Vol. 545 No. 1
175 Mr. Dennehy asked the Minister for Finance if he will consider exempting from tax allowances made by companies to their employees who use bicycles to get to and from work; and if he will make a statement on the matter. [29630/01]
The position is that the payment of an allowance by an employer to an employee who uses a bicycle to get to and from work would be taxable under the general income tax charging provisions as a perquisite of the employment. Similarly, any payment made to an employee for use of a bicycle in the course of his-her work over and above the Civil Service mileage rate for bicycles would be taxable – the rate is currently 5 pence or 6.35 cent per mile and is used as a benchmark rate elsewhere.
There is, essentially, only one exception to the rule relating to the taxability of payments made to employees for travel to and from work. In budget 1999, I introduced a tax exemption from benefit-in-kind where employers purchase monthly or annual bus and rail travel passes for their employees. The Revenue Commissioners agreed last year that the exemption can, subject to certain conditions, apply in the context of salary sacrifice: that is, where an employee agrees to forgo or sacrifice part of his/her salary in lieu of the provision of the travel pass by the employer. Such a scheme has recently been introduced in the Civil Service. However, I have no plans to provide an exemption from tax of the kind sought by the Deputy.
