Motorcycles and VAT

[Detox]

Hi,

Anybody else run their GS as a company vehicle? Have you worked out a quick and easy way of working out what VAT to reclaim on bike related purchases, petrol, servicing etc.

I have been told you can claim the VAT element of petrol purchased for business related travel. Also you can claim all the VAT on the purchase of a new bike but have to make an allowance for personal use.

Any advice (sensible) appreciated

Cheers,

Andy

 

[PeterNicholson]

Anybody else run their GS as a company vehicle?

Used to, in previous job.

IIRC, all VAT is reclaimable, less allowance for private use.

Tax-wise, you pay tax and NI on the asset value of the bike (not the new price), multiplied by your private mileage, divided by your compny mileage. You DO need to keep mileage records!

With the VAT thing, the company accountants dealt with that, so I didn't have that much to do with it.

Now claiming mileage for works mileage - much simpler, although it does mean I carry more of the risk...

 

[adamski49]

Andy

I'm self employed and use my bike as the company vehicle. This is my understading of it and my accountant is happy with my books.

- The VAT can be claimed back in proportion to business use, i.e. 50% business use would mean 50% of the total VAT (you probably figured that out on your own).

- All VAT can be claimed back on maintenance (servicing, tyres etc) and I've taken that to include luggage required for business meetings and even an ohlins rear shock.

- All VAT can be claimed back on business use petrol. If you're self employed it's easier to just take the business use petrol from the company and use your own money for personal use, saves a lot of complicated tax calculations at the end of the year.

If you are employed by or have your own limited company I would expect all VAT to be applicable and you are then taxed accordingly via your personal tax. You also have to apply a specific amount each month against your VAT return for petrol regardless of mileage. one of the many reasons I'm not tempted to go limited yet.

HTH

Adam

 

[Stoney]

I am new to all this business stuff. i set my own VAT registered limited company in january and run a f6550gs on the company.

I can claim the entire cost of the vehicle and all the VAT regardless of what proportion is business use.

I pay for all my fuel through the business but only claim my business proprtion of the VAT (i.e. 50%).

Not got to year end yet but recall something along the lines of paying tax on personal benefit of the fuel.

 

[Jimb]

If you have your bike as a company pool vehicle and keep it at the company reg address ( your House ) and its available for any company employee ( You) then you can claim all the VAT and all the running costs and pay no personal tax on it.
Of course every journey is a business journey since if you work from home then a journey into an office every day is claimable.

 

[adamski49]

But as I understand it you aren't allowed to use pool vehicles for personal use and all mileage would have to be recorded as business use... think of the interest on the back dated tax and VAT when that fateful inspection day arrives. Unless of coures you only ever use the bike for business use.... yeah, right.

Adam

 

[Paul Wakefield]

Jim - That doesn't work for a number of reasons. Apart from anything else , a pooled car has to be used by more than one employee and not ordinarily used by one person. Also it only applies to cars.

For self-employed, technically all VAT can be recovered but VAT has to be paid over on any private use. So you can take all the relevant expenses and multiply the VAT reclaimed by the private proportion to get the amount of VAT to pay over. Don't forget you also have to pay VAT when you sell the bike.

PS You can only reclaim VAT on a new bike not a second hand one.

PPS The rules are different for bikes compared with cars

Paul

 

[Detox]

Thanks

Thanks for all the useful information guys. I don’t think I have fallen foul of any VAT regulations, though I may double check with my local VAT office (that could be inviting an inspection though .

Cheers,

Andy

 

[Stoney]

You'll get an inspection at some point in VNF anyway

 

[CoolCarbon]

It's a Plant.....

My local Small Business advisor from the IR told me that the Bike would be classed as Plant. Totally different from a Car.

Sounded good to me at the time anyway

CC