TAX TIP OF THE WEEK - You may know that petrol/diesel company cars tend to work out quite expensive from a tax point of view. But what's the position for Motorbikes/Scooters?
Motorbikes are classed as plant and machinery, not cars, which means:
Benefit in Kind taxes are based on a lower rate than of a car meaning less personal tax
The companies NI cost will be lower
Full Corporation tax relief can be claimed in the 1st year
VAT can be claimed on the cost where it would be restricted for cars
All of this means for the example of 2nd hand car worth £4k personal tax cost could be £6k for a high rate taxpayer as it would be based on the list price
The equivalent value motorbike would give a personal tax cost of only 2k which would be offset by the more generous vat & corporation tax savings.
Therefore if you or your team do lots of local support for your clients, then a motorbike/scooter could be a very tax-efficient option for you.
Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist https://bit.ly/2YQbhvr