My accountant seems a bit dubious about using a ‘leisure vehicle’ for work and has said he doesn’t think HMRC will wear it, so is advising me to stick with the van.
I want a BMW F800GS or the Triumph Tiger 800, with a massive Givi topbox and a tank bag. I will be keeping my Ducati 848as my fun bike and this is genuinely a trade-in of my van, which will be going. Is my accountant correct?
Answer
Usually I run a mile from tax queries but I can answer this one easily enough. You have a good business case for a bike.
While HMRC guidance refers to cars and vans, a bike is also an allowable business expense both for running costs and the actual purchase of the bike.
Your case is really straight forward: you have a bike which is adapted for work and used for work, while the Ducati is your leisure bike. Therefore your ‘work bike’ would be allowable in full, so long as you used it purely for work. If you use it 10 percent of the time for leisure, then 90 per cent is tax-deductible.
The purchase of the bike for a small business is usually allowable in full from your annual capital allowance. Your VAT status makes a bit of a difference, but if you are not VAT registered, then you can reclaim the full purchase cost, including VAT. I run my bike through my business with the approval of my accountant and HMRC, who accept that as motorcycle solicitors we need our bikes for work.
I am not really competent to get into the tax efficiency of buying a bike through work, but as a principle your bike is as much of a business expense as your van. Your insurers will need to know you are using the bike for work. This does not rack up the premium too badly but you will not be able to transfer your Ducati or van’s NCB to your work bike.
Andrew Dalton
RiDE Magazine January 2014
This is a very peculiar stance Ged. An MoT certificate is a certificate of roadworthiness. Are you supposed to have a daily MoT? Your motorcycle licence is proof of competence. HM Government has decided that a full motorcycle licence is proof of competence. What else do you need? A certificate from a training school saying “this guy can pass his motorcycle test” – when you already have a licence. This seems to me like your company insurers don’t want to insure you and are putting up entirely artificial hurdles. If they don’t want to insure they do not have to but this sounds like complete insurer BS to me. I’d rather they were honest and just said no rather than send you after some imaginary documents which you might be able to get and then say no again.
Andrew,
If I use my bike for work instead of a car, what Health and Safety concerns are there?
I am being told I will need a certificate of road worthiness to be covered on the company insurance and proof of competence.
I am not really competent to give tax advice Ferg but I cannot see why a second hand bike used largely for work would not be an allowable expense, but we always buy our company bikes new as VAT is reclaimable. HMRC has asked us once to justify the use of bikes and was satisfied with our need for motorcycles – which we provide employed lawyers with (and even trainees) with as their remuneration package.
Good evening, Andrew. I am a financial adviser (sole trader), and would use a bike to visit my clients, mostly in the city (Edinburgh). Can I buy a used motorcycle (privately), or must it be new and from a dealer to be an allowable business expense? Many thanks. Yours aye, Ferg