We all know that Holland is the main player when it comes to cycling but now is the time to clean up your old bike and get cycling to and from work.
If you’re an employer though, there’s a tax benefit to supply bikes to your employees as long as they mainly use it for work related travel. The ‘Cycle to Work’ scheme means employers can offer their staff and Directors a bike and protective headgear and gloves (that they own or rent) to use and there are potentially no PAYE or NIC implications.
Employees are not required to keep detailed records of their travel as far as HMRC are concerned as they would be if claiming mileage. What’s more, after a year or so the employer can give the bike to the employee however, this would be classed as a ‘Benefit in Kind’ and would be liable for tax. If the cost of the bike was originally £499 (including VAT) or less then after a year the ‘Benefit in Kind’ would be around £90 which would mean a 20% tax payer would have to pay around £18 and the employer would have to pay £12 class 1A NI. If the bike is sold to the employee for at least £90 then there would be no ‘Benefit in Kind’ implications.
So get on your bike and not only keep fit it’s potentially a tax free benefit.
To find out more about our bookkeeping services, workshops and training, please call Cain & Co on [eeb_content]020 8087 1341[/eeb_content], or email us at email@example.com.