I’m considering getting a bike for my work. I’m a self-employed mobile auto electrician working in London, with most of my work in the City and West End. I can carry all my tools and kit in one large toolbox. With a bike I avoid the Congestion Charge, delays and sitting in traffic burning diesel.
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?
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.
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