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The campaign to encourage biking, Get On, says changes in Alistair Darling’s budget mean the self-employed buying a motorcycle for work can put the whole cost against tax.
For higher rate taxpayers with could result in savings of 40% of the cost of a new bike. It would still wipe off more than one fifth of the price for standard rate taxpayers.
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The Get On campaign has identified a change to the Finance Act which means self-employed riders buying a bike solely for business use can deduct 100% of its cost from their taxable profits by claiming it as an annual investment on their tax return.
Thousands saved
“You could save a staggering £2,728 on the cost of a new Honda CBF1000. Valued at £6,821 and the change in the law will bring the cost of a new CBF1000 down to only £4,093 for those who pay 40% tax," Get On said.
John Shaw of chartered accountants, Bentleys, of Bolton, said: "Motorcycles are no longer treated for tax purposes like cars but as plant and equipment. This has a significant affect on the amount of tax relief you can claim when you buy a motorcycle for use in your business.
"Company cars are now limited to a 20% or 10% annual tax write-down unless they have a carbon footprint below 110g/km, in which case you may qualify for a 100% allowance.
No CO2 limit
“The same criteria no longer apply to motorcycles. Whatever their CO2 emission, 100% of the cost is potentially available as a tax write-off in the year of purchase.”
Sean Byrne, Tax Consultant for accounting firm Haslers, added: “The new
rules apply only to motorcycles purchased after April 6, 2009. Total capital
allowances must be within £50,000 in order to claim the tax write-off”
Alistair Spence, who uses a bike to make a 62-mile regular business trip from St Albans to London, said: “I use a bike to make savings anyway and to also enjoy the freedom of not having to rely on public transport. This new law makes riding a motorcycle an even more viable financial solution.”
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Get On
For higher rate taxpayers with could result in savings of 40% of the cost of a new bike. It would still wipe off more than one fifth of the price for standard rate taxpayers.
The Get On campaign has identified a change to the Finance Act which means self-employed riders buying a bike solely for business use can deduct 100% of its cost from their taxable profits by claiming it as an annual investment on their tax return.
Thousands saved
“You could save a staggering £2,728 on the cost of a new Honda CBF1000. Valued at £6,821 and the change in the law will bring the cost of a new CBF1000 down to only £4,093 for those who pay 40% tax," Get On said.
John Shaw of chartered accountants, Bentleys, of Bolton, said: "Motorcycles are no longer treated for tax purposes like cars but as plant and equipment. This has a significant affect on the amount of tax relief you can claim when you buy a motorcycle for use in your business.
"Company cars are now limited to a 20% or 10% annual tax write-down unless they have a carbon footprint below 110g/km, in which case you may qualify for a 100% allowance.
No CO2 limit
“The same criteria no longer apply to motorcycles. Whatever their CO2 emission, 100% of the cost is potentially available as a tax write-off in the year of purchase.”
Sean Byrne, Tax Consultant for accounting firm Haslers, added: “The new
rules apply only to motorcycles purchased after April 6, 2009. Total capital
allowances must be within £50,000 in order to claim the tax write-off”
Alistair Spence, who uses a bike to make a 62-mile regular business trip from St Albans to London, said: “I use a bike to make savings anyway and to also enjoy the freedom of not having to rely on public transport. This new law makes riding a motorcycle an even more viable financial solution.”
Links (new window)
Get On
