[Closed] Self-employed/freelance/contractor types - Cycle To Work through Ltd Co?

Perfectly feasible, no need to use any scheme just buy the bike in the company and provide it to yourself as an untaxable Benefit in kind, no need for any loan (so no limit due to Consumer Credit issues), no need for salary sacrifice so you can reclaim the VAT. Journeys between workplaces are a qualifying use. Taxable benefit could arise when and if you transfer the bike to yourself.

Presume there are no other employees who would have to be offered equivalent deals.

Do you work at your place of residence or a separate office?

If the former, not really a go-er. If the latter, see mefty comment above.

Another option is for your company to buy a "company bike" available for the use of all employees for work-related journeys. This can then have VAT reclaimed and be written off against profit (at a certain amount each year).

Your accountant can advise you further.

Ah, okay, that's useful. I'm on the flat-rate VAT scheme, but I know that I can claim VAT back for some things, is this one of them?

And I'd use the bike for part of the journey, and my (private) car for the rest. Can I continue to claim mileage for the car portion?

And does it become a taxable BIK if I use it for personal use too (like a car would)?

Sorry, lots of questions, I do have an accountant so I suppose I should just ask him...

EDIT - sorry, was typing as cha****ng replied

buy the bike in the company and provide it to yourself as an untaxable Benefit in kind

Wait, what, I can do that?! 😯

*phones accountant*

Flat rate VAT - no idea.

As long as the main use is for qualifying journeys (i.e. to client's premises) then you are fine and can still claim for car on the basis that you do.

Personal use - can only disqualify if leads to main use not being for qualifying journeys - no apportionment.

Mrs S is an accountant and when we looked into it, it made no sense for us. Instead I get 25p per mile expenses (I think) for work mileage on my bike.

Wait, what, I can do that?!

Yes, everyone assumes that it has to be implemented as cyclescheme has designed it. That is just the way one commercial organisation has decided to offer its services - it is not the law.

The law is simply if you supply a bike to your employees and the main use of those bikes is for qualifying journeys, no taxable benefit will arise. Nothing more, nothing less.

Mrs S is an accountant and when we looked into it, it made no sense for us. Instead I get 25p per mile expenses (I think) for work mileage on my bike.

Depends on cost of bike versus mileage.

Comparison is:

VAT reclaim, value of capital allowances less any tax cost on transfer versus mileage times rate.

I can claim VAT back for some things, is this one of them?

AIUI if it's over £2k, yes. I'm not an accountant, though 🙂

Just had a quick look at the HMRC site for claiming VAT back on capital assets when on the flat-rate VAT scheme. Basically, a bike looks like it would qualify, but only if it cost more than £2k. That's a lot for a commuter...

However, I assume that even if it was under £2k, it would reduce the profits and therefore the Corporation Tax liability?

any tax cost

given that this is a variable too dependant on the company, its not just the bike cost (& vat and allowances enusing etc) and mileage that are variables.

So, assuming a bike worth £1200 (inc VAT), riding 100 miles per week to and from client's office, would it be worth it?

given that this is a variable too dependant on the company, its not just the bike cost (& vat and allowances enusing etc) and mileage that are variables.

If you want to overcomplicate things with relative discount rates, it does not, most individual companies will be paying tax so it is pretty simple.

EDIT: VAT and capital allowances are a function of bike cost so that is the only driver that you can effect.

+1 Just buy the bike and expense to the company (or LBS for a company cheque/cc).

You don't need to actually use it for company business - and even if you do, who knows that you've not driven :wink:, so charge 45ppm.

tbh My Accountant didn't care, as its legal.

So, assuming a bike worth £1200 (inc VAT), riding 100 miles per week to and from client's office, would it be worth it?

No - if you can claim 25p per mile as that is £25 per week which is £1,150 a year assuming 46 weeks work. Vat will be £200, write off for CT about £200.

EDIT: It is only 20p per mile so £920, conclusion still correct.

Ta.

Might stop paying my accountant, I get all the amswers here 🙂

Just make sure you claim the mileage, analysing things is easy, implementing them is where most people screw up by forgetting to claim things etc.

Make sure you check with your accountant IHN, your particular circumstances will probably make one approach better in the eyes of the HMRC.

your particular circumstances will probably make one approach better in the eyes of the HMRC.

He is hardly at the forefront of the tax avoidance industry, all this stuff can be derived from the HMRC website. All HMRC do is administer the law, badly in most cases.

+1 Just buy the bike and expense to the company (or LBS for a company cheque/cc).

You don't need to actually use it for company business

Well the primary use of the bike does need to be for qualifying journeys, otherwise the provision of the bike would be considered a taxable benefit.

and even if you do, who knows that you've not driven :wink:, so charge 45ppm.

You could do that, but it's straightforward tax evasion.