Last updated: 14 October 2026
Can a company claim tax relief on a motorcycle it buys?
Yes. A motorcycle bought by a company for business use isn’t treated as a car for capital allowances, so it qualifies for the Annual Investment Allowance (AIA) or, if new, full expensing. That means the company can usually deduct the full cost from its profits in the year of purchase. If a director or employee uses the motorcycle privately, there’s a benefit in kind charge, based on 20% of its market value each year, plus Class 1A NIC for the company.
How motorcycles are treated
| Point | Treatment |
| Capital allowances | Plant and machinery; AIA or full expensing on new bikes |
| Benefit in kind for private use | 20% of market value when first provided, a year |
| Running costs paid by company | Deductible; private fuel also taxable |
| VAT | Reclaimable if used only for business; otherwise restrictions may apply |
| Employee using own motorcycle | 24p a mile tax-free |
Benefit in kind
Unlike cars, motorcycles don’t use CO2 rates. Instead, the annual benefit is 20% of the bike’s market value when first made available, plus any running costs paid by the company for private use. Electric motorcycles are treated the same way.
Example
Fleetway Couriers Ltd buys a new motorcycle for £9,000 for its director, who uses it for deliveries and some private trips. The company claims full expensing, deducting £9,000 from profits. The director’s benefit in kind is £1,800 a year (20% of £9,000). At 40%, the director pays £720 tax, and the company pays £270 Class 1A NIC. If the motorcycle is used only for business, with private use prohibited and none taking place, there’s no benefit.
Alternatives
- Director owns the motorcycle: the company pays 24p a mile tax-free for business journeys
- Leasing: lease rentals are deductible for the company
- Pool vehicle: no benefit if genuinely shared, kept at work and private use is incidental
Selling the motorcycle
If the company sells the bike, the proceeds are a balancing charge, as the full cost was deducted. If sold to the director at below market value, the difference is a benefit.
Records
- Keep the purchase invoice and V5C in the company’s name
- Record business journeys
- Report any private use on form P11D or through payroll
Common mistakes
- Treating a motorcycle as a car and claiming only 18% or 6% a year
- Forgetting the benefit in kind when a director uses the bike at weekends
- Reclaiming all the VAT when there is private use
- Selling the bike to the director for less than market value without reporting the difference
Insurance and running costs
Insurance, servicing, tyres, road tax and business fuel paid by the company are deductible. If the director uses the bike privately and the company pays for private fuel, that is part of the benefit. Keep fuel receipts and a simple log so private and business use can be separated.
Frequently asked questions
Is a motorcycle a car for tax?
No.
Can a sole trader claim AIA on a motorcycle?
Yes, restricted for private use.
Is protective clothing deductible?
Yes, if needed for business riding.
Do mileage rates apply to electric motorcycles?
Yes, 24p a mile.
Related: capital allowances on company cars, buying a car through your company and car fuel and mileage allowances.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with company vehicles and benefits. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
