Cycle to Work - one-man company

[fastpedaller]

I'm puzzled as to why they would view 40p a mile as a nice little earner (unless they haven't worked out the costs). For most vehicles, the variable costs (ie repairs, petrol. oil and tyres) come to more than this.

No they don't. A quick estimate of mine was 15p per mile. The AA suggest 18-29p per mile running costs depending on price of car. So as many fixed cost would be the same whether the owner used the car for business or not the owner of a cheap car may indeed be earning something from a 40p per mile claim.

http://www.theaa.com/resources/Document ... ol2014.pdf

You either have a VERY fuel efficient car (real world vs quoted consumption?) or no repair costs! if it's a 15p a mile cost

[Bonefishblues]

I'm puzzled as to why they would view 40p a mile as a nice little earner (unless they haven't worked out the costs). For most vehicles, the variable costs (ie repairs, petrol. oil and tyres) come to more than this.

No they don't. A quick estimate of mine was 15p per mile. The AA suggest 18-29p per mile running costs depending on price of car. So as many fixed cost would be the same whether the owner used the car for business or not the owner of a cheap car may indeed be earning something from a 40p per mile claim.

http://www.theaa.com/resources/Document ... ol2014.pdf

You either have a VERY fuel efficient car (real world vs quoted consumption?) or no repair costs! if it's a 15p a mile cost

...add in very low insurance, and zero or low depreciation to that.

[fastpedaller]

You either have a VERY fuel efficient car (real world vs quoted consumption?) or no repair costs! if it's a 15p a mile cost

...add in very low insurance, and zero or low depreciation to that.[/quote]

What car do you have that attracts no extra cost for business cover (compared with SDP) and has nearly zero depreciation?

[Bonefishblues]

You either have a VERY fuel efficient car (real world vs quoted consumption?) or no repair costs! if it's a 15p a mile cost

...add in very low insurance, and zero or low depreciation to that.

What car do you have that attracts no extra cost for business cover (compared with SDP) and has nearly zero depreciation?[/quote]



I think you've got your quoting in a muddle (as indeed do I for some unaccountable reason?) - I don't have such a car, I was just adding a couple of additional costs into the mix which need to be taken into account, but often aren't, when calculating a true cost per mile.

[nosmarbaj]

To have a bike as a capital purchase for the company you would need to be able to argue that it is a legitimate business expense, and you should only claim back that portion which is for business use. As with a company van, private mileage has to be deducted and only business mileage is allowed tax purposes.

Surely the whole basis of the Govt's Cycle to Work scheme is that a company may indeed buy a bike as a legitimate capital purchase, to be available to employees for business use (the HMRC guidelines say in effect that it should be mainly i.e. minimum 50% for business use). I think in this case business use also includes commuting to/from usual place of work, which for purposes of company car tax does not count as business use. Furthermore again according to HMRC, no records need be kept, therefore it would be next to impossible to prove a bike was not being used mainly for business.

The idea is to encourage cycling, and the scheme may be one of the few genuinely effective things the Govt. has done actually to achieve this,.

[nosmarbaj]

Re. costs of running a car, my rule of thumb is to assume the total cost is approximately twice the fuel cost. Obviously this depends a lot on all sorts of factors as mentioned upthread, but it's good enough as a rough guide for me.

[TrevA]

My company only pays 26p a mile for cars but pays 20p per mile for cycling. Given that petrol costs about 15p per mile, cycling is clearly the winner.

Albeit the car driver can claim relief on the difference between the company rate paid and the HMRC rate.

So that's 20% of 14p per mile. Given petrol costs 15p per mile they are only making 11p per mile "profit" plus another 3p from the tax relief. As I have no fuel cost (and barely any wear and tear cost) I think I'm still better off on the bike at 20p per mile.

[Cherwell]

Surely the whole basis of the Govt's Cycle to Work scheme is that a company may indeed buy a bike as a legitimate capital purchase, to be available to employees for business use (the HMRC guidelines say in effect that it should be mainly i.e. minimum 50% for business use). I think in this case business use also includes commuting to/from usual place of work, which for purposes of company car tax does not count as business use. Furthermore again according to HMRC, no records need be kept, therefore it would be next to impossible to prove a bike was not being used mainly for business.

