C2W for the self-employed - what's allowable

[KneesUp]

Not sure this is the right forum, but a C2W scheme thread popped up in new posts, which makes me think I might be able to get some advice.

I'm self-employed and personally VAT registered. As a self-employed person I believe I cannot get any C2W type benefits, but I can claim the tax back on any bike used primarily for commuting and can depreciate the bike to zero over three years.

So for example, if I bought a bike for £1000 I could claim:

VAT (20%) - £166.67
Income tax (20% of net value) - £139
Depreciation year 1 - 20% of £833/3 = £46
Depreciation year 2 - 20% of £833/3 = £46
Depreciation year 3 - 20% of £833/3 = £46

Which adds up to about £445 (with rounding errors throughout) in reduced tax and so on - making a £1000 bike cost £555 over three years. I'm not sure what the secondhand value of a three year old bike that was £1,000 would be, but I'd guess at at least £250, making the total cost about £300, or £2 a week, or much, much less than getting the bus and therefore something I could make a business case for to SWMBO.

Does that sound right? Have I made a big error somewhere?

 

[Paul99]

Can you not lease a bike and write the whole amount off as a business expense?

 

[sazzaa]

I would have thought the same as Paul99... Do you not have a bookkeeper or an accountant?

 

[400bhp]

Not sure you can legitimately offset against tax on an expense that is simply a means of getting to [your normal place of] work?

 

[User6179]

Not sure you can legitimately offset against tax on an expense that is simply a means of getting to [your normal place of] work?

I think as long as you have no fixed place of work like say your a joiner on building sites then i think you can claim for the bike and running costs but as you say I think if you have fixed place of work I dont think you can claim , also you dont need to be self employed to claim tax allowance for travelling if you have no fixed place of work .

 

[KneesUp]

I could lease it, but I'd then be paying a monthly lease fee and wouldn't actually own the bike. I'd be looking at £40/month to lease a Kona Jake, for example. I could claim tax back on that so in effect it'd be £33.33 per month, but that would still cost £1200 over three years.

I'd only really be saving the tax on the lease costs because being a sole trader means that me and the business are the same thing - it'd be my £1200 I'd be spending in leasing it.

I've got it in to my head that if you use the bike mainly for work, even if it's commuting, you can claim the tax back so as to encourage people to cycle.

 

[User6179]

I could lease it, but I'd then be paying a monthly lease fee and wouldn't actually own the bike. I'd be looking at £40/month to lease a Kona Jake, for example. I could claim tax back on that so in effect it'd be £33.33 per month, but that would still cost £1200 over three years.

I'd only really be saving the tax on the lease costs because being a sole trader means that me and the business are the same thing - it'd be my £1200 I'd be spending in leasing it.

I've got it in to my head that if you use the bike mainly for work, even if it's commuting, you can claim the tax back so as to encourage people to cycle.

Do you have a fixed place of work ?

 

[KneesUp]

Do you have a fixed place of work ?

Sadly, I do.

 

[User6179]

Sadly, I do.

Dont think you can claim under traveling expenses then .

 

[400bhp]

Business mileage though.

Or (if this works like it does with a car) claim for the capital cost of depreciation which I would have thought falls in lime with the HMRC sliding scale for c2W?

 

[Cuchilo]

You could just man up and go and buy a bike

 

[KneesUp]

You could just man up and go and buy a bike

Is that what you say to people who use the cycle to work scheme too?

 

[sazzaa]

If you can't afford it then don't buy it! Or buy something cheaper!

 

[KneesUp]

If you can't afford it then don't buy it! Or buy something cheaper!

Another helpful post

Working out how much it will cost is, surely, part of working out if I can afford it?

 

[KneesUp]

Will you be using it for non-commuting work stuff?

There isn't much of that really - customers come to me. I do go to the bank, post office and stationery shops though.

I sense I'm getting some stick (not from the quoted poster) about trying to establish exactly what benefits a self-employed person can get when buying a bike as it's much less clear than for an employed person. What is clear is that if I were employed I'd be able to get a tax rebate on a bike I used for commuting. I'm trying to establish if the same is true when I merely work 6 days a week in order to have the privilege of paying more in VAT and business rates than I earn for myself.

Apologies to those offended by that.