Dáil Éireann Debate, Tuesday - 5 March 2024
225. Deputy Patrick Costello asked the Minister for Finance the number of applications under the cycle-to-work scheme in 2023 and to date in 2024; if he will provide a breakdown between the number of bicycles, pedelecs, e-bikes and e-cargo bikes; and if he will make a statement on the matter. [10486/24]
View answer226. Deputy Patrick Costello asked the Minister for Finance his views on expanding the reach of the bike-to-work scheme beyond PAYE workers to everyone, including employers, sole traders, students, jobseekers, disabled, unpaid home-work and the retired; and if he will make a statement on the matter. [10487/24]
View answerI propose to take Questions Nos. 225 and 226 together.
Section 118(5G) of the Taxes Consolidation Act 1997 (TCA) provides for the Cycle to Work scheme. This scheme offers an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment may include items such as helmets, lights, bells, mirrors and locks.
One of three thresholds applies to the amount of exempted expenditure. The applicable threshold depends on the type of bicycle purchased and includes related safety equipment. Since 1 January 2023, the Cycle to Work scheme applies to the first:
• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.
Under section 118B TCA, the employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary in exchange for a bicycle and/or related safety equipment. If such an arrangement is in place, there is a corresponding reduction in the employee's taxable salary, up to the lower of either the value of the bicycle and/or safety equipment or the above limits.
The Cycle to Work scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers. As the scheme does not require any notification or application procedure, there are no records centrally available on the number of people availing of the scheme or the types of bicycle purchased.
It should also be noted that BIK is a charge to tax which applies where an employer provides an employee with a benefit, such as a bicycle, car or accommodation. Therefore, the Cycle to Work Scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment. Where an employer-employee relationship does not exist, for example, in the case of self-employed, retired individuals, or those in receipt of social welfare payments, such individuals can’t qualify for the scheme. Likewise, salary sacrifice arrangements can only be entered into between an employer and a director or employee.
Furthermore, as the Deputy will appreciate, the expansion of any tax expenditure measure creates a cost and that cost must be recovered elsewhere. For that reason, while the scheme is kept under review by officials, I have no plans at present to change the scope of the scheme.
Further information and guidance regarding the cycle to work scheme can be found on Revenue’s website at the following link: www.revenue.ie/en/jobs-and-pensions/taxation-of-employer-benefits/cycle-to-work-scheme.aspx
