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Wing Commander
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Discussion Starter #1
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.





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
 

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Truffle shuffle king
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1,281 Posts
Yippeee - first time ever do I want to call my accountant.
I take it when you say use the bike for work this includes travelling too and from work?
 

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Wing Commander
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Discussion Starter #3
Only if you are self-employed.
 

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XRV750 RD04
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The write off they're talking about seems to be the recent "Annual Investment Allowance" rule on plant and machinery (that's up to 50,000 which matches the figure given above). If that's right, then if the bike exclusively for business use, perhaps you might be able to claim back 100%.

I'm not sure where the 40% comes from, because presumably that's tax on income (which would be money taken out of the business as earnings, after costs and capital investments)? Which is a different thing?

I bet it's a big plus for self employed couriers and the like though I'm not sure how it would work if you were using the bike for business and for pleasure (or whether it would apply to commuting - it's probably aimed at fleet vehicles like couriers, pizza scooters etc by the sounds of things)?

You'd probably also have to insure the bike for business use (which seems quite expensive and is in a different class to commuting?).
 

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Truffle shuffle king
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1,281 Posts
Self employed - check
bike used for getting too and from work - check
bike used during work - check

oops now got to think about the insurance for business.
Mmm as usual - a minefield.
Now where is that accountants number
 

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Wing Commander
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14,437 Posts
Discussion Starter #6
Self employed - check
bike used for getting too and from work - check
bike used during work - check

oops now got to think about the insurance for business.
Mmm as usual - a minefield.
Now where is that accountants number
If you are using the bike for work you must have insurance to cover that, not just commute cover. It's not that much more.
 

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Truffle shuffle king
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1,281 Posts
Just shows you how easy it is to not think about insurance. I was only using it to get too and from the practice but recently I have started using it for delivery as it is faster then by car. Never then thought about the change. On to it today.
 

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May Contain Nuts
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If you are using the bike for work you must have insurance to cover that, not just commute cover. It's not that much more.
I just added business cover to my insurance and it cost me a whole £14 for the remaining 5.5 months, I'm told it would be £31 for the year. I ran a few other quotes off and I can get it down to less than £20 on a new policy so it's cheaper than you may think.
 

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Wing Commander
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14,437 Posts
Discussion Starter #9
Thing is, if you are on a work trip and have an accident and the insurer finds out, they can simply say you have not been honest with them, pay you back your premium and refuse to pay out for the accident. This, in effect, leaves you uninsured.

For £30 a year, why risk it?
 

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XRV750 RD04
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1,549 Posts
Wow. I'm amazed this is so cheap. I don't use my bike for work, but when getting my first insurance quotes I tried out the business use box in one of the quote forms just out of curiosity and it came back as silly money (can't remember what it was exactly, but it was a massive increase - several times more!).

Obviously I did something wrong or happened on completely the wrong insurer for business use.

Never expected you'd be able to get it so cheap. That's handy to know should I ever need to use the bike in that way!
 

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Premium Member
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So where do you stand if the bike is used for personal use as well.
Presumably you personally should pay your business for that use, otherwise it would be taxable as a perk?
 

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Wing Commander
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14,437 Posts
Discussion Starter #12
So where do you stand if the bike is used for personal use as well.
Presumably you personally should pay your business for that use, otherwise it would be taxable as a perk?
It is different for a second hand bike and a new bike so will check that out for you - but yes you pay tax on having a perk - like you would a company car you were allowed to used for personal use.
 
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