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Should I buy bike a through the company or not. Too confused :(

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    Should I buy bike a through the company or not. Too confused :(

    Hi,
    Hoping someone can help. I currently ommute to my clients office 3 days/week on the tram. Have now moed house and looking into getting a bike and cycling to clients office along the canal etc. Been looking into the main ways to efficiently do this and the two main options seem to be (1) MyCo paying for the bike and then lending it out to employees for their use or (2) I buy the bike myself and then claim back expenses at 20p/ mile.

    There are loads of people asking similar questions across the net but seems people cannot agree on the right answer. One person on this forum stated:
    --------
    It says: "Payments of up to 20p per mile may be made for business travel on an employee's own bicycle"

    wtf does that mean anyway - up to 20p - is it up to the employer to set the mileage rate - so for us it's automatically 20p?

    Now, let me get this straight. Buy a bike and all the gears (helmet, lights etc). Let's go cheap and say it costs £200 all up.

    1st option - the business buys this and lends it to me. This, therefore, reduces company profit by £200 and saving approx £40 in tax to pay.

    2nd option - I buy all this personally and use to get to my place of work and home. Let's say my generous employer allows me to claim 20p. I bike to work, 10 miles, I bike home, 10 miles. 20 miles = £4. Over a week that's £20. Now, how does it all work from here? Does the £20 a week come from the company (so reduces profit by £20 and saves £4 corp tax) and then paid to me. This £20 I get in my bank is then not liable for any further tax/NI.

    Option 2 sounds like a pretty good deal at the moment but have I missed something key here? After only 2 weeks I am better off than option 1. There's a few hundred quid coming my way me thinks

    And then there's the cycle to work day lunch to consider too! More info on this please.
    ---------

    Can anyone shed any light on what is the best, most tax efficient, money saving way of doing this as I now have a bike in mind (costs £1500 approx) and want to buy it so I can start commuting to work on it from next week.
    Oh, and although I will use it sometimes for personal use, the lions share will be business use.

    Thanks for any help you clever people can give me


    #2
    Can anyone shed any light on what is the best, most tax efficient, money saving way of doing this
    Your accountant?
    Last edited by northernladuk; 17 August 2019, 21:43.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      You might want to try cycling before buying a bke. Tram means you are in a city and cycling during rush hour can be a very nasty experience.

      Personally I claimed 20p a mile. I made very sure it only corresponded to billing days when I was not WFH which was quite a bit of admin but I wanted to make sure I was fully within the rules. Neither my accountant not HMRC ever objected.

      Comment


        #4
        I'd say simply have the company buy the bike for you to use. Straight forward purchase, no need for salary sacrifice or buying it personally out of taxed income.
        Last edited by Craig@Clarity; 18 August 2019, 07:54. Reason: Typo

        Comment


          #5
          Company buys the bike. Provided it is available for use by all employees there is no BIK to pay.

          The company can pay for safety equipment such as helmets, hi-viz jacket, lights etc, but not clothing or other items specific to the individuals using them.

          EIM21664 - Employment Income Manual - HMRC internal manual - GOV.UK
          "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

          Comment


            #6
            Originally posted by Craig@Clarity View Post
            I'd say simply have the company buy the bike for you to use. Straight forward purchase, no need for salary sacrifice or buying it personally out of taxed income.
            This is what I did. It's a folder only used for company business so no issues with BIK.
            ...my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...

            Comment


              #7
              From a purely financial perspective:
              - if you'll be doing lots of business miles on what you're happy will be a cheap bike, buying personally and claiming the mileage will likely work out better.
              - if you won't be doing many business miles and want quite a fancy bike, then getting the company to buy it and "lend" it to you tends to work out better. Just be aware it's the company's bike, relevant if you want to sell it on.

              Comment


                #8
                I did Option 3: Didn't bother with any of that for marginal savings on £200 bike and just bought it personally and don't bother claiming 40p/day

                There are bigger fishes to fry...

                Comment


                  #9
                  Originally posted by sal View Post
                  I did Option 3: Didn't bother with any of that for marginal savings on £200 bike and just bought it personally and don't bother claiming 40p/day

                  There are bigger fishes to fry...
                  I'd probably agree with you on this. People who go for company bikes tend to be looking at the more costly ones where the frame weighs less than feather but costs £2k+

                  Comment


                    #10
                    Originally posted by Maslins View Post
                    From a purely financial perspective:
                    - if you'll be doing lots of business miles on what you're happy will be a cheap bike, buying personally and claiming the mileage will likely work out better.
                    - if you won't be doing many business miles and want quite a fancy bike, then getting the company to buy it and "lend" it to you tends to work out better. Just be aware it's the company's bike, relevant if you want to sell it on.
                    And insure it as well?

                    What happens if someone buys a very expensive bike for (cough) business needs and then they change gig where a bike is no longer required? Is it just the need at the time it was bought and anything else after that is irrelevant?
                    Last edited by northernladuk; 19 August 2019, 12:57.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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