Ltd Company - Accounting & Tax Motorcycle treatment

Ltd Company - Accounting & Tax Motorcycle...

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Hi all,

We have a client who is sole director of a small ltd company. They have purchased a motorcycle in the year which is used for both business and private purposes. They have put all costs relating to the motorcycle through their accounts aswell as a mileage claim for their motorcar. Is there a taxable benefit for this motorcycle? How would you treat this?

Thanks in advance

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By Sir Les Patterson
31st Jul 2009 13:02

It's a car, it's not a car
Does the company own the bike? If so:
A motorcycle is a car for CA purposes (CAA 2001 s 81).
A motorcycle is NOT a car for benefit in kind purposes (ITEPA 2003 s 115).

So, claim all the expenses, including CAs, for the bike in the company and tax a benefit in kind on the director of 20% of MV of bike (when first made available, I think).

If not:
Deal with the expenses and mileage claim through the DLA.

For the car:
Deal with mileage and any associated expense claim through the DLA.

Maybe consider:
Introducing the bike to the company to boost the DLA and claim tax relief on depreciation (through CAs) and expenses. Do some sums to see if this is worth it in the long run.

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By stuart46
31st Jul 2009 14:07

It's not a car at all
In November it was confirmed that a motorcycle no longer falls withing s81 and so falls within the Annual Investment Allowance.

The only problem being the add back when they come to sell the vehicle but then presumably they will buy a new one so this will be offset.

Regarding the benefit in kind it is at 20% of the market value when first made available so this can be said to be the price paid not list price. Also remember that you can the reduce the benefit for the the business use of the motorcycle so it is potentially a good asset to hold within the company.

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
31st Jul 2009 15:14

But only changed
from 1 April 2009 - see Finance Act 2009 Sch 11 para 27. Date of expenditure determines whether this bike is a car or a bike for CA purposes.

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By Sir Les Patterson
31st Jul 2009 16:31

Live and learn!
Thanks chaps!

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By Supertorben
12th Mar 2013 17:15

No mentuion above of annual running costs ?

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