1200gs tax deductable?
- Thread starter APB
- Start date
Anyone use a bike as a company vehicle?
Wondering about a new gs, I want to put it through as a business vehicle so anyone had experience of which loan,HP, lease, works best.
There was a long thread on this some time last year, but the simple answer is to ask your accountant to do the sums based on your mileage estimates.
A lease often looks attractive and is tax efficient, but bear in mind you will be paying penalties at the end for any damage beyond normal wear and tear, which can get expensive, and you won't own the bike at the end either.
I use my GS for business and claim mileage, same as I do for the car. It is a lot less hassle that way, even if not necessarily the cheapest option.
Same as Owen, I charge mileage for a car and bike. According to my accountant, it`s the easiest way
I'm partly paye, and part self employed. Have put bike mileage through accounts for years on advice from bean counter.
Forgotten now whether technically its a different rate for cars and bikes, worth checking.
Good luck with new venture, anything that might interest us GSers?
Forgotten now whether technically its a different rate for cars and bikes, worth checking.
Good luck with new venture, anything that might interest us GSers?
Rong
Registered user
robnobrakes
Guest
I have been paying for my bikes through the business (sole trader) for years. If you are VAT registered you can also claim the VAT back. When you sell, the VAT element of the sale price must be paid back.
ajtuk
Guest
I had a tax investigation a few years ago, one of the things they focussed on was my company bike, in a nutshell you get a benefit in kind charge based on the total value of the bike which you have to declare on your P11d , with regard to the VAT its a grey area, ive had conflicting advice form the HMRC about whether you can claim the VAT on the purchase of the bike , the central VAT office said no based on the fact that it wasnt solely for business use but the VAT inspector said it was ok when he visited.
Optimus_1200
Guest
Company bike
Under the PPE regulations 1992 if the bike is being provided by the company & you are "required" to use it for work I think all your protective clothing, gloves, highviz & boots can be supplied by the company to you at no cost to you (& the company is not allowed to charge for it) & is therefore not a tax benefit either. The company would also then reclaim the VAT on the purchase. It doesn't include helmets as they are a legal requirement.
http://www.hse.gov.uk/pubns/indg174.pdf
NB The maximum you can claim for company mileage on a bike without it being a tax benefit is £0.24/mile vs £0.40 mile for a car. Even if you're doing high company mileage it's hard to make the bike pay for itself. I find fuel cost at £0.95/litre equates to about £0.80/mile
Cost to company= Sum of leasing/financing costs+depreciation+servicing costs+tax+cost paid for company mileage/fuel - although if you own the business this will reduce the company's profit & therefore its liability with regard to company taxation & VAT can be recovered in certain areas. If the bike is bought outright by the company (bad for cash flow) it can be depreciated as a capital asset which may also improve tax position
Cost to individual=Tax benefit of having the bike supplied (assuming it is not a pool bike / is exclusively for work use)+value of personal fuel
That's my opinion, this is not professional advice & no liability or responsibility of any kind is accepted, please consult a professional adviser etc etc.
Under the PPE regulations 1992 if the bike is being provided by the company & you are "required" to use it for work I think all your protective clothing, gloves, highviz & boots can be supplied by the company to you at no cost to you (& the company is not allowed to charge for it) & is therefore not a tax benefit either. The company would also then reclaim the VAT on the purchase. It doesn't include helmets as they are a legal requirement.
http://www.hse.gov.uk/pubns/indg174.pdf
NB The maximum you can claim for company mileage on a bike without it being a tax benefit is £0.24/mile vs £0.40 mile for a car. Even if you're doing high company mileage it's hard to make the bike pay for itself. I find fuel cost at £0.95/litre equates to about £0.80/mile
Cost to company= Sum of leasing/financing costs+depreciation+servicing costs+tax+cost paid for company mileage/fuel - although if you own the business this will reduce the company's profit & therefore its liability with regard to company taxation & VAT can be recovered in certain areas. If the bike is bought outright by the company (bad for cash flow) it can be depreciated as a capital asset which may also improve tax position
Cost to individual=Tax benefit of having the bike supplied (assuming it is not a pool bike / is exclusively for work use)+value of personal fuel
That's my opinion, this is not professional advice & no liability or responsibility of any kind is accepted, please consult a professional adviser etc etc.
Brill,
Thanks for the replies blokes, it has been useful.
It's a huge minefield even the tax office seem to confirm grey areas.
I was also told that many inspectors are on commission so if you do not know the sytem inside out they could and would try to over charge you!!!
Forgive me if this is incorrect all you tax inspectors out there!!!!!!!!!!!!!!
