Fleet News

Funding a motorcycle with BIK savings from downsizing

FLEET managers could help staff reduce their tax bills and provide them 'two vehicles for the price of one' by opting for two-wheeled motoring.

Company car drivers could downsize from their current vehicles and use the savings in lease rates to fund a cheaper car and a motorbike, claims Motorcycle Management. For example, for a fleet to fund a BMW 525i Sport Auto over three years/60,000 miles with maintenance would cost £690.39 a month, according to Days Contract Hire online quotation system.

If a driver downsized to a Honda Accord 2.0i VTEC SE auto, it would cost £346.43 over three years/45,000 miles. The reduced mileage is to cover the use of a motorcycle and would leave £343.96 a month available to spend.

Quotes from Motorcycle Management offer a Honda CB600 F Sport Hornet with full maintenance and unlimited tyres for £129.54 a month over 5,000 miles a year, leaving the company £214.42 spare to cover insurance and any extra costs. From a benefit-in-kind tax perspective, the driver of the BMW, worth £30,700, would pay tax on 31% of the price because its CO2 emissions are 247g/km. This equates to £9,517, equivalent to £3,806 for a 40% taxpayer.

Shifting to the Honda, valued at £15,965, with emissions of 219g/km, a driver would pay tax on 25% of its value, or £3,991. For a 40% taxpayer, this equates to £1,956, leaving them £1,850 better off.

The Honda motorcycle is valued at £5,049, with a standard 20% tax charge, of £1,009, which means a 40% taxpayer would pay £403 per year in tax, leaving enough money spare from the £1,850 saving for a set of leathers.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee