TAX TIP OF THE WEEK - Cycle to work scheme
You are interested in the cycle-to-work scheme and were going to contact one of the many providers out there. But is this the best way to take advantage of the scheme?
In case you don’t know about the scheme it allows you to provide bicycles to your employees (including directors) without counting them as personal benefits and triggering BIK taxes.
The main conditions are:
👫All your employees must be offered the scheme
📝They must not own the bike
🚴It should be used for commuting (though HMRC would take a relaxed approach to this requirement)
A quick google search will bring up many cycle-to-work scheme providers which give the impression that you need to purchase the bike through them. 🌍
However this is not the case, the advantage of using the providers is that they will fund the purchase of bikes for your company, however, assuming you can fund it yourself then the tax position will be much better.
For example, if you are a sole director/employee your company could buy a top of the range bike for say £3000, reclaim the VAT, claim capital allowances and make the bike available to you personally. 💪
If you have employees you will need to ensure the scheme is offered to all employees, but there is no requirement that you offer the same value of the bike. Therefore you can keep the top-end bike and let them make do with more budget-orientated brands. 😎
Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist.