IR 167 allows employers to buy employees Electric Bikes without the employee having to pay Income Tax and NICs.
April 1, 2004 (Press Release) --
In the UK, the Inland Revenue has a scheme running entitled IR176 ‘Green Travel’.
What is most significant is that, if your employer buys you an Electric Bike, that bicycle is free from Employee Tax and NICs (National Insurance Contributions).
The cycle must be deemed to be used, primarily to and from work; the employers will not have to pay tax or NICs to pay on the benefit.
Also the bike may be used for leisure as well, as long as it is mainly used for travelling to and from work.
Also the employer can pay any amount they wish as a mileage allowance on an Electric Bicycle. The Tax Free AMAPs amount is calculated upon 20p for every business mile travelled., whether or not all business miles are reimbursed.
Therefore the higher the tax bracket you are in, the greater the benefit.
The arithmetic: -
Your employer buys you an Electric bike for £699, and you are paying 40% Income Tax, then your employer can purchase the bike for you and you save the 40%.
So you would have had to earn £978.60, to take home £699. Plus the employer is not liable for the NIC, which equates to an additional 9%.
Notes: -
An Electric Bike is considered in the same way as a bicycle according to the Road Traffic Act of 1988 (c.52) Sections 189 & 192.
192. General interpretation of Act. "cycle" means a bicycle, a tricycle, or a cycle having four or more wheels, not being in any case a motor vehicle
189. Certain vehicles not to be treated as motor vehicles. (c) an electrically assisted pedal cycle of such a class as may be prescribed by regulations so made,
Electric Bikes Direct is pleased to support this initiative and assist both employees and employers to make the most of their entitlement.
Please visit www.electricbikesdirect.co.uk or call 0870 345 0775 for more information.
1. Electric Bikes Direct supplies a wide range of Folding Electric Bikes to suit all budgets. All comply with UK regulations.
2. Models currently available are BliSS, Bright Bikes, Dahon, Honda and Koolgachet.
3. All are fitted with EPAS, which is a system that requires you to pedal before the motor starts and stops if you brake.
What is most significant is that, if your employer buys you an Electric Bike, that bicycle is free from Employee Tax and NICs (National Insurance Contributions).
The cycle must be deemed to be used, primarily to and from work; the employers will not have to pay tax or NICs to pay on the benefit.
Also the bike may be used for leisure as well, as long as it is mainly used for travelling to and from work.
Also the employer can pay any amount they wish as a mileage allowance on an Electric Bicycle. The Tax Free AMAPs amount is calculated upon 20p for every business mile travelled., whether or not all business miles are reimbursed.
Therefore the higher the tax bracket you are in, the greater the benefit.
The arithmetic: -
Your employer buys you an Electric bike for £699, and you are paying 40% Income Tax, then your employer can purchase the bike for you and you save the 40%.
So you would have had to earn £978.60, to take home £699. Plus the employer is not liable for the NIC, which equates to an additional 9%.
Notes: -
An Electric Bike is considered in the same way as a bicycle according to the Road Traffic Act of 1988 (c.52) Sections 189 & 192.
192. General interpretation of Act. "cycle" means a bicycle, a tricycle, or a cycle having four or more wheels, not being in any case a motor vehicle
189. Certain vehicles not to be treated as motor vehicles. (c) an electrically assisted pedal cycle of such a class as may be prescribed by regulations so made,
Electric Bikes Direct is pleased to support this initiative and assist both employees and employers to make the most of their entitlement.
Please visit www.electricbikesdirect.co.uk or call 0870 345 0775 for more information.
1. Electric Bikes Direct supplies a wide range of Folding Electric Bikes to suit all budgets. All comply with UK regulations.
2. Models currently available are BliSS, Bright Bikes, Dahon, Honda and Koolgachet.
3. All are fitted with EPAS, which is a system that requires you to pedal before the motor starts and stops if you brake.
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