I have had a few queries recently on whether self employed people can get ‘cycle to work’ tax relief on the purchase of a bicycle.
The relief that exists at the moment is aimed at getting PAYE workers to purchase bikes and they can save up to half the cost of a new bike if they are on the higher tax rate, if you include PRSI. (more info at http://www.bikescheme.ie/)
Anyway, the joys of being self employed continue as yes, you guessed it; there is no such scheme for us the self employed. However…….where there is a will there is a way…..
In the same way as someone may purchase a car for their business, I believe to ‘keep the greens happy’ you can buy a bike to carry on your own business. The rules for PAYE are that they only have to use the bike for part of their journey. So surely it has to be consistent for the self employed. I would therefore allow the purchase of a bike for business use, and also, if you are VAT registered, claim the 21% vat back too.
The only downside is, you have to pay the full cost of the bike yourself, and then claim tax relief when your annual return is put through once your financial year is over. To ease the pain on cash flow maybe leave the purchase of the bike until you are at your year end and so your return could be filed pretty soon after the purchase. Make sure your returns are being done by your accountant on line. Paper returns are taking literally months to be processed at the moment but on line returns are going through pretty quickly.
Contact me if you need any more informationShare