C2W for the self-employed - what's allowable

[User6179]

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.

If you delivered to your customers you may be able claim but if you were say a hairdresser then i cant see a bike being a legitimate expense , you could say you need a bike to put out flyers in your local area .
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[User6179]

Home to place of work is your expense. The going to the bank etc would be business.
The benefit to an employee is nowhere near as clear as you might think. You pay for the bike over the hire period and still don't own it but are responsible for insuring it.

Would this be under traveling expenses ?

 

[User6179]

Which?

Your saying he can claim for travelling to and from work ?

 

[User6179]

No, I am saying he can't

Sorry I read your post wrong .

 

[CopperBrompton]

Talk to your accountant. There are various options. If you are earning more than 20k a year, a Limited company may make sense, in which case the company can offer the same benefits to its employee(s) as any other company, even if the only employee is you.

 

[sazzaa]

Another helpful post

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

Sorry but I have slight issues with people who go to such an effort to get things at a huge discount, it just makes me think they can't actually afford it in the first place and are living beyond their means? That and the fact you haven't just phoned your accountant and asked them the question, you're relying on a forum to tell you instead... Although saying all that, you're VAT registered so probably make a fair chunk of money...

 

[Cuchilo]

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

Nope . I think its a great idea especially for London . I also had to get rid of my perfectly fine van and buy a new one to reduce the emissions in London http://www.tfl.gov.uk/roadusers/lez/default.aspx . No tax breaks or cheap deals for me there but its for the good of the area I live in so hey ho .
I'm also self employed so understand the tax breaks you are aiming at but using a benefit system you are not entitled to is something im not a fan of . You should also be careful about claiming the VAT back on something that isn't a legitimate business expense . From what you have said on here it is quite clear you are not buying a bike for work but are intending to claim the tax back through your work .
Using your figures it seems you want the other tax payers ( me ) to pay more towards your new bike than you will be paying yourself .

 

[JamesM]

Sorry but I have slight issues with people who go to such an effort to get things at a huge discount, it just makes me think they can't actually afford it in the first place and are living beyond their means? That and the fact you haven't just phoned your accountant and asked them the question, you're relying on a forum to tell you instead... Although saying all that, you're VAT registered so probably make a fair chunk of money...

I have no problem with people getting discounts as big as they possibly can!

Do you have an accountant or do you do all that yourself?

 

[mr_cellophane]

Being VAT registered has nothing to do with the amount you turn over.

I am not quite in the same possition as I have my own Ltd. company. My company bought my bike on the basis that it is a pool bike and therefore available equally to all employees. Which is fine, because that's only me. I can use it to travel between home and temporary places of work or general business trips. I can claim any expenses associated with owning it i.e. insurance, inner tubes, servicing, locks, etc. However, I now can't claim the 20p per mile I used to so I had to work out whether 40 mile to London and back at 20p a mile was better than the amount I could claim by buying the bike as a company asset.

 

[Markymark]

My friend, ahem, who owns a business and the business bought the bike so it is just a simple expense which you can claim the VAT and offset against the profit. Obviously the business owns the bike and it is used for business purposes (deliveries, meeting clients etc) during business hours. My friend takes the bike home daily as he's worried it's not safe to leave at work . He also manages to claim all the other expenses (maintenance, lights, helmet etc etc).

 

[mr_cellophane]

He makes a profit !
Bad idea, he needs to get a new accountant, you pay tax on "profit".

 

[mr_cellophane]

Paid enough of that when I was PAYE only for it to be wasted by successive Governments.

 

[KneesUp]

Being VAT registered has nothing to do with the amount you turn over.

I am not quite in the same possition as I have my own Ltd. company. My company bought my bike on the basis that it is a pool bike and therefore available equally to all employees. Which is fine, because that's only me. I can use it to travel between home and temporary places of work or general business trips. I can claim any expenses associated with owning it i.e. insurance, inner tubes, servicing, locks, etc. However, I now can't claim the 20p per mile I used to so I had to work out whether 40 mile to London and back at 20p a mile was better than the amount I could claim by buying the bike as a company asset.

So I am penalised for having employees?

VAT is entirely to do with turnover - if you turnover more than £60k-ish (not sure on the exact figure now) you have to be VAT registered. What it has nothing to do with is profits. If I sell widgets for which the most people will pay is £100, and I sell 601 of them in a year, I have to pay 20% to the government. If my competitor sell 599 of them, he doesn't. I have a friend who has gone from having an office to working from home, and because of not having to pay rent and rates, he can make as much money on less turnover - which has taken him below the VAT level, so he now does a third of the worj and makes more money.

@Cuchilo - I am a tax-payer too, you know, and so are the people I employ I don't seem what's so wrong about finding out what the rules are about tax on bikes. I thought there were some exemptions to encourage bike use and I'm trying to find out about them.

 

[wilkotom]

You don't pay that VAT, your customers do.

While this might be strictly true, in order to compete with a non-VAT registered business, the VAT-registered one is going to have to charge less, by absorbing the cost of the VAT.

I recently had a bunch of quotes from various builders for some work done on my house. The VAT-registered ones had lower prices before VAT was factored in, at which point they were much of a muchness.

 

[wilkotom]

And in return the VAT registered business gets to reclaim the VAT on the input side which the non VAT registered doesn't.

...which is potentially significantly less. There's no input VAT on labour charges for example.