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Give Yourself A Tax Break By Cycling To Work
Fuel prices may be starting to fall, but more and more of us are still thinking about cutting down on our mileage, not just to cut our motoring costs but to reduce our carbon footprints too.
So there’s good news for businesses that want to find ways to help their employees travel in a more environmentally friendly way, because the taxman offers a range of incentives for promoting workplace cycling schemes.
Bosses who draw up a Green Travel Plan, setting out ways to promote walking, cycling and using public transport to get to work, pay no tax or national insurance if they provide staff with bicycles or cycle safety equipment, provided that the bikes or equipment are available to all staff.
Employees can even use the bikes for leisure, providing they are mainly used for commuting to work, while employers are exempt from paying tax or national insurance on the cost of providing cycle parking.
Businesses can also sign up to a scheme under which they can claim back the VAT on bikes they buy, then lease the bicycle to an employee for a year. The employee pays a monthly rental, which is deducted before national insurance and income tax are calculated, cutting their personal tax bill.
Staff who use their own bike for business travel are eligible for a tax-free payment of 20p a mile. Employers can pay more than this, although higher payments will be taxable.
And businesses that organise cycle to work days, to encourage staff to travel by bike, can offer a tax-free meal or refreshments on those days, up to six times a year.
As well as the tax and environmental benefits of travelling to and from work by bike, cycling eases car parking problems for employers while saving them money on the costs of company car maintenance.
If you would like to find out more about the tax benefits of company cycling schemes, please contact us.