In the wake of yesterday’s Budget Get On has discovered a little-known tax law that could allow self-employed bikers to slash up to 40% off the cost of a new bike.
The Get On campaign has identified a change to the Finance Act which means self-employed riders buying a bike solely for business use can deduct 100% of its cost from their taxable profits by claiming it as an annual investment on their tax return.
The Get On campaign, which encourages new and lapsed bikers onto two wheels, has highlighted that the change in the law means you could save a staggering £2,728 on the cost of a new Honda CBF1000. Valued at £6,821, the change in the law will bring the cost of a new CBF1000 down to only £4,093 for those who pay 40% tax.
The recent change to the Finance Act shows the majority of those using their bikes for business will not only be able to take advantage of the time saving benefits enjoyed by life on two wheels, but they can also take advantage of a great tax break.
“Motorcycles are no longer treated for tax purposes like cars but as plant and equipment,” said John Shaw of Chartered Accountants, Bentleys of Bolton. “This has a significant effect on the amount of tax relief you can claim when you buy a motorcycle for use in your business.
“Company cars are now limited to a 20% or 10% annual tax write-down unless they have a carbon footprint below 110g/km, in which case you may qualify for a 100% allowance. The same criteria no longer apply to motorcycles. Whatever their CO2 emission, 100% of the cost is potentially available as a tax write-off in the year of purchase.”
Sean Byrne, Tax Consultant for accounting firm Haslers, added: “The new rules apply only to motorcycles purchased after April 6, 2009. Total capital allowances must be within £50,000 in order to claim the tax write-off”
Alistair Spence, who uses a bike to make a 62 mile regular business trip from St Albans to London, said: “I use a bike to make savings anyway and to also enjoy the freedom of not having to rely on public transport. This new law makes riding a motorcycle an even more viable financial solution.”