Employees frequently use salary sacrifice to lower their taxable income and save money on taxes. It entails using pre-tax money from your paycheck to pay for a certain expense, such a car or a laptop. Can you, however, salary sacrifice a motorcycle?
Yes, you may salary sacrifice a motorcycle; however, there are certain limitations. The motorcycle must, first and foremost, be used exclusively for work-related activities, such as getting to and from work. Second, the motorcycle must adhere to particular standards, such as having minimal CO2 emissions and falling within a certain threshold.
Your motorcycle can be salary sacrificed through a novated lease if it satisfies these requirements. An arrangement involving you, your employer, and a financing business is known as a “novated lease,” in which the latter buys the motorcycle on your behalf and leases it back to you. The lease payments are then subtracted by your employer from your pre-tax pay, lowering your taxable income and resulting in a tax refund for you.
While salary sacrificing a motorcycle can be a terrific method to reduce your tax burden, it’s vital to recognize that not everyone is a good candidate. You might not be qualified for a novated lease if you don’t use your motorcycle largely for work-related activities or if it doesn’t match the requirements.
Due to their user-friendliness and commitment to the environment, electric motorcycles are growing in popularity. But are electric bikes subject to taxation?
The answer is no, electric bikes are tax-free. Electric bicycles are exempt from motor vehicle taxes because they are regarded as bicycles rather than motor vehicles. You won’t be required to pay any registration fees, road taxes, or other taxes associated with owning a motor vehicle as a result. People often inquire as to whether or not electric bikes will receive government subsidies.
With programs like the Cycle to Work programme offering tax incentives for firms to provide employees with bicycles, the government has demonstrated some support for electric bikes. To actively subsidize the purchase of electric bikes, however, is not currently planned.
In conclusion, even though a motorcycle can be salary sacrificed through a novated lease, it’s crucial to make sure it complies with the requirements and is utilized exclusively for professional endeavors. On the other hand, electric bikes are free from motor vehicle taxes and don’t need to pay any taxes. While the government has not yet provided electric bikes with direct subsidies, there are still other choices, such as local government grants or the Cycle to Work program.