cheap accountants - cycle to work scheme

The Cycle to Work Scheme has been in place for a number of years now and was introduced by the Government of the time to promote healthier living, more physical exercise and to reduce pollution from trips to and from the workplace in a car. There are a couple of tax incentives that anyone operating their own business can benefit from.

How does the scheme work?

The scheme allows employers to loan bicycles and bicycle equipment to employees as a tax free benefit. This can be you in your capacity as an employee of your limited company, for example.

What are the tax benefits?

Your company can benefit twofold:

1. By reclaiming the VAT paid when purchasing the bicycle and associated equipment.

2. Through the use of the capital allowances that are permitted in relation to the cost of the bicycle and associated equipment.

The above means that the cost of the bicycle and associated equipment is essentially treated as a tax reducing expense for corporation tax purposes.

Any conditions associated with the Scheme?

The following conditions must be met to qualify for the scheme:

1. Ownership of the equipment does not transfer to the employee and it remains the property of the company.

2. Employees mainly use the equipment for work related journeys.

3. The scheme is made available to all employees of the company. It is relatively easy to take advantage of the Cycle to Work Scheme and to benefit from the associated tax breaks.

So if you are buying a bicycle don’t forget to consider the scheme.