Dáil Éireann Debate, Tuesday - 5 April 2022
255. Deputy Darren O'Rourke asked the Minister for Finance if he has examined expanding the cycle-to-work scheme to college students; the estimated cost of such an expansion; and if he will make a statement on the matter. [18330/22]
View answerSection 118(5G) of the Taxes Consolidation Act 1997 (TCA 1997) provides for the Cycle-to-Work scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and associated safety equipment for an employee.
Under section 118B TCA 1997 an employer and employee may also enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a bicycle and related safety equipment.
Where a bicycle or safety equipment is purchased under the Cycle-to-Work scheme or through a salary sacrifice arrangement certain conditions must be met, including:
- The exemption applies to the first €1,250 of expenditure incurred by the employer in obtaining a bicycle and related safety equipment. This exemption limit is increased to €1,500 for pedelecs or ebikes and related safety equipment. Employers may incur costs in excess of these limits, but any such excess will not qualify for the exemption and will be liable to tax.
- The bicycle and related safety equipment must be new and must be purchased by the employer.
- The bicycle and related safety equipment must be used by the employee or director mainly for the whole or part of their journey to or from work.
- An employee or director can only avail of the Cycle-to-Work scheme once in any 4 year period. A salary sacrifice arrangement is subject to the same time limits and any salary sacrifice arrangement entered into must be completed within a 12 month period.
The Cycle-to-Work scheme is only applicable where the bicycle and safety equipment is provided by an employer to either a director or someone in its employment. Thus, where college are employed in a full or part time capacity and their employer is willing to participate in the Scheme, they may participate in the scheme. However, where the employer-employee relationship does not exist, such individuals can’t qualify for the scheme.
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. Therefore, the cost of the existing scheme and of any potential changes can only be estimates.
Further comprehensive guidance can be found on Revenue’s website.
While the scheme is kept under review by my officials, I have no plans at present for its expansion.
