The Short Answer
If you already have a good bike we would recommend you to use the 20p per mile expense claim option. If you need a new bike then it’s well worth going down the Cycle to Work scheme route.
If you or your employees are keen cyclists there are three main options available to you. In this post we explain each of them.
Mileage Expense Claim
If you use your own bike for business travel you can claim 20p per mile travelled from your company. This will reduce your corporation tax and be tax free money in your pocket.
The claim can be made for travel to and from a temporary place of work or used as part of work such as travel to and from a clients office. However you cannot claim for travel from home to your usual place of work.
The records that must be kept to support the claim are exactly the same as outlined in our company car or mileage claim advice.
The Cycle to Work Scheme
The Cycle to Work Scheme is a government supported scheme to encourage employee to purchase a bike.
It works by the Company providing an interest free loan to it’s employee for the purchase of a bike and related equipment. The loan is then repaid through a salary sacrifice arrangement and is not taxed. This means that you effectively get a discount equivalent to your income tax rate.
The following conditions apply:
1.The bicycle and equipment remains the property of the Company until the loan is paid off in full.
2. The employee must use the bicycle primarily for business use (though ‘secondary’ personal use is fine).
3. The Cycle to Work scheme must be made available to all employees.
The Cycle to Work scheme is administered through cycle retailers. Here is a link to the Evans Cycles guidance which is pretty comprehensive, but when it comes to buying the bike you should find a retailer that offers the bike you want and then enquire if they offer a cycle to work scheme.
Buying a Company Bike
The last option and probably the most straightforward is to have you Company purchase a bike and make it available for use to employees.
There are two main conditions that must be satisfied
1. The bicycle and equipment must be made available to any employee. This does not mean every employee has to have one, just that they know they are able to have access to one if they so wish.
2. The journeys are primarily business journeys, including from home to work