There are several different ways you can go about claiming your bicycle as a business expense on your taxes. How you do it partly depends on what you do for a living and your business structure.
Claiming a Tax Deduction for Your Bicycle if You’re Self Employed
The easiest way is to use simplified expenses to claim for the cost of using your bicycle. You can claim a flat amount for each mile you cycle on your bike.
For the tax year 2020/21 the simplified flat rate is 20 pence per mile for bicycles.
You’ll need to make sure you keep details of your journeys, where you have travelled and the number of miles to support your claim on your tax return.
It’s also worth remembering that you cannot claim for any personal journeys, including your commute from your home to your base of work. You also cannot claim for additional repairs and maintenance for the bicycle as this is covered in the 20p flat rate per mile.
If you are using my bookkeeping spreadsheet you’ll find a tab for tracking your bicycle claim, which is automatically included in your costs.
Buying a Bicycle if You Are Self Employed
If you use your bicycle only for work reasons then it may make sense to buy your bicycle through your business.
You can claim for the cost of the bicycle on your taxes using capital allowances. And if you do choose to do this you won’t be able to claim the mileage allowance of 20p but you can expense costs of repairs and insurance.
How to Buy a Bicycle Through Your Limited Company
If you use your bicycle predominently for work reasons then you can buy your bike through your Limited Company.
You can then claim corporation tax relief back on the bicycle and any VAT paid on the price, if you are VAT registered.
The costs of maintenance, repair and insurance can be put through you Limited Company as a business expense.
If you use your bicycle for personal reasons mainly, then you can choose to claim 20p per mile for any business trips you make.
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