Freelance cycling instructor - tax deductable travel?

joolsybools

Hi All,

I've recently registered as a sole trader and am doing freelance cycling instruction in schools and to private individuals. I am not registered for VAT.

I have no fixed place of work, my jobs (schools) currently come from 4 or 5 companies and I am starting to build up my own client base of individuals wanting lessons. Each job is in a different location and I am required to cycle there and use my bike to teach with and to ride during the lessons. Jobs are generally for a couple of hours, for 1 day or for 4/5 days.

My questions are:

• Is the mileage I do to and from each job tax deductable?
• Is the mileage I do 'on the job' tax deductable?
• If I needed to purchase a new bike what are the pros and cons of buying it as myself (personal account) or through the business (sole trader)?

Many thanks in advance

Pennywise

You can claim capital allowances on the price of the bike but as you're not actually incurring any travel costs, there's nothing to claim beyond the cost of the bike.

Mids_Costcutter

Pennywise wrote: »

You can claim capital allowances on the price of the bike but as you're not actually incurring any travel costs, there's nothing to claim beyond the cost of the bike.

Why no travel costs? A bicycle is cheap to run, but there are still some costs, especially replacing tyres, chain, brake pads etc. on a regular basis.

It sounds like you only have temporary workplaces according to HMRC definition (below) and so should be able to claim 20p / mile against tax on travel to your workplace.

http://www.hmrc.gov.uk/manuals/eimanual/EIM32075.htm

The mileage on the job, I would have thought definitely qualifies as business mileage.

but you may wish to check with your tax office?

Regarding buying a new bike, the bikeforall web site offers the following advice regarding the Cycle to Work scheme:

"if you don't have a PAYE salary, you can't take part in a Cycle To Work salary sacrifice scheme. The only bike saving for a self-employed person would be to buy a bike via the business and reclaim the VAT, if VAT registered that is"

Source: http://www.bikeforall.net/content/cycle_to_work_scheme.php

jimmo

EIM, the Employment Income Manual, applies to those in employment.
BIM, the Business Income Manual, applies to the self employed.
For the self employed, the home can often be the base of business meaning that all travel to clients is business travel. It seems likely in this case but perhaps you should check this out.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM37605.htm.
You can, of course claim capital allowances in respect of a new bike plus the business proportion of all the running cost.
However you may also find it advantageous to claim 20 pence per mile for all business travel instead.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47702.htm

John_Pierpoint

I think the "generous" 20p a mile was brought in to encourage us all to cut our carbon footprint.

My postie was having a grumble about 18 months ago about terms, conditions and strikes. So I suggested that his employer and union ought to get together and make something out of the 20p opportunity as he seemed to be doing about 10 - 20 miles a day on a clapped out PO bike.

I think he thought I was slightly off my trolley.

joolsybools

Thanks all