COMPLIANCE
Are E-bikes the future?
Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP, Head of Employment and Devolved Taxes, the Institute of Chartered Accountants of Scotland (ICAS), gives an overview of E-bikes and discusses whether they can be provided under a ‘cycle to work’ salary sacrifice scheme or not
First things first: what’s an E-bike?
together with the requirement to pass road safety tests for motorbike and moped users, wear a helmet and purchase tax and insurance for the vehicle. Who can ride an E-bike? Anyone over the age of 14 can legally ride an E-bike, if it’s classified as an EAPC. The E-bike doesn’t need to be registered, taxed or insured. EAPC riders aren’t subject to the requirements to take road safety tests, although all cyclists and other road users must follow the Highway Code. An E-bike can be ridden anywhere a traditional pedal cycle can be ridden, but they must not be ridden on pavements. “Any bicycle or E-bike not provided to employees through a cycle to work scheme is to be treated as a benefit in kind” Quite how this, and the approval process, is policed is anyone’s guess but for the purposes of this article, I will call it a form of self-assessment. A debate was sparked by a recent Panorama programme which can be watched on BBC iPlayer 3 , with Cycling Weekly 4 and others unsurprisingly pushing back.
and EAPCs tax-free to employees under the cycle to work scheme 5 . The following additional tax points are worth noting: l any bicycle or E-bike not provided to employees through a cycle to work scheme is to be treated as a benefit in kind l capital allowances can be claimed where E-bikes and motorcycles are purchased for employee use (sole traders can also claim them, but capital allowances are restricted if privately used). * Markings on the bike must show: l the continuous rated power output; and the bike manufacturer; and one of: l the battery’s voltage; or l the maximum speed the motor can propel the bike. If an E-bike was first used before January 2016 the purchaser should contact the Driver and Vehicle Licensing Authority to check if it’s classified as an EAPC. So-called ‘Twist and go’ cycles, which are powered by an accelerator built in to the handlebars, must have been approved as EAPCs by the Vehicle Type Approval Authority 6 and be classified as low- powered mopeds at the manufacturing stage of production to qualify. n
Accountants and tax professionals may find clients approaching them with increasing regularity in connection with how best to provide employees with E-bikes. The main issues facing advisers are understanding how to differentiate an E-bike from a moped or a classic bicycle / tricycle and helping the client to decide whether they can be provided under a ‘cycle to work’ salary sacrifice scheme which carries tax benefits.
Definition of an E-bike The official term for an E-bike is an
‘electrically assisted pedal cycle’ (EAPC) 1. They can be two or three-wheeled bicycles or tricycles which are propelled by a combination of the rider and an electrical motor. The E-bike must have pedals that can propel the bicycle, and an electric motor which cannot exceed 250w of continuous rated power. In addition, once a speed of 15.5mph is reached (only permitted if the E-bike is approved*), the electrical assistance function automatically switches off. Part of the approval process for an E-bike is the restriction on speed to a maximum of 15.5 mph. It’s vital, to preserve them as E-bikes, for the motor not to be de- restricted to enable the E-bike to travel in excess of this limit. If that happens, the E-bike becomes a moped or motorcycle 2 , and the regulatory status and tax status changes in addition to the rider’s minimum age (16 for mopeds and scooters of up to 50cc / 17 for motorbikes of up to 125cc),
Links corner 1. https://ow.ly/BEAY50V5VTn 2. https://ow.ly/jSlA50V5VYt 3. https://ow.ly/lvlz50V5W1L 4. https://ow.ly/4Yvw50V5W2H 5. https://ow.ly/zzCT50V5W5e 6. https://ow.ly/XBXT50V5WaO.
E-bikes and tax Employers are permitted to provide cycles
17
| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
Made with FlippingBook - Online magazine maker