Sole Trader Private Vehicle Purchase

E

essjay

Guest
Just a quick question on how it works when you are a sole trader and you buy a vehicle privately, and if it's even possible.

I'm a sole trader but I don't pay VAT as I'm below the ceiling and I want to buy a motorbike to get into and through the City quicker. I don't have much of a budget and so I'm looking at private (second hand, non-dealer) sales. Is it even possible to buy as a sole trader this way considering you wouldn't have valid receipts?

Does BIK come into effect as I'd only be using the bike for business. Have a car for everything else.
 
You can buy the bike and to the extent that it is used "wholly and exclusively" for the business then the capital cost (12.5%p.a.) and running expenses would be allowable. BIK does not apply to sole traders. However if you use it for personal use then the allowable expenses must be reduced to reflect that e.g. if you do 5000km/yr and you do 1000km private then you allow 80% of the costs. In cases of private sales like this even a receipt made out between you and the vendor showing that you paid joe bloggs €xxx for the bike would normally be acceptable to prove capital cost.
 
I wouldn't start playing games with Revenue like this. If it's for getting into and out of work it is not a business vehicle. If the moral issue of defrauding the people of Ireland by not paying your taxes doesn't bother you then consider if you would be happy to have a revenue audit.
 
It's a motorbike the OP is referring to for use in his trade. That wouldn't be part of the CTW scheme.

I really don't see any intention by the OP in their question to either play games or defraud anyone. Legitimate business use of a motorbike in one's sole trade is no less allowable than similar use of a car or other transport. A client of mine (now retired) kept a motorbike at his workshop. He arrived and left each day in his private car. He used the bike solely to collect parts, go to bank (or his accountant) and visit customers. It was cheap, convenient and saved him time. In fact, his motoring deductions were probably less than might otherwise been the case using other means of transport. He was audited by Revenue over the years. The bike was never an issue.

However as has already been said, travel to/from work is not allowed and only use "wholly and exclusively" for the sole trade would be allowable, this means a clear method of calculating business/private use must be used and records maintained in support.
 
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