Re Claiming VAT on B2W bikes...

Headhuunter

....How do you do this? I asked the guy in accounts where I work and he didn't seem to have much idea but said that the original bill would have to be in the company's name for the company to be able to reclaim VAT, however I seem to remember that my original bill from Ribble Cycles was in my name... Will have to dig it out. Even if the receipt is uin my name though, of course under govt legislation, the bike is purchased and owned by the employer and leased to the employee...

In a further twist, my bike has now been passed on to Cycle Scheme who are now pestering me for a payment/deposit to extend the rental period, as per previous discussions on this site.

Is it still possible for me to reclaim the VAT even though the bike has been passed on to Cycle Scheme? How is this done if the original receipt was in my name?

sketchley

You don't, you are not VAT registered.

Your company purchased a cycle scheme voucher from Cycle Scheme on which Cycle Scheme would have charged VAT. You company would have and should have been able to claim the VAT back on it.

If you are think the VAT should be deducted before working out FMV and therefor should be cheaper you are part correct. Cycle Scheme will work out FMV on the value of the bike, they should do this without VAT. However, as they are a VAT registered company they will then have to charge you VAT on the FMV charge which in turn goes to HMRC. So it reality it makes not a blind bit of difference as 7% of the bike value including VAT is exactly the same figure as 7% of the bike value with out vat plus 20% of that 7%.

As for what you should do next as you are at end of hir period, see this link about what you should do now ref cycle scheme. Simply put pay a "deposit" of 3% of bike value is under £500 7% if over and extend hire period for another 3 years at no cost per month.

http://www.cyclescheme.co.uk/employers/ ... mrc-update

Headhuunter

Sketchley wrote:

You don't, you are not VAT registered.

Your company purchased a cycle scheme voucher from Cycle Scheme on which Cycle Scheme would have charged VAT. You company would have and should have been able to claim the VAT back on it.

If you are think the VAT should be deducted before working out FMV and therefor should be cheaper you are part correct. Cycle Scheme will work out FMV on the value of the bike, they should do this without VAT. However, as they are a VAT registered company they will then have to charge you VAT on the FMV charge which in turn goes to HMRC. So it reality it makes not a blind bit of difference as 7% of the bike value including VAT is exactly the same figure as 7% of the bike value with out vat plus 20% of that 7%.

As for what you should do next as you are at end of hir period, see this link about what you should do now ref cycle scheme. Simply put pay a "deposit" of 3% of bike value is under £500 7% if over and extend hire period for another 3 years at no cost per month.

http://www.cyclescheme.co.uk/employers/ ... mrc-update

Thanks, yes I know about the next stage etc re HMRC valuations/Cyclescheme etc, I'm specifically interested in how to get the VAT back if the receipt was issued in my name... Our accounts guy seems to think that if the receipt is in my name then the company can't claim the VAT back...?

rjsterry

I think he's right. Your employer can only offset VAT spent by the company - the receipt suggests that you spent the money, not the company. Ribble should be able to reissue the receipt with a different name on it (if you ask them nicely). How has your employer not got a record of the transaction anyway?

gadgets

did you company pay Ribble directly using the reciept issued to you name or did you send Ribble a voucher from either CycleScheme or Bike2Work Scheme ? If the latter, then your company would have made a payment on an invoice from either CycleScheme or Bike2Work Scheme which would have the VAT charged on the bike.

With my company, they applied the VAT reclaimed against the amount of the voucher paid and the net amount is what they reduced my gross salary over 12 months.

Headhuunter

gadgets wrote:

did you company pay Ribble directly using the reciept issued to you name or did you send Ribble a voucher from either CycleScheme or Bike2Work Scheme ? If the latter, then your company would have made a payment on an invoice from either CycleScheme or Bike2Work Scheme which would have the VAT charged on the bike.

With my company, they applied the VAT reclaimed against the amount of the voucher paid and the net amount is what they reduced my gross salary over 12 months.

Yes, I got the voucher and then sent it to Ribble and then Ribble sent the bike and other paraphernalia... So that means the company bought the bike even though the receipt is in my name? OK....

sketchley

Your company paid Cycle Scheme for the voucher. Cycle Scheme would have invoiced your company for one voucher + vat. Your company would have claimed this back as routine. Ask accounts to look for an invoice from Cycle Scheme not from Ribble. Your company did not make any transaction with Ribble.

Technically cycle scheme brought the bike from Ribble when they paid ribble for the voucher.

magoo289

Under C2W you are hiring the bike from your employer, the invoice must be in your employer's name. If it's in your name and/or you pay for the bike you cannot claim VAT or seek a tax reduction.

cee

something that may help is dependent on how purchases you make on behalf of your company are accounted.

So...

On occasion, I buy a equipment on my credit card on the companies behalf. It is owned by the company, but the receipt is in my name.

I then submit an expenses claim to the company, along with the receipt, who re-imburse me the outlay.

They can then claim back the VAT on the purchase that I made, even though the receipt is in my name....

Sounds similar to what you want to do, expect obviously, you don't have anything to be re-imbursed.....

ex-pat scot

also depends on whether your company makes vatable supplies and can reclaim its input vat.

For example, health, schools, insurance, banking, are not vatable supplies so cannot reclaim input vat and hence your B2W scheme won't be able to reclaim that element of tax.