self employed

[nosherduke996]

Hi all, does anybody know how a self employed person can use the cycle to work scheme.I have tried citz advice and they can,t even give a answer.

 

[Llama]

see:

"EXCLUSIONS
Employees of charities, universities, the armed forces and many parts of the NHS are usually denied a VAT saving.
Plus, 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."

from http://www.bikeforall.net/content/cycle_to_work_scheme.php

and http://www.guardian.co.uk/money/2006/dec/09/consumernews.moneysupplement

 

[TwickenhamCyclist]

You can do more than claim the vat I think. If you use the bike wholly and exclusively for your business can’t you put it in your capital pool?? Ie offset the whole cost of it rather than just the vat??? Or at least claim the business mileage on a bike (20p / 25p per mile iirc?)

 

[mattybain]

You can do more than claim the vat I think. If you use the bike wholly and exclusively for your business can’t you put it in your capital pool?? Ie offset the whole cost of it rather than just the vat??? Or at least claim the business mileage on a bike (20p / 25p per mile iirc?)

It's got to be exclusive though so 100% used for the business, so no sneaking to the shops or going on training rides.

 

[XmisterIS]

It's got to be exclusive though so 100% used for the business, so no sneaking to the shops or going on training rides.

How are they going to know? Unless they send the HMRC Gestapo to steak you out ... which is highly unlikely for the want of one little bicycle, I would have thought!

 

[mattybain]

How are they going to know? Unless they send the HMRC Gestapo to steak you out ... which is highly unlikely for the want of one little bicycle, I would have thought!

Is that a risk that you would take? if I was an inland revenue inspector then the claming of a road bike for a typical self employed business would raise the alarm bells and warrant further investigation.

And remember the Inland Revenue are like the Gestapo!!

 

[Davidc]

I've enquired about this. The advice I've been given is that as I can't often use the bike for work VAT would have to be apportioned and so would the cost and depreciation.

Clearly if you can use it a lot the answer would be different.

What I can (and do) do is pay myself for using the bike for work. I think the accountant put a figure of 40p a mile on it - but I can't find the paperwork at present. There's a HMRC figure for the maximum, and unlike many employers you can set your rate at the maximum.

I'm seriously considering getting a trailer for work use, then things might change. For a start the trailer would be a business asset, and then the bike with the towing bracket would have to be reconsidered.

 

[Bigtwin]

Yup - this is a non starter.

Spoke to my accountant about capital assets and exclusive use. His advice was don't bother, they will never believe you.

 

[wafflycat]

Acquaintance of mine uses her bike for business mileage - travelling between one office and another. She rang the tax people and they said that if she kept a record of her journeys, she could claim tax relief on the mileage. They even told her the rate per mile, which made it worthwhile, but I can't remember what the figure was - and it was a few years ago now.

 

[Davidc]

You can indeed claim the milage and it was 24p per mile last year (fiscal) may have changed now though.

Yes that's more like it. The 40p was the car.

 

[thomas]

Acquaintance of mine uses her bike for business mileage - travelling between one office and another. She rang the tax people and they said that if she kept a record of her journeys, she could claim tax relief on the mileage. They even told her the rate per mile, which made it worthwhile, but I can't remember what the figure was - and it was a few years ago now.

You can indeed claim the milage and it was 24p per mile last year (fiscal) may have changed now though.

Sorry if I sound stupid, but do you get paid 24p per mile (or whatever) for journeys made for the business (such as going to a local business for a meeting) or could I get paid this just for cycling to work in the morning?

Is there anyway, without my boss having to pay me more, for me to get this 24p a mile just for turning up to work? It may not sound like much, but it'd be another 6 quid a day, though I guess I can't.

 

[Davidc]

Sorry if I sound stupid, but do you get paid 24p per mile (or whatever) for journeys made for the business (such as going to a local business for a meeting) or could I get paid this just for cycling to work in the morning?

Is there anyway, without my boss having to pay me more, for me to get this 24p a mile just for turning up to work? It may not sound like much, but it'd be another 6 quid a day, though I guess I can't.

With apologies to any accountants on here.....

No.

Assuming you're employed, then allowance for cycled mileage is the same mechanism as for car mileage (if the car isn't run as a company car). Your employer sets the rate, anything they like (or negotiate) up to the HMRC maximum, and you claim it from them. Its a business expense for your employer.

If you're self employed then you pay it to yourself and it goes in the books as a business expense, in the same way as you do for car business mileage (if the car isn't run as a company car). The big difference is that it's in your own interests to pay yourself mileage at the maximum rate.

In both cases you aren't generally allowed to claim for mileage to and from a permanent place of work, whether on a bike or in a car.

 

[TwickenhamCyclist]

Ok – thought about this a bit more – if you’re a self employed cycle courier then you can defiantly claim for the cost of purchase.
But if you’re not, what about if you already own a bike for leisure/usual trips to and from the work place and purchase an additional bike (say one that doesn’t get oil on your trousers or has a basket for your laptop etc) that you exclusively use for business trips. I’m sure you could get that one past!

Thomas – re the 24p thing –you're not stupid - over-simple explanation below!!

If you are self- employed you can claim back certain expenses to do with conducting your business.
For example, if I had a days freelance work at the Park Lane Hilton, I could cycle the 20 mile round trip from home or drive it.
Say my rate was £400 + travel for the day and I cycled – I would invoice the client £404.80 – (£400 plus 20 x 26ppm for travel)
When I add up all my invoices for the year the £404.80 would be included in my earnings, but I would be allowed to “claim back” the £4.80 as a travel cost, thus effectively earning (and paying tax on) just the £400. Might seem like a small amount, but they all add up over a year, and if you drive, the cost would be a lot more as I would charge 40ppm (£8), C Charge (£8) and Parking (£40)!


You cannot claim this for your usual route from home to usual place of work, only for additional business trips. So sorry, but it’s a double no for you my friend as I guess you are not freelance / self employed and if it’s for a journey from home to your usual place of work it doesn’t count either!!