Tuesday, 27 July 2021

Questions (329, 330)

Gerald Nash

Question:

329. Deputy Ged Nash asked the Minister for Finance the number of persons who availed of the cycle to work scheme in each of the years 2017 to 2020 and to date in 2021; the cost of the scheme in each of the years; the number of persons who accessed the maximum amount of tax relief in each of those years; the average tax relief in each year; and if he will make a statement on the matter. [39878/21]

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Gerald Nash

Question:

330. Deputy Ged Nash asked the Minister for Finance the estimated savings to the Exchequer by decreasing the current tax relief on bike to work schemes to €500; and if he will make a statement on the matter. [39879/21]

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Written answers (Question to Finance)

I propose to take Questions Nos. 329 and 330 together.

As the Deputy will be aware, the cycle to work scheme operates on a self-administration basis. Relief is automatically available provided the employer is satisfied that the conditions of its particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers. Accordingly, there are no records available on the number of people availing of the scheme.

Tax expenditure reports prepared by my Department have estimated the full year's cost at €4 million covering an estimated 20,000 employees but have been clear that these figures were estimates as separate returns are not required. This gives an estimated average tax relief of €200 per employee.

An estimated additional tax expenditure of €0.5m in 2020 and €1.5m in 2021 is expected to arise on foot of the changes made to the scheme by Section 9 of the Financial Provision (Covid-19) (No.2) Act 2020. This increased the allowable expenditure from €1,000 to €1,500 in respect of e-bikes and €1,250 in respect of bicycles and allowed the purchase of a new bicycle every four years instead of five.

Reducing the threshold to €500 for e-bikes and bicycles could be expected to reduce the cost of the scheme per employee and could also lead to reduced uptake. A series of questions asked of Departments regarding the cycle to work scheme in June 2020 revealed an average value of bicycles of €870 purchased by civil servants. While this is not necessarily representative, it could indicate that the full threshold is not being used. Taking all factors into consideration, an estimated saving of 50% on the full year cost prior to the 2020 changes would seem reasonable.

Question No. 330 answered with Question No. 329.