Sell my electric bicycles to my business for commuting

[cwah]

Hello all,

I live in London and I'm using my electric bicycle to meet my clients. It's cheaper than using the tube and more economical... but it's still quite expensive because there are frequently parts to repair.

I'd like to sell 2 of my bicycles (I have 5) to my company mainly to commute to work. Each of them because they are electric cost around thousand pounds. It's a big chunk but in the long term cheaper than taking the tube.

The tube can be expensed, so why not the bicycles?


ps: I know I'm allowed for 20p per miles travel (I have 6 miles each way daily), but repair cost is higher than that so I'd like to sell it to company

Would that be possible?

Thanks

[TheCyclingProgrammer]

YourCo can buy it from you and make it to available to you (see recent thread on bikes) but you need to ensure it buys it for no more than market value otherwise there will be a BIK.

https://www.gov.uk/expenses-and-bene...report-and-pay

So you need some evidence of the genuine market value for your bike second hand and it needs to be convincing.

Not sure why you want to sell two - is there a genuine business reason for YourCo to own more than one bike.

Alternatively, you could avoid that hassle, sell the, both privately to somebody else and have YourCo buy a brand new one instead.

[cwah]

I'm not going to sell it to buy a new one instead as I'll loose lots of money in the process. These are customs electric bikes, with specific parts coming from multiple places. It is expensive and I have lots of purchase receipts...

I need 2 bikes because I'm entirely dependent on cycle to be at work on time. If I have whatever issue (flat tyre, brake issue, battery issue, etc) I still need to be able to go to work. So that's when the second bike is required. It is also great to have a spare one when I'm ordering parts online... as it takes days or even week to arrive.

So 2 bikes are a necessity. I am even considering a third one (a Brompton) for train travel when I have to commute further down. But for now it hasn't been required yet.


So shall I just write an invoice to my company and buy it from there? No need to put any VAT or anything right? (I am under flat rate VAT)

[TheCyclingProgrammer]

Ok, I'm not convinced about your need for more than one company owned bike, let alone three, but it's not me you'd need to convince.

How do you intend to show evidence of the second hand market value?

Thinking about this some more, I don't think you will be able to claim a full deduction against your CT bill as I don't think the AIA applies to second hand goods. You can claim WDA though.

The whole thing seems pretty pointless to me.

1. You've already paid for the bikes from your own post tax income. You can't recover that tax, or whatever slice of your basic rate band you used if you paid for them from dividend proceeds.

2. YourCo can't claim them as an expense as they are assets. Pretty certain no AIA so WDA only.

3. You're spending company money on a depreciating asset for virtually no gain.

Here's a cheaper idea for you: forget fancy high maintenance electric bikes, get YourCo to buy you a normal bike instead (perhaps that Brompton you wanted), claim full tax relief on it using your AIA and get fitter!

[jamesbrown]

How are you planning to justify this in terms of it being a company expense? Presumably, under the Cycle to Work scheme (not sure if an electric bike qualifies, but it may do)? If so, the bike must not be for personal use, only for cycling to work, and it must be purchased by the company. Also, I think you'll struggle to justify two bikes, however "essential" you think it might be; you could always arrange for alternative transport. In any case, I can't really see what you're trying to achieve here because you've already purchased the bikes.

[TheCyclingProgrammer]

How are you planning to justify this in terms of it being a company expense? Presumably, under the Cycle to Work scheme (not sure if an electric bike qualifies, but it may do)? If so, the bike must not be for personal use, only for cycling to work, and it must be purchased by the company. Also, I think you'll struggle to justify two bikes, however "essential" you think it might be; you could always arrange for alternative transport. In any case, I can't really see what you're trying to achieve here because you've already purchased the bikes.

I think as long as the electric bike meets the definition of bicycle under the RTA 1988 it is eligible.

I don't think you need to use the Cycle To Work scheme but the requirements are the same in any case. As you say, the bike needs to be mainly for commuting and/or business travel.

I have no idea what OP is hoping to achieve from this convoluted arrangement either.

[jamesbrown]

I think as long as the electric bike meets the definition of bicycle under the RTA 1988 it is eligible.

I don't think you need to use the Cycle To Work scheme but the requirements are the same in any case. As you say, the bike needs to be mainly for commuting and/or business travel.

I have no idea what OP is hoping to achieve from this convoluted arrangement either.

Hmmm, without this scheme, I think there would be a BIK. Or, to put it differently, what would be the fundamental difference between purchasing a bike and a company car (which is why this scheme, and BIK rules for particular cars based on emissions are in place)? If using this scheme, the OP should note that there are specific requirements (I wouldn't generally link a Wikipedia article, but this is a pretty good summary):

Cycle to Work scheme - Wikipedia, the free encyclopedia

The salary sacrifice element, and hence the 1k limit, is not relevant (because OPCo would not be aiming to recover the cost), but note the other requirements. It appears that supplying two bikes, indeed two electric bikes, may be justifiable though (a possible reason cited as having one available at each end of the line).

[TheCyclingProgrammer]

No, the C2W scheme is slightly different but based on the same exemption that exists for bicycles specifically.

The rules regarding use are the same though.

EIM21664 - Particular benefits: exemption for bicycles

[d000hg]

5 bikes!

Other than the corporation tax relief the only advantage seems to be a way to get some extra cash out of the company, if you've already maximised your take-home without attracting higher rate tax?

The "I need two bikes" argument is pure, inexcusable nonsense though.

[TheCyclingProgrammer]

Other than the corporation tax relief.

Which would be minimal and spread over several years.