If you are a higher rate tax payer the personal tax on this for 21-22 would be £4,200 (£10,500 x 40%). If you are also provided with fuel by your employer there are further taxable benefits which we won’t get into here. When it comes to electric cars the tax works the same way, however the key thing is that HMRC have massively reduced the. Buying items for personal matters is not exactly illegal, but it could be down the road if the expense is not paid back into the proper accounts. In terms of legalities, you will need to make sure your company is a registered office, VAT registered, and has an applicable company number. But buying items for yourself from company money is not. There is no need to draw up a formal agreement, and you don't need prior approval from HMRC. Result! Your company can directly purchase the bike and reclaim VAT (if applicable) on the price of purchase. For corporation tax purposes, a deduction can be claimed on the full cost of the bike using your capital allowances annual investment allowance. If you buy the bike from the company at a later date, then the company will have to pay Corporation Tax on the value the bike was sold for. This should be sold at a commercial rate (so you can't buy a £1,000 bike and sell it to yourself for £1, 3 months later) HMRC do have published guidance on the minimum values they expect for bikes when. If your company owns a business car, you may be required to pay tax on the fuel required. Again, how much tax you pay on the fuel will depend on the CO2 emissions and whether it is used for private or solely for business purposes. If your business car is only used for business purposes then you will need to be able to prove this to HMRC.
