I run a small creative agency, trading as a Limited Company, and I use my bike all the time for business travel – is there any way I can claim the costs back from my business?



There are two possibilities for claiming bike costs from a Limited Company:

If you use your bike mainly for personal use with a bit of business mileage we suggest that you simply claim the business mileage back from your company at the HMRC rate of 20 pence per mile (correct for the 14-15 tax year). The only backup you need is to keep a mileage log detailing the journeys (dates, start and end location, mileage and reason for travel).

If however you use your bike more than 50% for business travel then it is tax efficient for the company to buy the bike for you – there will be no personal benefit in kind tax as long as your business use remains over 50% and the company can claim back the cost of the bike against it’s corporation tax bill and the VAT if relevant.

Remember the bike will be owned by your company, not you personally, so if and when it is sold , the money needs to go back to the company. Under this option you have to make sure if you have other employees in the Company they are also allowed to take up the same offer. The costs of maintenance and safety equipment can also be claimed. Bear in mind that if inspected you would need to be able to prove to HMRC that the bike is used mainly for business travel.