Company Motorcycle maths

[alangarden]

So this has been done to death but wanted to check my ‘maffs’!

I’m considering purchase of a motorbike purely for business use to dive in and around city centres when visiting Clients (it may also only be used in a sunny day!). Making use off the Annual Invesment Allowance and the fact the motorcycle is treated as plant and machinery. For context I own a consultancy with 5 employees, ltd company and VAT registered.

so, onto my Maffs;

Brand new Motorbike £10000

VAT saving -£1666

100% write down (AIA) CT saving -£1333

Motorcycle cost to company £7001

Sale of motorcycle back to dealer after one year £6875 (£8250 inc VAT)

Effective cost of brand new bike £126

Rinse and repeat for 2022 model motorbike.


It seems Boris is far too generous with this and as the saying goes if it’s too good to be true.... but have I broadly got this correct?

[Fred Bloggs]

BIK charge for personal use, perhaps?

[alangarden]

BIK charge for personal use, perhaps?

well I looked at that and genuinely, the bike would only be used for business mileage visiting clients and the like. I also have another Sunday motorcycle which I would use for pleasure.

I just cant quite believe that it can be so low!

[Lance]

So will it be used for "sunny days" like in your first post?
Or purely for business like in your second post?

Sounds like you intend the former but just pretending not.
In either way, I would have thought that HMRC will see this as the same as a car. and you will have 'access to use it for personal' therefore you pay BIK.
End of.

Only way round of this is if it's a pool vehicle for use by other employees....
Which it isn't.

Why not get an electric bike? That perfectly suits what you describe (whizzing round the city), and HMRC have a cycle to work scheme that would fit better to avoiding tax.

[alangarden]

So will it be used for "sunny days" like in your first post?
Or purely for business like in your second post?

as per both posts, used purely for business but only on sunny days, otherwise I’ll drive my personal car. HMRC class a motorcycle as plant and machinery, so my understanding is that you would only pay bik on the proportion of personal use, and VAT and AIA offset would also be in proportion, so if 75% businesses use, adjust the figures proportionally. I think you may be incorrect in the assessment of a benefit by having it available to you such as a Van.

when I say diving into the city, I’m referring to a 200/300 mile round trip into London. So it’s a no to the electric cycle!

[Lance]

as per both posts, used purely for business but only on sunny days, otherwise I’ll drive my personal car. HMRC class a motorcycle as plant and machinery, so my understanding is that you would only pay bik on the proportion of personal use, and VAT and AIA offset would also be in proportion, so if 75% businesses use, adjust the figures proportionally. I think you may be incorrect in the assessment of a benefit by having it available to you such as a Van.

when I say diving into the city, I’m referring to a 200/300 mile round trip into London. So it’s a no to the electric cycle!

Does it make sense to buy a company motorbike? - Friend and Grant

Proving 100% business use can be tricky. If your main place of work is your home, you have to travel regularly to site and you only use your motorbike for this purpose then this would be fine. You would however need evidence such as a mileage log book and be prepared to argue vigorously with the taxman!

That I believe is the same situation as cars. HMRC's position is that it's available for personal use therefore cough up. I wouldn't want to be having that argument and further digging into 6 years of every single invoice and contract.

[Fred Bloggs]

well I looked at that and genuinely, the bike would only be used for business mileage visiting clients and the like. I also have another Sunday motorcycle which I would use for pleasure.

I just cant quite believe that it can be so low!

It isn't that simple. I know from personal experience that trying to convince HMRC that a company vehicle is not available for personal use is impossible. You have to report the BIK whether you actually use it or not. I even had to pay BIK when I was abroad when the company vehicle was parked in the UK.

[BlasterBates]

If you claim 100% capital allowance you have to pay tax on the full amount you sell it for. You won't save much. It isn't worth the hassle.

[northernladuk]

We've done motorcycles quite a few times. Using the Google search method putting motorcycle site:forums.contractoruk.com/accounting-legal in to google we get

https://www.google.com/search?q=moto...4dUDCA4&uact=5

Some useful threads in there.

Problem is you are asking a bunch on contractors here. Best bet is to always ask your accountant first.