Tax - Work bike expenses

[Paul H]

I do some Deliveroo and Just Eat work which is gig economy stuff classed as self-employment. Thinking of getting my self assessment form filled in this weekend while the weather is foul and can't find the answer to this one:
I have a bike used exclusively for work, I can claim all the costs on a cash basis, or I can claim as an expense at 20p per mile. In previous years I just claimed the £1,000 trading allowance, but I earned and spent more last year.  What I don't know is whether the 20p covers just the bike, or all the related riding stuff - Insurance, bike lights, travel bags, riding clothing, locks. 
Anyone know, or know enough to make a guess?  Or know what happens if I claim everything and some is disallowed?  Do I get to go back and use the other method?
It's not a huge difference, maybe £300 tax between the best and worst options. Not really enough to warrant paying for professional help.
Thanks

[Bolt]

Hey Paul, throughout my dealings with the wrong side of HMRC I've found that they can be receptive to a reasoned approach to an individual's circumstances.  So, my advice would be to submit on the basis that is most tax efficient to you... I'd be very surprised if they challenged it and even if they did it would be unlikely to incur a penalty.

[Adam]

The 20p per mile allowance is for employees, not self employed.  Their tax manual for the self employed doesn't mention bikes:
https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-

The employee version does mention bikes.  A very daft discrepancy, but an important one.  If it's not written down as permitted, it's not allowed.
Definitely worth asking them to advise in writing though.

However, as you can state the insurance, lights, clothing etc are required in order to do the job, then you should be able to claim the cost of those:
https://www.gov.uk/expenses-if-youre-self-employed

[Paul H]

Thanks both.

The 20p per mile allowance is for employees, not self employed.  Their tax manual for the self employed doesn't mention bikes:

Yes confusing, though HMRC answered someone's question about SE bike allowable expenses by referring them to the employee rate, if they're confused, what hope me!
https://community.hmrc.gov.uk/customerforums/expenses/074b72e9-43ff-eb11-b76a-00155d974676

The answer says the mileage allowance is for the bike and associated costs, so the question really was what to include in those associated costs and what to add as additional.  I think I'll bookmark that, calculate on 20p @ mile and add what I consider are additional expenses.  I think that's a fair reflection of the reality, it works out that expenses are around 14% of income which I doubt will raise any eyebrows.

[hubner]

I think a bike can be claim as a capital cost, like other major tools bought for work. Smaller purchase eg clothing, tyres etc counts as expenses.

[Adam]

The mileage allowance for employees is the "Approved Mileage Allowance Payments" set out by HMRC to supposedly cover fuel costs, insurance and general wear & tear expense when an employee uses their own vehicle. 

I did a bit of googling and it seems HMRC informally allowed the self employed to claim the 20p per mile for bike use, but that was clamped down after the 2013 Finance Act.

In reality, it's unlikely you'll get investigated if you do your accounts to include an expense for "mileage costs" based on 20p per mile.

Separately, travel bags, clothing, lights etc are all valid business expenses to be deducted from income, as you need those items to carry out your trade.

[Paul H]

Thanks again Adam, done on that basis, 20p per mile plus those expenses I consider additional. I'm not expecting it to be queried, they're pretty small amounts, I just like to get such things right.
Added bonus is that the Universal credit I claimed for a couple of months at the start of the first lockdown doesn't seem to be taxed, I'd assumed it would be.

[giropaul]

I may be out of date, but the phrase “ wholly and exclusively “ used to be the guide. There was an interesting case about Barristers - a woman Barrister claimed for work clothing, arguing that she would never wear the clothing outside work. I seem to recall she failed, except obviously for the gown .
That’s why a lot of people use company logo work wear. Much easier to claim.
As someone who spent nearly 20 years as a self employed sole trader, I’d strongly advise that you get good public and business liability cover.