For those who wish to cycle to work, there are big tax breaks, however you may find that you have to do a lot of persuading in order to get them.
Before you decide to splurge on a new bicycle for your daily commute to work, you should find out if your employer can help.
This is because there are dozens of privately run, Government-backed cycling schemes that could save you hundreds of pounds in tax, what's great is they shouldn't cost your company a penny.
The cycling schemes work by allowing you to reclaim the VAT paid on a bike and the safety equipment that is added to your bill in any shop sale, plus you can get money off your National Insurance contributions and your tax.
The Government is trying to promote cycling to work and school schemes.
Changes to consumer credit rules back in 2005 now allows companies to offer cycle packages to each of their employees up to £1,000 to cycle to work.
Since 2005 an estimated 100,000 employees are now benefiting from the use of new bikes through this scheme.
The Department for Transport has now assigned six cycling towns: Brighton and Hove, Lancaster with Morecambe, Darlington, Aylesbury, Derby and Exeter.
These towns will now receive extra funding in order to promote cycling in those towns.
If you want your company to help you, then you should start with the independent firm Cyclescheme.
As they have information packs for employers detailing the benefits of cycling to work.
They will put your employer in touch with local stores that can provide bikes and equipment.
Under the scheme your employer buys the bike and safety equipment you have chosen.
The employer then can claim back the 17.
5% VAT.
Safety helmets are excluded because they are VAT-free.
In turn, the VAT will not be charged to you either, so if you chose to buy a bike costing £300 in a shop, it would cost you just £255.
32.
The cost of the bike will then be deducted from your salary before annual tax.
You pay it off in monthly installments over a year from your pay.
The benefit is that because your salary has been reduced by £255.
32, you will pay less tax and National Insurance.
For example, if someone was earning £25,000 a year they would normally be taxed £316.
08 a month and have National Insurance contributions of £177.
But by paying for the bike over a period of 12 months you would pay only £312 in tax and £177 National Insurance each month, this could then save you around £78.
This will then push down the cost of your bike to £177.
32.
However there is also an alternative scheme, in this scheme your company buys the bike and loans it to you for free.
The company can then write off the expenditure of the bike towards tax, providing that half of the use of the bike is for work.
However, it is difficult to get firms to sign up to this scheme since the cost of the bike rests entirely with them.
You need to tell them that with both of the schemes their National Insurance contributions will also be reduced usually by 12%.
With both schemes, you must make sure your bike is insured during the repayment period.
Most home contents insurance policies will often cover the cost of a bike, provided that you have locked it when left outside.
You may have to pay extra to add your bike to your policy.
Unfortunately the self-employed cannot sign up to the schemes, but they can deduct the cost of their bike as an expense from their tax return, provided the cost of buying it is incurred by them and is necessary for their business.
Before you decide to splurge on a new bicycle for your daily commute to work, you should find out if your employer can help.
This is because there are dozens of privately run, Government-backed cycling schemes that could save you hundreds of pounds in tax, what's great is they shouldn't cost your company a penny.
The cycling schemes work by allowing you to reclaim the VAT paid on a bike and the safety equipment that is added to your bill in any shop sale, plus you can get money off your National Insurance contributions and your tax.
The Government is trying to promote cycling to work and school schemes.
Changes to consumer credit rules back in 2005 now allows companies to offer cycle packages to each of their employees up to £1,000 to cycle to work.
Since 2005 an estimated 100,000 employees are now benefiting from the use of new bikes through this scheme.
The Department for Transport has now assigned six cycling towns: Brighton and Hove, Lancaster with Morecambe, Darlington, Aylesbury, Derby and Exeter.
These towns will now receive extra funding in order to promote cycling in those towns.
If you want your company to help you, then you should start with the independent firm Cyclescheme.
As they have information packs for employers detailing the benefits of cycling to work.
They will put your employer in touch with local stores that can provide bikes and equipment.
Under the scheme your employer buys the bike and safety equipment you have chosen.
The employer then can claim back the 17.
5% VAT.
Safety helmets are excluded because they are VAT-free.
In turn, the VAT will not be charged to you either, so if you chose to buy a bike costing £300 in a shop, it would cost you just £255.
32.
The cost of the bike will then be deducted from your salary before annual tax.
You pay it off in monthly installments over a year from your pay.
The benefit is that because your salary has been reduced by £255.
32, you will pay less tax and National Insurance.
For example, if someone was earning £25,000 a year they would normally be taxed £316.
08 a month and have National Insurance contributions of £177.
But by paying for the bike over a period of 12 months you would pay only £312 in tax and £177 National Insurance each month, this could then save you around £78.
This will then push down the cost of your bike to £177.
32.
However there is also an alternative scheme, in this scheme your company buys the bike and loans it to you for free.
The company can then write off the expenditure of the bike towards tax, providing that half of the use of the bike is for work.
However, it is difficult to get firms to sign up to this scheme since the cost of the bike rests entirely with them.
You need to tell them that with both of the schemes their National Insurance contributions will also be reduced usually by 12%.
With both schemes, you must make sure your bike is insured during the repayment period.
Most home contents insurance policies will often cover the cost of a bike, provided that you have locked it when left outside.
You may have to pay extra to add your bike to your policy.
Unfortunately the self-employed cannot sign up to the schemes, but they can deduct the cost of their bike as an expense from their tax return, provided the cost of buying it is incurred by them and is necessary for their business.