Can my business pay for my bicycle? 🚴‍♂️

Feeling inspired by le Tour de France? As a business owner, can the Cycle to Work Scheme work for you?

To use the scheme, you must:

• Have your employer/own company sign up with a scheme provider - some listed here: Cycle to Work Scheme | Tax Free Cycling | Evans Cycles

• Commute on your bicycle at least 50% of the time

• Be paid via your employer's PAYE payroll (ruling out Self-Employed Sole-Traders or Partnerships)

• Have payroll earnings (not dividends) exceeding the National Minimum Wage + the Salary Sacrifice you'll make as part of using the Cycle-to-Work Scheme

Sadly, the costs of admin and increased payroll taxes outweigh the benefits for small owner-managed businesses.

FORGET THE SCHEME - LET'S GET REAL

If your bicycle will be used for work (including your commute), then there are a couple of routes for tax relief that you might like to explore with your accountant.

1. Using your bicycle mainly for work (and occasionally for leisure)

Your company could buy your bicycle + safety equipment and claim corporation tax relief + input VAT. A higher saving than the Cycle-to-Work Scheme with much less trouble 👍

2. Using your bicycle occasionally for work (mostly for leisure)

Record your business mileage (much like claiming for motoring expenses) and claim 20p per mile against your business profits (not bad compared to the 45p per mile rate for cars).

Source info: https://www.gov.uk/government/publications/cycle-to-work-scheme-implementation-guidance

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