It looks like you’ve answered your own question. I’ve just looked up the HMRC guidance and I can’t see anything wrong with your interpretation. The only query could be on the matter of ‘qualifying journeys’ but then, like you say, you are not required to keep any records so it would be impossible to check. I don’t see any reason why you should not go ahead and do it.

[nosmarbaj]

It looks like you’ve answered your own question.

Indeed it seems like that - but the answers here have certainly helped me clarify it all in my head, so thanks everyone.

[Elizabethsdad]

You could buy a cargo bike, put your companies name on it for advertising and then claim the whole lot back as business expense.

[fastpedaller]

Surely the whole basis of the Govt's Cycle to Work scheme is that a company may indeed buy a bike as a legitimate capital purchase, to be available to employees for business use (the HMRC guidelines say in effect that it should be mainly i.e. minimum 50% for business use). I think in this case business use also includes commuting to/from usual place of work, which for purposes of company car tax does not count as business use. Furthermore again according to HMRC, no records need be kept, therefore it would be next to impossible to prove a bike was not being used mainly for business.

It looks like you’ve answered your own question. I’ve just looked up the HMRC guidance and I can’t see anything wrong with your interpretation. The only query could be on the matter of ‘qualifying journeys’ but then, like you say, you are not required to keep any records so it would be impossible to check. I don’t see any reason why you should not go ahead and do it.

Only issue I can see is that you can only buy a complete bike, so you can't build from parts to get your own unique spec. I notice at least one supplier stating a £65 admin charge if using the scheme - is that commonplace?

[nosmarbaj]

Only issue I can see is that you can only buy a complete bike, so you can't build from parts to get your own unique spec. I notice at least one supplier stating a £65 admin charge if using the scheme - is that commonplace?

Many larger organisations will employ specialist third party companies to administer the scheme, and these may well require that only complete bikes are bought, and will naturally charge a fee for their service. But it is perfectly accepatable to manage the system oneself and there should be no reason not to build the bike oneself if so desired - probably that is what I'll do.

[gplhl]

[quote="fastpedaller"]

You either have a VERY fuel efficient car (real world vs quoted consumption?) or no repair costs! if it's a 15p a mile cost

...add in very low insurance, and zero or low depreciation to that.

If you haven't bought the car just for work, costs should be under 40p, your costs are only those per mile for business. My last car cost me £1.25 per mile over 6,000 miles per year (I rode a lot), depreciation, insurance, fuel, servicing, tax etc. One of the biggest chunks was depreciation.

If I added another 3,000 miles for business the extra cost is slightly more depreciation, fuel, a little extra for insurance policy to cover business and a very little extra for servicing and wear as I'd get the car serviced every year whether I'm doing 9,000 miles or 6,000 miles.

The additional cost per mile was 29p as most of the initial costs are personal by the fact I owned a car for my own use in the first place. Only additional costs to do the extra mileage should be counted.

I subsequently sold my car and rode everywhere after working out how much it was costing me! (It was a nice car though)

Oh and then I left my job and started to ride to Africa... More of a challenge! I'm not in a rush to get a car again.

Gary
www.longbikeride.co.uk

[Heltor Chasca]

Rats. Us poor self employed gardeners who would love help buying bikes. I did bandy around the idea a few years ago about cycling to work at least twice a week. Nice idea but the kit we have to lug around is preposterous. Trailers included. Hurumpf...hc

[Elizabethsdad]

Rats. Us poor self employed gardeners who would love help buying bikes. I did bandy around the idea a few years ago about cycling to work at least twice a week. Nice idea but the kit we have to lug around is preposterous. Trailers included. Hurumpf...hc

In looking at cargo bikes recently I have found there are few long John style models, such as the Urban Arrow, where the front load section can be detached. Add a couple of handles and there's your wheel barrow.