Cycle 2 Work

[chrisl]

What is the best/ligitimate way of doing this.

I have my own Ltd company.

With the cycle to work scheme i see that i sacrifice some salary and then can receive a bike from my company. The company gets the benefit by what way? Does it claim the cost of the bike as an expense as it dosnt look like it does?

If the company can not claim it as an expense, could i just buy the bike myself and then claim the expense for the bike through my company?

I am confused the best way of doing it.

[Billy Pilgrim]

Just buy the bike yourself and then claim 20p (best check that number!!) per mile when you ride it too/from work....

Seems best way to me anyway

(Unless you intend NOT to use it to bike into work!)

[Sockpuppet]

I am confused the best way of doing it.

Buy bike through company, reclaim VAT (if not flat rate).

Loan bike to employee - remains company property. No BIK needed. No salary sacrafice needed.

Simple.

5) Setting up a Cycle to Work Scheme
To take advantage of the tax and Class 1A NICs exemption, an employer can simply buy a cycle and cyclists' safety equipment, reclaim the VAT, make use of the capital allowances and loan it to an employee for qualifying journeys to work. This arrangement means that the employee's normal salary arrangements are not affected. It may be, however, that the employer wants to recover the cost of providing the cycle and safety equipment loaned to the employee. Usually this would be done through a salary sacrifice arrangement.

From: http://www.dft.gov.uk/pgr/sustainabl...2?page=1#a1003

[chrisl]

The mileage done will be 10 miles per day, 5 days a week.

The bike will be quite expensive, say £1,000.

Is there a quick way of working out the savings for both cycle 2 work and just claiming mileage and which will be best?

[Sockpuppet]

Mileage...

5 x 10 x 20p = £5 a week.

So say £250 a year.

Thats the tax saving on £250 so 20% + NI (say 30% for arguments sake).

£250 x 30% = £75/year



Cycle to work...

£1000 cycle. Reclaim VAT = so £150 reclaimed

Then £850 over 4 years of capital allowances = £212.5 per year off profit.

So corp tax saved on £212.5 = £42.50

So say you keep the bike for 4 years your looking at £80 a year saving.



Of course your also not paying the TAX+NI on the £1000 but I just assumed you were taking payments upto the limit therefore would pay the same amount of tax + NI and wouldn't payyourself either £1000 less or more due to buying the bike (i.e. its bought from savings)