cyclescheme - OK for one man band businesses?

omarm

I just saw a link for cyclescheme
Sounds great

I think I'll ask my employer about it...
Erm... I run my own business... one man band

Can I still take advantage?
Is there a cost to the employer?
Can you take advantage as 'self employed, as opposed to being a 'business'?

I do use my bike to ride to my office.

Thanks.

davis

I think the general theory is that it's not really worth it, but it can be done. It's not really all that useful for employed individuals now as it's not such a tax break and the company still own the bike.

I believe the more usual route was to buy it through the company as an asset for staff use... but this is where accountants come in!

fenix

From here : http://www.bikehub.co.uk/featured-artic ... rk-scheme/

if you don’t have a PAYE salary, you can’t take part in a Cycle To Work salary sacrifice scheme. The only bike saving for a self-employed person would be to buy a bike via the business and reclaim the VAT, if VAT registered that is.

jds_1981

omarm wrote:

I just saw a link for cyclescheme
Sounds great

I think I'll ask my employer about it...
Erm... I run my own business... one man band

Can I still take advantage?
Is there a cost to the employer?
Can you take advantage as 'self employed, as opposed to being a 'business'?

I do use my bike to ride to my office.

Thanks.

Easier to expense your mileage (allowing for 2 year rule if this might affect you)
20p/mile. If you do about 100 miles a week i think the tax saving would be similar.

pblakeney

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The Rookie

If you pay income tax then you can set up your own cycle to work scheme within the company (or use the scheme to increase the amount of income you can take without paying tax) to take advantage of the tax break. Leave the bike as company property until it has no value and then give it to yourself. My brother in law did just that.

And the company can pay you the mileage rate on a cycle to work bike (for genuine business use only obviously) for further tax saving.

Pufftmw

Just buy the bike as a company asset and write it off over 3 years or so? It comes off the top line, so can be used to reduce corporation tax plus if you're VAT reg, you can get that back too. I sold my commuter to my company when I started and I put all its maintenance through the company too - so it currently is due new chain/sprockets, discs/pads and the seat is shot, so will get the company to pay for it. Legitimate business use as when I go into town, I use that whereas I am otherwise based at home. Bike is only used for business.

It works out that inc VAT/corporation tax/dividend tax that if you bought something with the company pretax for £120, the company would have to earn roughly £200 to get the equivalent post taxes to you. (Roughly that, don't hold me to exact figures!)

bigmonka

The Rookie wrote:

And the company can pay you the mileage rate on a cycle to work bike (for genuine business use only obviously) for further tax saving.

Are you sure about that, we were told at work that we couldn't claim mileage when riding a cycle-to-work bike as the bike is owned by the company so as the mileage rate includes an allowance for wear-and-tear it can't be given to the employee.

The Rookie

There is no restriction on claiming for cycling, the government recognises the permitted rate (noting that even though a C2W bike is owned by the company the maintenance for wear and tear falls in the employee, so any cost incurred through the use doesn't fall on the company) is above the cost but they permit the higher rate to incentivise green travel. Ask your company to show where it says you can't. Of course it could just be an excuse for them not to pay you but they should be honest about it.

I get a 'company car allowance' (in reality a small amount of extra salary) so the company only pay me company car mileage rates (I'm not going into the complete BS that that is), I get a better rate on the bike than I do in my car!