Company Vehicles

[aceboy]

Morning I commute into work on a motorcycle, I do between 8-10k miles per annum.

The rate I can claim per mile is 24p.
The Value of the vehicle when purchased was £2700
The current value is around £1800
The bike is only used for commuting

Is it worth transferring this bike into the company and getting the company to pay ALL the cost (fuel, servicing...etc) or keep it as a private vehicle?


Many Thanks

[Alan @ BroomeAffinity]

Keep it private and claim the mileage. Whether its solely used for business or not, the fact is that it is available for private use and hence taxed as a B-I-K. BIK's are calculated on the cost when new so the charge will be high.

[Hiram King Of Tyre]

I dissagree. I wrote to HMRC about this. If you buy a new bike and are VAT registered, you can claim the VAT back, the BIK is 20% of all costs but is worked out pro-rata, so if 50% of mileage is business the BIK is reduced by 50%.

[agam]

I disagree. I wrote to HMRC about this. If you buy a new bike and are VAT registered, you can claim the VAT back, the BIK is 20% of all costs but is worked out pro-rata, so if 50% of mileage is business the BIK is reduced by 50%.

If the vehicle is available for personal use and not 100% business use then you can only reclaim 50% of the VAT back.

Plus then you also have to either pay the company for your personal fuel costs (based on a per mile charge provided by HMRC) or you also get the company to pay the fuel and then get taxed as a BIK on this as well. The company can then reclaim the VAT on fuel but you then have to add back VAT for personal use again based on a scale provided by HMRC based on emmissions.

It all depends on the CO2 output of the vehicle and the number of personal miles as to wether it is worth it. I have a company vehicle because I calculated that for it to be of benefit to me I needed to do 9k personal miles a year versus paying myself more instead.

http://www.comcar.co.uk/ have an excellent calculator that can help you decide if a company vehicle is the right choice for you. (Not sure if it covers motorcycles)

[Hiram King Of Tyre]

Motorcycles are taxed fifferently to cars. I had a detailed letter from HMRC who said that 100% of VAT is reclaimable. They also said that I should pay the fuel and we agreed a mileage rate of 13ppm that the company should pay me based on the actual cost of the fuel (that was at 90p per litre though). Basically they said that if you work out the actual fuel cost, then the company should pay you on that. The essential thin is that you aren't making a profit.

Running costs such as tyres, servicing, tax, insurance etc also all need to be factored in to the 20% BIK calculation for that year.