Help With VAT On Motorbike For Work

halphy

Hi Hope someone can help, :j

My husband is self employed but works for a company. He bought a motorbike which he has paid for in full.
He uses solely for work purposes, attending meeting and everything else associated as he runs a motorcycle shop.
How much can we reclaim back in VAT And how does the petrol work when he uses for work alone?

Thanks Everyone

halphy

I see, do u know how much id be able to claim, ive heard different things from different people.

thanks

halphy

What about the VAT Claimed for buying the bike for work purposes. I calim a certain amount for him for petrol, but what about the bike price??

JasonLVC

For full VAT recovery, the bike has to be used 100% exclusively for business use. If it is not, then no VAT recovery can take place at all.

No apportionment, no percentage. Nil.

If you can demonstrate the vehicle is only used for business purposes then you can reclaim 100% of the VAT, but HMRC will have a number of arguments ready to hit you with including :-

1. If the insurance covers Social, Domestic Pleasure...then it must be being used for personal journeys and therefore, not wholly business.

2. The bike must be retained at the business premises - so you'd have to drive to work in your car/other bike, then use your business bike for business, then at end of day go back to work, drop off busines bike and come home in personal transport. if your work is your home/registered business address then straight away you cannot claim the VAT, even if you have use of another vehicle at home. Also, if sole trader, again, cannot reclaim any VAT.

3. HMRC will require full detailed mileage logs of business journeys undertaken and will compare against fuel expenditure or fuel expenses claimed by the user/business - this also traps those who say they do the above at 2 (drive to work, swap vehicles, drive back, etc) but don't actually do it!.

So basically, you can recover all the VAT if you don;t do any of the above three things....but it is very tricky to prove.

JasonLVC

You're quite correct lglite - put it down to me not being able to tell the difference between a car and a bike!.

halphy

lglite wrote: »

I disagree. This would be true if we were talking about a 'motor car' (which I am sure you are aware are precisely defined), but motor bikes fall under the same rules as vans and trucks, as they are not 'motor cars', and are treated the same as any other item that is bought for a business, but has some private use.

The OP has a choice of either recovering the proportion of the VAT on the purchase of the bike that relates to business use, or recovering all the accounting for VAT on the purchase and then accounting for VAT on the private use. Either way, they would need some basis for the calculation.

Providing the bike is used for business purposes, VAT can be claimed on the maintenance and repair of the bike.

VAT can also be claimed on the petrol, again either recovering the proportion of the VAT that relates to business use, or recovering all the accounting for VAT and then accounting for VAT on the private use. Mileage records would be required to evidence this.

Thank You, I didnt realise it would be classed as an item bought like any other for VAT Purposes, I feel a lot better knowing what i can claim. THanks again

moneysavingpornstar

I know you already have the answer, but I just wanted to confirm that I have bought bikes on the business before. I have reclaimed the Vat in full with no problems at all.
A little known loophole the bike/van thing!! To cover yourself as far as running expenses are concerned, keep a mileage log. Then Vat Man can't say that you are using it as a Sunday toy and hit you with scale charges.

moneysavingpornstar

lglite wrote: »

But as I said above, you can only reclaim the VAT on the purchase in full if either you solely use the bike for work (which doesn't include home to work) or you account for VAT on the proportion of the private use of the bike.

Scale charges don't apply to bikes (or vans).

If scale charges don't apply, then why did I pay them when I had a VAT check and hadn't kept a mileage log !!??
You need to prove business only use, that's my point. So keep a mileage log to cover yourself and make sure every time you go out on it, you have somewhere to go for business !!

moneysavingpornstar

Damn that Vat man. Don't know their own bleedin rules !!
It was a few years ago now so can't be bothered. Thanks for upsetting me though LOL :beer:

stphnstevey

What sort of mileage rates are allowed for motor bikes - ie still upto 40p a mile without no additional tax?

Any bikers able to estimate roughly what they spend per mile?