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Departmental Schemes

Dáil Éireann Debate, Tuesday - 17 May 2022

Tuesday, 17 May 2022

Questions (251, 252)

Louise O'Reilly

Question:

251. Deputy Louise O'Reilly asked the Minister for Finance the amount of applications under the bike-to-work scheme in 2021 and to date in 2022 by the number of bicycles purchased within the €1,000 limit and the number of pedelecs or ebikes purchased within the €1,500 limit; and if he will make a statement on the matter. [24269/22]

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Louise O'Reilly

Question:

252. Deputy Louise O'Reilly asked the Minister for Finance his views on expanding the reach of the bike-to-work scheme to beyond PAYE to all employers, sole-traders, students, jobseekers, disabled, unpaid home-work and the retired; the estimated cost of same; and if he will make a statement on the matter. [24271/22]

View answer

Written answers

I propose to take Questions Nos. 251 and 252 together.

Section 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, for example:

- 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. A salary sacrifice arrangement is subject to the same monetary limits.

- 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 an employer-employee relationship does not exist, for example, in the case of self-employed individuals, students, retired individuals, job seekers or those in unpaid work, such individuals can’t qualify for the scheme. Likewise, salary sacrifice arrangements may only be entered into between an employer and a director or employee.

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 or the cost of the scheme.

Further guidance regarding the Cycle to Work scheme and salary sacrifice arrangements can be found on Revenue’s website.

Question No. 252 answered with Question No. 251.
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