Cycle Scheme and the self employed

Brother in law is self employed and wants a new bike- is there a simple way to set himself up a cycle scheme?
Despite our best efforts he insists on paying tax and ni on nearly all his income so I'm assuming it will be worth his while?

I had a friend who tried to set it up for his 2 man business, I got the impressing from him that the people he was dealing with weren't interested. Can't be more specific on who it was, HMRC I guess, I could ask him. The company scheme where I worked took 18 months to set up!

You need to be an employee and earning enough that your deductions for the bike don't take you under minimum wage.

So the self-employed, or those who set up a company and make themselves an employee at minimum wage (and get the rest as dividends) will have to make some changes to do it.

Check out the HMRC website expenses and benefits A to Z, your BiL's company may be able to buy a bike + safety equipment and provide it free to the employees (i.e. himself) who then avoid paying tax, NI and VAT (if registered) on the value of the bike, which is essentially the same as the cycle scheme.

on a side note, what if you've just been taken on but your work aren't keen on forking out a grand for the new bike. as i have savings is there anyway that i can fund it through work instead of them funding it? i know that sounds backwards but i could pay all my rent for the bike in one go, i was just thinking it would help out. i'm a skinflint and the thought of not saving £400 pains me

You could "loan" your company enough to buy the bike, which they pay back to you interest free over the year. However you cannot pay everything back in one paypacket unless you are earning shedloads as you must reach minimum wage for the hours worked AFTER any deductions have been made

Why doesn't he just buy the bike and claim back the tax as a business expense? I'm sure his business needs a bike 🙂

You can buy company bikes under the terms of the scheme as long as they are used 50% for commuting. You can buy bikes to any value. The scheme cannot discriminate between employees, everyone must be entitled to the same deal. You are under no obligation to make any wage deductions in respect of the bike.

"Why doesn't he just buy the bike and claim back the tax as a business expense? I'm sure his business needs a bike"

We sell quite a few bikes that end up like this- owner of a cake shop, owner of a fish and chip shop, a guy working in "corporate intelligence" (whatever the hell that is) have all done it.

nbt – You could "loan" your company enough to buy the bike, which they pay back to you interest free over the year. However you cannot pay everything back in one paypacket unless you are earning shedloads as you must reach minimum wage for the hours worked AFTER any deductions have been made

Riiiiight, i think that makes sense.

I'm only there for 9 months, shops are clearing out 09 stock and VAT goes back up soon (I think) so I want to get everything sorted asap to take advantage of it all

thanks

as i have savings is there anyway that i can fund it through work instead of them funding it?

Surely that's a question for your accounts or payroll department? But I doubt they'd be interested unless you work for a really small firm.

I run my own business, but take dividends rather than a salary so had to make do with just reclaiming 17.5% VAT on the company bike.

At least I think I did, the accountant is visiting soon and will tell me if I can write off part of the value against tax as well.

chakaping – Surely that's a question for your accounts or payroll department? But I doubt they'd be interested unless you work for a really small firm.

10 people small enough?

I'm just fleshing out ideas before going and asking them.

Sorry podge I have no idea, my knowledge extends to having used the scheme a few times and knowing what a pain companies can regard it as.

well forearmed is forewarned or whatever they say.

now i know about the not in one pay packet thing i can look into it other ways

cheers guys

Chapaking you can write it all off as an expense as long as you are prepared to offer the same opportunity to any of your employees who might be interested.

OK, so i have another question.

I've been off work since march so i've not paid any tax. will i get any real benefits from this scheme as I'll only earn a relatively small amount