Sunday 23 November 2014

Cycling Mileage: tax deductible even if your employer doesn't care

Those people lucky to earn enough to qualify for filling in a tax return now have the luxury of opting to receive 20p/mile expenses for business miles cycled —even if their employer doesn't support this.

People who don't have to fill in the paperwork can opt to do so if they ask HMRC, at the price of time and possibly some tax return software (here: TaxCalc).

The HMRC guidelines are all about car-based commuting. Assuming everything applies to cycling, the rules are online.

  1. Commute Miles don't count
  2. Travelling between two places of work does count, provided neither of the locations is the employee's home. Except it may count as another permanent workplace and you may not get a refund for commuting to either place

the HMRC guidelines still haven't taken on cyling; all the examples are about driving. Some of their criteria "10 miles" crops up as the minimum for out-of-the-way journeys

It's interesting to consider that neither walking or public transport appears to be suitable for tax rebates. One doesn't count, presumably the other is expected to be refunded directly by the employer

What about cycle-to-work schemes?

They are treated separately, and are viewed as a "company bicycle" during the scheme.
They are expected to be used primarily for journeys to work and other business trips. But: there doesn't appear to be anything saying you can use a different bike for those journeys which are eligible for cycling expenses.

What about somebody else's bicycle?

Probably —provided they aren't company bicycles.

Abroad: yes.

What about Boris Bikes?

No mention. On a business trip from S Gloucs to London, a Boris Bike at the far end could be part of the journey. Would the entire day's fee be something redeemable from the employer, or could you claim 20p/mile for the Boris? It would probably be the former: you can't expect to deduct business miles from a rental car, after all.

What if you are a cycle courier or similar?
If you use your own bicycle, then all journeys between customers appear to count as refundable. Cycle 50 miles a day as a courier, get £10 back. Once you earn enough to become eligible for tax.

What if your employer does give you a rebate?
you appear to be eligible for the difference between what they pay and the 20p/mile value of HMRC

Is there a limit on how far you can pedal?

None listed. You may need to justify the journeys though. A business trip to, say, Amsterdam would probably cover all journeys from hotel to place of work. Cycling from Bristol to London would count too, as they are not trying to distinguish vehicle types:  you get the relief of your transport option.

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