Understanding the Tax rules for E-Bikes and Mopeds
Understanding the tax rules for E-Bikes and mopeds is essential for employers and riders alike. This is because it is an issue for employers who provide E-bikes as part of Cycle to Work tax schemes as well as for regulators.
What Is an E-Bike/EAPC?
Electrically assisted pedal cycles (EAPCs) offer a cost-effective and eco-friendly transport solution. However, if modified or derestricted, they can become classified as mopeds or motorcycles. As a result this triggers different tax and legal requirements.
An EAPC is a cycle supported by an electric motor. In order to qualify as an EAPC in the UK it must have the following characteristics:
If these conditions are met, the cycle is not classified as a moped or motorcycle. This post by the DVLA provides further details surrounding EAPC's and their rules.
Benefits of EAPCs versus Mopeds
EAPCs can offer multiple advantages compared to mopeds:
Tax Treatment: Similarities Between Cycles and Motorcycles
Although EAPCs are not considered mopeds, there are some tax treatments which overlap:
What Happens When an E-Bike Is Derestricted?
Where an EAPC is derestricted and exceeds the 15.5 mph limit (see above) they become mopeds or motorcycles. Therefore the following changes apply:
Other issues involving E-Bike Regulations
If you have an older EAPC (specifically one used before January 2016) it might qualify as an EAPCs. However it is important to check this with the DVLA.
A twist and go cycle must meet EAPC rules, have type approval, and fall under the 250W Low Powered Moped category in order to qualify.
Summary
Understanding the tax rules for E-bikes and mopeds is crucial. Therefore it's important to understand the cycle to work scheme alongside any other tax efficient travel solutions for you and your employees.
The provision of an EAPC should also be considered in conjunction with salary sacrifice schemes and employment related loans.
E-bikes (EAPCs) can be tax-efficient, requiring no registration or road tax if they meet legal criteria, and can be provided tax-free through schemes like Cycle to Work. However, derestricted E-bikes are classified as mopeds or motorcycles, subject to stricter regulations and additional costs.
For more useful information, check out our Ebooks here.
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