Thanks for the replies blokes, it has been useful.
It's a huge minefield even the tax office seem to confirm grey areas.
I was also told that many inspectors are on commission so if you do not know the sytem inside out they could and would try to over charge you!!!
Forgive me if this is incorrect all you tax inspectors out there!!!!!!!!!!!!!!
bsogri
Registered user
tax deductable
if i use my bike for bike tours how do i stand, tax , vat etc
if i use my bike for bike tours how do i stand, tax , vat etc
keep it only for business
I spent ages researching this and came to the following conclusion. If you are going to use the bike partly for social riding then simply claim the mileage allowance. It works out about the same as putting everything through the business.
If you can keep the bike only for business use, which is what I do, then I reckon its worth it because I claimed back the VAT and anything else I buy for the bike. I keep a mileage log which shows all trips and having petrol receipts for that day can backup your claim that you went somewhere on that day.
So far my accountant is happy with this because there is no P11D work to do and hopefully I won't have any problem with HMRC
Just my thoughts as I am no expert
Now of course if you are an MP there are bound to be rules that all of us bound by HMRC rules don't have to adher to!
I spent ages researching this and came to the following conclusion. If you are going to use the bike partly for social riding then simply claim the mileage allowance. It works out about the same as putting everything through the business.
If you can keep the bike only for business use, which is what I do, then I reckon its worth it because I claimed back the VAT and anything else I buy for the bike. I keep a mileage log which shows all trips and having petrol receipts for that day can backup your claim that you went somewhere on that day.
So far my accountant is happy with this because there is no P11D work to do and hopefully I won't have any problem with HMRC
Just my thoughts as I am no expert
Now of course if you are an MP there are bound to be rules that all of us bound by HMRC rules don't have to adher to!
£0.08 I presume?
Central VAT Office was wrong. VAT can be reclaimed as long as there is some business use. If it is only for personal use, then that would indeed be seen as taking the urine.
However output tax has to be accounted for on the private use element each quarter unless you are on the Flat Rate Scheme (where it is deemed to be already accounted for!).
VAT has to be fully accounted for on sale as mentioned above.
In effect the net result is that you recover VATon the proportion of the depreciation and running costs that relate to business use.
The above is only a brief summary, etc.
Interesting tax break in the budget in that motorcycles can qualify for the Annual Investment Allowance of 100% in the year of acquisition. But personal use, whether you operate as a company or sole trader, etc, need to be taken into account. So take advice from an accountant who knows what they are talking about (many don't have much knowledge about motorcycles).
cafemaestro
Registered user
I am the MD of the family business. My GS belongs to the company and is provided to me as a benefit. According to my accountants (PKF) it is treated as an "asset placed at the disposal of an employee" in my P11d. This means you pay tax on 25% of the asset value (i.e. the purchase price +accessories). As i am a 40% tax payer, it is much cheaper for me to have company motorbike rather than a car and I just run a private car (unless of course I want a flash motor - but then why would I when I have a top motorbike?).
With regard to VAT - as the bike will not be used exclusively for company business, then VAT is not reclaimable.
Finally the top benefit : all fuel regardless of use can be reclaimed through expenses and is not regarded as a benefit in kind as it would be for a car.
Therefore you get all fuel paid for, you can reclaim the cost of safety equipment if using it for business and you don't pay for the servicing and repairs. The comapny can of course reclaim VAT on all of these running costs.
My advice: take advice, but this is one of the few doors that let us enjoy ourselves that the taxman has not yet bolted shut. Enjoy it
With regard to VAT - as the bike will not be used exclusively for company business, then VAT is not reclaimable.
Finally the top benefit : all fuel regardless of use can be reclaimed through expenses and is not regarded as a benefit in kind as it would be for a car.
Therefore you get all fuel paid for, you can reclaim the cost of safety equipment if using it for business and you don't pay for the servicing and repairs. The comapny can of course reclaim VAT on all of these running costs.
My advice: take advice, but this is one of the few doors that let us enjoy ourselves that the taxman has not yet bolted shut. Enjoy it
I think it should be 20%.
It is not a car (if it was I would agree with PKF's assessment). It is treated the same as any normal asset purchase and VAT IS reclaimable. (The business is VAT registered, the motorcycle is not bought privately or on the secondhand margin scheme, etc.) The private use element does need to be dealt with however.
As an employee, you should be taxed on the asset as above and the private use element of any running costs. So if there is 20% private use, 20% of the fuel,etc. should be assessed to tax.
Good advice. This advice may also vary if you are the owner of the company as well as an employee (due to Class 1A NI, etc).
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