Dáil Éireann Debate, Thursday - 10 November 2022
154. Deputy Marc Ó Cathasaigh asked the Minister for Finance if he will provide a timeline for the roll-out and implementation of the cargo bike scheme; the oversight that will be in place; and if he will make a statement on the matter. [55828/22]
View answerSection 118(5G) of the Taxes Consolidation Act (TCA) 1997 provides for the ‘Cycle to Work’ scheme. This scheme provides an exemption from benefit-in-kind where an employer purchases a new bicycle and associated safety equipment for an employee or director up to certain limits, and subject to certain conditions being satisfied.
Currently, those limits are €1,250 for a bicycle and €1,500 for electric bicycles. The scheme does not apply to motorbikes, scooters or mopeds and safety equipment does not include child seats or trailers.
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.
I am advised by Revenue that 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.
These conditions include the following:
1. The bicycle must meet the definition of a ‘pedal cycle’ which means:
- A bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or
- A pedelec, being a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilo-watts, of which output is progressively reduced and finally cut off as the bicycle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling.
2. The bicycle and related safety equipment must be new and must be purchased by the employer.
3. 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.
4. An employee or director can only avail of the ‘Cycle to Work’ scheme once in any 4-year period, commencing with the date the employee or director is first provided with a bicycle or bicycle safety equipment.
I am amending the ‘Cycle to Work’ scheme in the Finance Bill this year to increase the allowable expenditure incurred by the employer for the provision of a cargo bicycle or e-cargo bicycle and related safety equipment.
The limits that will apply after this change will be as follows:
The first €1,250 in respect of bicycles and related safety equipment.
The first €1,500 in respect of electric bicycles and related safety equipment.
The first €3,000 in respect of cargo bicycles and electric cargo bicycles and related safety equipment.
The Finance Bill 2022 changes, once passed by the Oireachtas, will take effect from 1 January 2023.
The Cycle to Work scheme operates on a self-administered basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. However, where Revenue is conducting a compliance intervention on an employer’s operation of PAYE or its benefit-in-kind arrangements, and the employer in question is participating in the ‘Cycle to Work’ scheme; Revenue staff will frequently examine the employer’s adherence to the conditions of the scheme.
Comprehensive guidance material on the ‘Cycle to Work’ scheme can be found on Revenue’s website, in Tax and Duty Manual 05-01-01g, available on Revenue's website.
