limit applies.

you want to claim the vat back on a bike because it’s part of your business to ride a bicycle?

Instead of Cycle to Work where the individual ends up owning the bike it is equally possible for the company to retain ownership and the bike is treated like any other bit of office equipment. The bike is then available to be used for office use. I use a bike to see clients and generally get about town.

As I own the company and there is only two of us here there is no real difference between me owning the bike or the company doing so. The nature of the company makes no difference but we are a sustainability consultancy.

What I am interesting in is knowing what the maximum value (if any) would be.

Surely if your accountant is prepared to put it down as a legit business expense, you’ll get relief on it, but only on its depreciation, as you’re free to sell it on. Otherwise, if you paid £2000 for it, got 40% relief, then sold it for £1000 2 years on – you’d owe IR on the £1000, but people wouldn’t declare that would they?

The thing is this is not creative accountancy. The Dept of Transport has this as an equal method to Cycle to Work.

Many of my clients seem to think that their directors ‘need’ 5 series BWM’s for status etc. We ‘need’ our directors (well me) to ride Yeti’s.

Well it is creative accountancy, as you don’t need it for work, and won’t cycle to work on it. Don’t blame you for trying though, I’d do the same.

🙂