The purpose of the cycle to work scheme, introduced by the Finance (No. 2) Act 2008, is to encourage more employees to cycle to and from work, or between work places, thereby contributing to lowering carbon emissions, reducing traffic congestion and improving health and fitness levels. Under the scheme an employer may provide an employee with a bicycle and/or cycle safety equipment without the employee being liable for benefit-in-kind taxation. However, where the expenditure by the employer exceeds €1,000, the excess amount is liable to tax.
The legislation only allows for one purchase of a bicycle in respect of an employee in a five-year period irrespective of whether the bicycle was used for the full period or not. It operates on a self-assessing basis using straightforward rules. Any deviation from the current system would involve additional administrative procedures for either or both Revenue and employers in relation to the verification of loss, theft, insurance recovery, etc. As this runs counter to the existing provisions which are administratively simple, it would not be appropriate to alter the existing scheme.
Anyone obtaining a bicycle under the scheme would therefore be advised to ensure it is covered by insurance.